Decision time in Wales as Sustainable Farming Scheme opens

Farmers in Wales must decide within the coming weeks whether to apply for the new Sustainable Farming Scheme (SFS) or remain in the legacy Basic Payment Scheme (BPS).

Farming businesses are obliged to notify the Welsh Government of their decision using the annual Single Application Form (SAF).

The deadline for submission is 15 May.

SFS overview

The SFS, which has been in development for several years, is based around three ‘layers’ of options – Universal, Optional and Collaborative.

However, only the Universal layer is currently available.

The Government has promised further details of the Optional and Collaborative layers – which will allow farmers to boost their support payments by undertaking more targeted and specific actions – by the end of March, to help farmers plan.

But these additional actions will not be open for applications until later in the year.

Summary of SFS Universal Actions

Farmers who enter the SFS will be required to meet 12 Universal Actions, assuming they are relevant to their farm.

The detail of each of the requirements is set out in the official guidance. However, below is a high-level summary:

UA1 Soil health – 20% of fields containing improved land should be soil tested each year, so all relevant land is tested in a five-year period.

UA2 Integrated Pest Management – Record use of all Plant Protection Products (PPPs) used and complete an IPM assessment.

UA3 Benchmarking – Complete an annual measuring and monitoring assessment to benchmark performance.

UA4 Continuous Professional Development – Complete six hours of CPD learning per year, plus an additional mandatory health and safety element.

UA5 Habitat maintenance – Maintain the habitats on your farm in accordance with relevant guidance.

UA6 Temporary habitat creation on improved land – Create new habitats to meet a scheme requirement for 10% habitat on each farm.

UA7 Designated site management plan – Improve the management of designated sites by agreeing a management plan with Natural Resources Wales (NRW).

UA8 Hedgerow management – Stop cutting hedgerows in successive years, other than in limited circumstances, and let hedges grow taller and wider.

UA9 Woodland maintenance – Manage any blocks of woodland over 0.1ha in accordance with the relevant guidelines.

UA10 Tree and hedgerow planting opportunity plan – Create a plan showing where there are opportunities to plant trees and hedgerows and plant at least 0.1ha of trees by the end of 2028.

UA11 Historic environment – Where scheduled monuments, historic environment features, registered parks and gardens and traditional farm buildings are present they should be monitored, maintained and protected.

UA12 Animal health and welfare – Complete an Animal Health Improvement Cycle (AHIC), carry out a biosecurity assessment for incoming animals, ensure all boundaries are stockproof and undergo training in body condition scoring and mobility scoring.

In addition to these actions, farmers must also follow a set of Statutory Management Requirements, the majority of which were previously part of cross compliance for BPS.

Failure to meet the SMR could result in penalties, even if all the Universal actions are being met.

For example, the guidance suggests that if animal welfare issues arise because a shed on a holding is not up to standard then a sanction could be applied.

Financial implications

A ‘Ready Reckoner’ is available on the Welsh Government website to offer an indicative SFS Universal Payment value for 2026.

The BPS will be phased out over the next three years as part of the transition, with farmers who choose to remain in the scheme facing a 40% reduction in payments in 2026.

According to the Ready Reckoner, a farm of 150ha which has 135ha eligible for BPS might expect a payment of approximately £13,000. 

Under the SFS, providing they can meet all the new standards, including the 10% habitat requirement, the indicative payment value is £23,000.

However, it is unclear what costs farmers may incur to meet the standards, as not all farms will already be implementing each of the required measures.

Our team can help you assess the financial and operational implications of each option. Given that farm incomes remain under pressure, now may also be the time for a more strategic review, to consider your long-term vision for your business and how that might impact on land use and any diversification opportunities.

Our team is experienced in carrying out whole farm business reviews, succession planning and business restructuring, providing actionable recommendations that will help build resilience and achieve sustainable growth. Contact Duncan Lang, Tom Price or Tom Pullin to find out more.