Welsh Government outlines proposed updates to Sustainable Farming Scheme

Monday, 27 January 2025

At the beginning of 2024 the Welsh Government asked for consultation responses to the Sustainable Farming Scheme (SFS). Based on consultation responses and stakeholder discussions the proposed scheme outline was published at the end of 2024. The scheme is expected to come into effect from 1 January 2026, with finalised details available in summer 2025.

The design of the SFS aims to support farmers in producing food sustainably while addressing environmental challenges. It aims to encourage practices that enhance biodiversity, improve animal welfare, and promote economic resilience in the agricultural sector.

Key points and updates to the scheme

We outlined the initial proposals in an article in March 2024. Following the consultation period and discussions with stakeholders there have been several proposed updates to the scheme.

  • Universal actions reduced: Reduced from 17 to 12 to simplify participation and focus on key priorities.
  • Tree cover target adjusted: Removed the 10% individual farm tree cover requirement; introduced scheme level planting target.
  • Animal health: Consolidated health, welfare, and biosecurity actions into a single streamlined Universal Action for better clarity.
  • SSSIs & Common Land: Management of SSSIs and common land incorporated into universal payment, with additional support through optional and collaborative actions.
  • Payment Rates: Still awaiting rates for the scheme, there are currently two types of payments; Universal Baseline and Social Value. More information to be released in summer 2025

Available actions

There are different actions available for participants.

  • Universal Actions – required of all participants of the SFS
  • Optional actions – offer a choice to prioritise or undertake the actions most important and appropriate to your circumstances
  • Collaborative actions – offer the chance to work with others to deliver change on a larger scale.

There will be a phased introduction of action. Universal actions will be introduced first, with optional and collaborative actions rolled out during the transition period from 2026 to 2029. More details regarding optional and collaborative actions will be released throughout the transition period.

Universal actions are mandatory for all scheme participants and are designed to accommodate farms in all sectors across Wales.

  • Certain actions will not apply to all farms, e.g., universal action  15: Animal Health and Welfare, does not apply to arable-only farms.
  • The number of universal actions has been reduced from 17 to 12, as outlined in the consultation.
  • Actions removed from the universal category will be available as optional actions
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Universal actions and updates

Code

Name

Aim

Changes for Nov 2024

UA1

Benchmarking

Complete an annual measuring and monitoring assessment to optimise business and environmental performance.

Has been amended to allow for selection of performance indicators from an industry-approved list instead of mandatory KPIs. Benchmarking with an industry-recognized tool will also meet this requirement.

UA2

Continuous Personal Development

Build on existing skills and knowledge with ongoing learning on a range of subjects.

Now requires six hours of learning, including Health and Safety, instead of six modules. You can choose the content, provider, and format if it aligns with Sustainable Land Management (SLM  ) objectives.

UA3

Soil Health Planning

Building healthy soils through testing to help soil health planning.

Now allows prior soil tests to count toward the 5-year testing requirement. While record-keeping under pollution regulations is no longer linked, farms must retain testing results and actions. Testing can be prioritised based on nutrient management needs, ensuring all relevant land is tested within five years.

UA5

Integrated Pest Management

Complete an annual assessment of Plant Protection Products used and alternative methods employed to reduce chemical usage.

N/A

UA7

Habitat Maintenance

Maintain the semi-natural habitats on farm to benefit grazing livestock and wildlife.

No longer includes standalone Action 10 (Ponds and Scrapes). Pond maintenance is now part of this action, while creating ponds or scrapes is optional. New habitat areas on improved land, like streamside corridors evolving into woodland or wetland, are now recognized as habitat types.

UA8

Create Temporary Habitat on Improved Land

To increase the benefits for nature through connected and diverse habitats.

An additional habitat creation type has been added since the last consultation (unsprayed spring sown cereal and protein crop mix with stubbles retained)

UA9

Designated Site Management Plans

Support enhancement of designated sites, including Sites of Special Scientific Interest (SSSI) by working with Natural Resources Wales (NRW) to have a management plan with an agreed schedule of works in place.

Now requires a management plan with NRW, including a consented schedule of works, to support SSSI enhancements. Habitat and woodland SSSIs will also be included in maintenance payments under the Universal Baseline Payment.

UA11

Hedgerow Management

Increase the size and density of regularly trimmed hedgerows to benefit livestock, carbon storage, biodiversity and landscape.

Now allows incremental hedge cutting every two years or more, with exemptions for roadsides or utilities; annual cutting is otherwise prohibited. The requirement for all hedgerows to be in "good condition" by 2030 has been removed.

UA12

Woodland Maintenance

Maintain existing woodlands to increase the benefits for livestock, nature and business diversification.

No longer requires retaining all trees or deadwood but will set conditions for felling, with felling licenses still required for over 5m³. Native ground flora must be maintained, tree roots protected, and game bird feeding kept at sustainable levels.

UA13

Tree Planting and Hedgerow Creation Opportunity Plan

Develop a plan which identifies the opportunities for planting additional trees and creating new hedgerows across your farm to deliver multiple benefits.

Now focuses on creating a Tree Planting and Hedgerow Creation Opportunity Plan to identify areas for new trees or hedges, aligning with flexible scheme-level targets. Progress on planting by 2030 is expected, with recent planting potentially included. Funding will be available through the Optional Layer.

UA14

Historic Environment

Conserve and enhance the countryside and cultural resources.

N/A

UA15

Animal Health and Welfare

Support practical, farm-specific improvements in livestock health and welfare to improve productivity.

Universal Actions on Animal Health, Welfare, and Biosecurity have been combined. The requirement for wash stations has been removed but may be supported as an optional action. Recording antibiotic use and lameness prevalence has been removed, with records maintained for veterinary use. Collaboration with farm assurance schemes aims to streamline declarations and reduce administrative burdens.

For full details of what is required under each universal action, visit the gov.wales site.

Land management scheme

In addition to the mandatory universal actions there is also a land management scheme requirement.

Scheme requirement: at least 10% of each farm is managed as habitat. This includes habitats such as species-rich grasslands, ponds, and broadleaf woodlands, as well as newly created habitats like hedgerows and woodland planting. Features like dry-stone walls or coniferous woodlands are excluded. If existing habitats do not meet the 10% requirement, farmers can create temporary habitats, with support for permanent habitat creation through the optional layer of the scheme.

Scheme Rule: at least 10% of each farm to have tree cover as woodland or individual trees was removed after concern from industry and stakeholders. Scheme wide targets will be introduced, and finance will be made available for tree planting through the optional layer.

Common Land

Support for common land in the SFS will now be provided through a revised approach. Livestock holders with common land grazing rights will receive a proportional Universal Baseline Payment, excluding habitat management, which will be supported through Collaborative Actions. Compliance with a common land code is required. Additional funding will be available for graziers in Grazing Associations who demonstrate coordinated actions and work with landowners on targeted projects like peatland restoration. Collaborative support will also encourage the creation of more common land associations, like Habitat Scheme Wales - Commons, for more comprehensive land management.

Eligibility

To qualify for SFS, farmers must:

  • Engage in agricultural or ancillary activities on agricultural land.
  • Have a minimum of 3 hectares of eligible agricultural land in Wales or demonstrate 550+ standard labour hours.
  • Maintain exclusive occupation and management control of the land for at least 10 months annually.
  • Demonstrate that Universal Actions and scheme requirements are applied to the land for all 12 months, where applicable.

Support for New and Young Entrants:

  • Equal access: New and young entrants will join on the same terms as other farmers, with payments not based on entitlements, quotas, or historical references.
  • The scheme is designed to accommodate tenant farmers, who make up most of new entrants.
  • Additional Support: Plans include mentoring, skills training, succession planning, and shared farming enterprises to aid new entrants.

Cross-Border Farm Holdings:

  • Cross-border farms must meet eligibility criteria and apply Universal Actions on their land in Wales.
  • Payments will only cover activities on land in Wales.
  • Practices carried out on a whole-farm basis (e.g., Integrated Pest Management) will not require duplication for Welsh land.

Application Process

To apply for the SFS Universal Payment, complete the Single Application Form annually, with the current period from March to 15 May 2025.

  • Ongoing Updates: Additional updates may be required during the year to confirm completion of actions not tied to the SAF deadline.
  • Simplified Administration: Efforts are being made to simplify the process by asking only for essential information and confirming actions through farm records.
  • Progress Dashboard: A dashboard in RPW Online will track your progress with actions and offer advice and support.
  • Separate Applications for Optional/Collaborative Actions: Apply separately for these actions, which may span longer timeframes.

Transition

The transition period aims to provide farmers with time to adapt gradually to the new requirements and practices. It ensures continuity of support while allowing flexibility for farms to align with the scheme's objectives. The transition which will now be from January 2026 till December 2029 will introduce the layers of optional and collaborative Actions. Actions removed from the universal layer will become available within these layers.

From 2026, you can choose either SFS or BPS via your SAF (Single Application Form). Once you choose SFS, you cannot revert to BPS, as SFS will be the primary support. BPS will phase out during the Transition Period with a 20% annual reduction starting in 2026.

Payments

Payment rates will be calculated based on scheme design and budget analysis, with details provided in 2025.

The SFS Universal Layer supports farm resilience through a Universal Baseline Payment and a Social Value Payment.

  • Universal Baseline Payment: Based on the costs and income forgone for completing Universal Actions, paid for the whole farm, including improved land, woodland, habitat, and common land grazing rights. Some actions may incur additional costs or savings, and the impact will vary by farm.
  • Social Value Payment: Reflects the societal benefits of producing food sustainably, in addition to costs incurred and income foregone. A fair and proportionate approach is being developed with stakeholders to align with Sustainable Land Management objectives.

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