Controversial proposals mandating all Welsh farmers set aside 10% of their land to tree planting have been removed from the Welsh government’s final version of its Sustainable Farming Scheme.
However, direct funding via the Basic Payment Scheme (BPS) will decrease at an accelerated rate than initially envisaged – with those opting not to enter the new SFS when it starts in January receiving just 60% of the payment, rather than the 80% they had previously been told, NFU Cymru has said.
Announcing the scheme this week, Wales’ deputy first minister with responsibility for climate change and rural affairs Huw Irranca-Davies said the final iteration of the post-Brexit SFS – which will become the primary source of government support for Welsh farming from 2026 – would “secure the future of food production while also protecting the environment for generations to come”.
The Welsh government’s earlier iterations of the scheme, and the proposal for the tree planting mandate, led to a series of farmer protests last year due to concerns farmland would be taken out of production and jobs would be lost, prompting ministers to review its plans.
The new, “less complex” SFS is broken down into payments for three key ‘layers’.
The main universal payment will go to farmers who follow basic scheme requirements across 12 actions including soil health, integrated pest management, and habitat maintenance. There are also additional actions via optional and collaborative layers that will pay additional financial support.
Instead of the compulsory setting aside of 10% of land for tree-planting, farmers will now be given “generous support” for tree and hedgerow planting in the optional layer of the SFS, including for agroforestry. There will also be a higher payment rate for tree planting during the first three years of the scheme, Irranca-Davies said.
“Farmers are not expected to plant trees on their most productive land – they will decide where to plant, with clear advice and guidance to ensure the right tree in the right place,” he added.
The sector will, however, need to have at least 10% of its land actively managed as habitat, “to benefit biodiversity and support nature recovery alongside food production”.
A range of temporary habitat options are available to choose from if farmers need to do more to meet the 10% requirement, Irranca-Davies added.
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“We have listened to opinions across the agricultural industry and the scheme is now much simpler,” he said. “There are fewer universal actions and we have made it less complex and more accessible to all types of farms.”
But despite the concessions made by ministers, NFU Cymru warned that Welsh farmers, like those in England, would now face a “cliff-edge” in funding, due to the accelerated “tapering” of the previous BPS subsidy scheme ahead of the transition to the SFS.
“This unwelcome decision by Welsh government is extremely worrying for farmers in Wales who had previously been informed that those opting not to enter the new SFS in 2026 would receive 80% of their BPS,” said NFU Cymru president Aled Jones.
“Farming businesses have forward planned on this basis,” he added. “This development is even more of a blow given significant guidance and technical detail is yet to be published which farmers need if they are to make informed decisions about whether to enter the scheme from 1 January 2026.”
With harvest “well underway and next year’s cropping and livestock purchases already in motion, many farmers will not be able to pivot their business to join the new scheme from January”, Jones pointed out.
“Farming families are also grappling with difficult conversations and decisions on how to restructure their businesses to address the changes being forced upon them by the introduction of the UK government’s family farm tax from April 2026.”
With the Welsh government “now slashing the first year of the tapered transition from the BPS, many will feel they are now stuck between a rock and a hard place”, he warned.
Jones’ comments were echoed by National Sheep Association CEO Phil Stocker, who said many farmers could now be faced “with a basic choice of working with the government and its aspirations for environmental delivery or turning their back on the government and farming independently”.
Whilst the NSA “supports the overarching goals of SFS – rewarding farmers for sustainable land management alongside food production – it remains concerned that the speed of transition to its January 2026 launch date is too abrupt”, he added.
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