Wales’ new Sustainable Farming Scheme (SFS) went live on January 2, 2026, marking a pivotal shift in agricultural policy following the UK’s departure from the European Union. The scheme, years in the making and born from significant industry protests, aims to replace the previous EU-based subsidy model with a greener, more sustainable approach.
The Shift Away From Land-Based Payments
For decades, Welsh farms received over £300 million annually in EU subsidies, distributed primarily based on land ownership. The SFS represents a complete overhaul of this system, requiring farmers to meet a set of environmental criteria to qualify for payments. This includes dedicating at least 10% of their land to habitat management, a condition many dairy farmers claim they cannot meet.
Industry Response and Political Debate
The implementation has been met with mixed reactions. The Farmers’ Union of Wales (NFU Cymru) acknowledges the scheme is now “acceptable to the industry” after what they describe as an “enormous rollercoaster” of negotiations. Rural Affairs Secretary Huw Irranca-Davies hails it as a “landmark moment” for Welsh agriculture, yet acknowledges the crucial test will be farmer participation.
The debate extends across the political spectrum. Welsh Conservatives criticize the SFS for prioritizing environmental targets over food security, while Plaid Cymru calls for a more gradual transition with multi-year funding guarantees. Reform UK argues the scheme undermines the rural economy, and the Green Party urges for increased investment to match the scale of the required changes.
Key Requirements and Financial Implications
Under the SFS, farms must commit to 12 “universal actions”, including maintaining hedgerows, reducing pesticide use, and engaging in sustainable farming education. Additional funding is available for more ambitious environmental projects. Farmers face a choice: join the SFS and meet the criteria, or stick with the old subsidies while accepting a 40% payment cut this year.
Concerns and Uncertainties
Despite improvements, some farmers express concerns about the scheme’s feasibility. Dairy farmer Gethin Hughes, while supportive of the changes, notes that many colleagues lack the necessary habitat land and may be forced to reduce livestock. Environmental groups like RSPB Cymru argue that the entry-level payments may only maintain existing habitats, rather than driving significant ecological restoration.
The success of the SFS hinges on farmer adoption and the Welsh government’s commitment to long-term funding. The scheme’s true impact will unfold as farmers navigate the new regulations and the government assesses participation rates in the coming months.
