Welsh government targets BPS with final SFS description

The Welsh government has released details of the final Sustainable Farming Scheme (SFS), which will replace the current Basic Payment Scheme (BPS) from next year.
Announcing the new scheme, which aims to secure the future of food production while also protecting the environment, deputy first minister Huw Irranca-Davies said the SFS is the product of extensive collaboration.
See also: SFS uptake likely to hinge on payment rates
“It’s clear that the people of Wales want us to back Welsh farming, but they also want to see nature restored, soils protected, water quality in our rivers improved, access to the countryside maintained, and nature supported to recover and thrive,” said Mr Irranca-Davies.
“This is not just a scheme for farmers, this is a scheme for the whole of Wales – a whole farm, whole nation approach.”
How the scheme will work
The SFS will open on 1 January 2026, and there are three layers to the scheme – the Universal layer, the Optional layer and the Collaborative layer.
Applications may be made using the single application form via Rural Payments Wales Online from March through to 15 May each year.
The Universal layer now comprises 12 actions including soil health, integrated pest management, habitat maintenance, hedgerow management, a tree and hedgerow planting opportunity plan, and animal health and welfare.
To get the payment, farmers will need to meet these actions where they are relevant and applicable to them.
The Optional and Collaborative layers will then be available for farmers who want to do more and so boost their income.
Funding
The Welsh government has committed the equivalent of this year’s BPS budget to the Universal payments in 2026 (worth £238m for the Universal and BPS payments combined).
The annual SFS Universal payment will be made up of the Universal baseline payment, which includes the whole farm area, habitat area and woodland area.
Farmers in the scheme will also receive a social value payment, and a one-off stability payment of £1,000 for farms up to 100ha.
Higher value SFS payments will be subject to capping.
To get an idea on what an individual farm payment might look like for the SFS Universal payment, a simple ready reckoner will be available on the Welsh government website by next week.
A 40% reduction to those farmers who choose to stay in BPS in 2026 is expected.
After that an annual 20% reduction will be applied.
The Welsh government has also indicated that a minimum of £102.2m will be allocated to the Optional and Collaborative layers, including a ring-fenced amount for tree planting and hedgerow creation.
Trees
The controversial proposal for a minimum 10% tree cover on every farm has been removed.
Instead, farmers will need to create a tree and hedgerow planting “opportunity” plan as one of their Universal actions.
This will be supported by a range of additional and flexible options for tree and hedgerow planting in the Optional layer of the scheme.
Exact details on how much farmers will get paid for this are yet to be finalised, though there will be a higher payment rate for tree planting during the first three years of the scheme to encourage participation.
The Welsh government wants to achieve at least 17,000ha of new tree planting across Wales by 2030, with an aspiration to reach 21,500ha.
For hedgerows, the aim is to plant at least 1,500km of new hedgerows by 2030, with a main goal of reaching 2,000km.
Farmers will need to demonstrate progress towards their “opportunity” plan by the end of the 2028 scheme year.
They will each need to plant at least 0.1ha of trees – equivalent to 250 trees – by the end of 2028 or to have plans in place to achieve that by the end of March 2029.
Habitat
Farmers in the scheme will need to have at least 10% of their land actively managed as habitat.
A range of temporary habitat options are available to choose from if farmers need to do more to meet the 10% requirement.
Hedgerows cannot be cut annually, and when they are being cut this must be done in an incremental way.
Once a hedge has reached 3x2m, or 2x3m, farmers no longer need to cut them incrementally.
Industry reaction
NFU Cymru said the Welsh government’s decision to slash the Basic Payment Scheme (BPS) by 40% for 2026 overshadows much of the positive work undertaken to improve the new Sustainable Farming Scheme (SFS).
“Welsh government has confirmed its intention to reduce the BPS to 60% of current payment levels in 2026, having previously reassured farmers that there would be no ‘cliff edge’ in funding through the transition to new schemes,” said a NFU Cymru spokesman.
The union also questioned the level of bureaucracy the SFS will involve, which will be “far greater than anything seen before”.
The Farmers’ Union of Wales (FUW) said the scheme marks a generational milestone and, while not perfect, farmers should consider all the options.
FUW president Ian Rickman said: “We have left no stone unturned over the past seven years in our ambition to secure a viable post-Brexit farm support framework.”
The Tenant Farmers Association (TFA) said it recognised the concessions made to help tenant farmers access the scheme, and urged Rural Payments Wales (RPW) to take a light touch approach to its oversight.
TFA chief executive George Dunn said: “The vast majority of participants will be seeking to properly fulfil the scheme requirements, but there will be misunderstandings and practicalities to iron out in the early years of the scheme.”
Soil Association head of policy for Wales Andrew Tuddenham said:
“We have to wait for the Welsh government to publish further details later this year to understand the full picture in terms of budget and payments for Optional and Collaborative actions, which will be a concern for those who want to go further in the scheme now.”
Country Land and Business Association Cymru director Victoria Bond added: “Most frustratingly, the total budget remains static, and there is a reduction in the BPS taper.
“However, we do welcome the consideration of a social value payment, and the inclusion of payments on common and designated sites.”