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The Wales Sustainable Farming Scheme and what it means for the Welsh Farmers going forward in to 2026

From 2026, the SFS will replace the Basic Payment Scheme, which will be fully phased out by 2029. This marks a major shift in how farming is supported. Instead of direct payments based on land area, the focus moves to rewarding farmers for delivering sustainable outcomes - while continuing to produce high-quality food.

The aim of the SFS is to support productive, resilient farming, alongside improvements in soil health, water quality, biodiversity, animal welfare, and long-term environmental resilience. Importantly, this is not about reducing food production - it’s about producing food in a way that works for the future.

Apply via the Government Website

The New Scheme is based around Three Layers

 

Universal Actions

The core actions that every participating farm will need to complete. There are twelve in total, covering areas including soil and nutrient management, animal health and welfare, biosecurity, business planning, and the management of hedgerows and habitats.

Completing these Universal Actions gives access to the Universal Payment, which forms the foundation of support under the scheme

The universal actions are:

  • UA1: Soil Health - Optional actions; improved soil health and multi species cover crop, sustainable production, improved water quality, water usage and flood mitigation, improved air quality and lowering anomia emissions.
  • UA2: Integrated Pest Management - Optional action; improved water quality, water usage and flood mitigation.
  • UA3: Benchmarking - Optional action; sustainable production.
  • UA4: Continuous Professional Development - Optional action; advanced continuous professional development.
  • UA5: Habitat maintenance - Optional actions; enhanced habitat management.
  • UA6: Temporary habitat creation on improved land - Optional action; creation of perminent and temporary habitats.
  • UA7: Designated site management plan (e.g. SSSI).
  • UA8: Hedgerow management - Optional action; hedgerow creation and restoration.
  • UA9: Woodland Maintenance - Optional action; enhanced woodland management.
  • UA10: Tree and hedgerow planting opportunity plan - Optional actions; woodland and agroforestry creation, and hedgerow creation and restoration.
  • UA11: Historic Environment.
  • UA12: Animal health and welfare - Optional action; enhanced biosecurity.

Optional Actions

These are voluntary and allow farmers to earn additional payments by building on what already works for their system - whether that’s improving soil structure, extending grazing seasons, reducing inputs, or enhancing existing habitats. The optional actions not already mentioned are:

  • Organic farming (support and conversation)
  • Improved public access to the countryside
  • Implementation of designated site schedule of works

Collaborative Actions

The third layer is Collaborative Actions. These involve working with neighboring farms or land managers to deliver outcomes at a wider scale, such as water quality improvements or landscape-scale habitat management. Again, these are optional and paid.

The three collaborative themes are

  • Innovation, research and development
  • Collaborative market and supply chain
  • Collaborative landscape scale activity

A lot of attention has been given to habitat management, including the expectation that around ten percent of land is actively managed as habitat. For most farms, this is about making better use of what’s already there - hedgerows, field margins, diverse grassland, and less productive areas - rather than taking good land out of food production.

Grassland is central to all of this. Wales is a grass-based farming country, and well-managed grassland plays a huge role in meeting the aims of the SFS. Productive leys and permanent pastures can improve soil structure, increase organic matter, store carbon, support biodiversity, and improve resilience to weather extremes.

Change always brings uncertainty, and it’s understandable that farmers have questions about how the SFS will workday to day. Clear guidance, practical advice, and support from across the industry will be essential.

DLF: Supporting Welsh Merchants and Farmers Through the 2026 transition.

DLF is committed to supporting Welsh farmers and merchants as they adapt to the changes with the SFS. Our goal is to provide:

  • Expert guidance and support.
  • Tailoring mixtures for what farmer needs.
  • Providing the technical support required

DLF’s research-driven approach ensures that farmers can not only meet regulatory expectations but also enhance productivity, improve soil health, and strengthen long-term resilience.

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