MS, Deputy First Minister and Cabinet
Secretary for Climate Change and Rural Affairs : I am today
publishing the evidence base that underpins
the introduction of the Sustainable Farming Scheme (SFS).
This is a comprehensive set of evidence including the Business
Case, Integrated Impact Assessment and an updated economic
analysis.
Together, these documents cover the potential economic,
environmental and social outcomes of the Scheme. We have used the
best available data, a range of analytical tools, leading
scientists and considerable input from stakeholders. The evidence
informed the decision to implement the Scheme in
2026.
The Business Case is clear that the SFS is expected to deliver
better outcomes and better value for money than the current
system of support centred around the Basic Payment Scheme.
The economic, environmental and social benefits resulting from
the Scheme are why we have committed up to £238m to the Universal
Payment, and at least £102m towards supporting the Optional and
Collaborative Layers in 2026.
The evidence is comprehensive, but we recognise it comes with
limitations.
A lot of the data is based on modelling outputs which we must
remember are not predictions of what will happen.
I would also stress the importance of looking at this evidence
together and that individual pieces are not considered in
isolation. No individual figures or pieces of evidence tell the
whole story.
I would once again like to thank all members of the Ministerial
Roundtable who helped form the SFS published this year. Their
input, alongside this evidence, has been essential in shaping the
Scheme.
We have invested a considerable amount of time working in
partnership to design a Scheme which is accessible to all,
provides choice, enables farmers to make more of their own
management decisions to deliver the outcomes we all seek, as well
as recognises the positive actions already taken on farms across
Wales.
It is clear the Scheme has been improved considerably through
collaboration.
Under the SFS we are asking farmers to undertake actions in
return for a Universal Payment.
There will be a cost to farmers from completing some Universal
Actions, which is reflected in the possible impact on Farm
Business Incomes (FBI).
It is important to understand the economic modelling is likely to
overestimate this because, as a static model, it does not include
any of the longer term positive economic benefit to farmers from
undertaking those same actions. The SFS supports on-farm
decisions that should lead over the longer term to reduced costs,
improved productivity and better environmental outcomes. We must
also remember that many farmers may already be incurring some of
compliance costs associated with some of the Universal Actions –
the impact of this is reflected in the sensitivity analysis.
Similarly, the modelling is likely to have exaggerated the
potential changes in farm output, labour usage and FBI from the
modelled potential livestock reductions.
For simplicity, the modelling assumes a 2019 baseline and that
the habitat management guidance is mandatory. In addition, those
farmers in Habitat Scheme Wales will already be managing their
woodland and habitat, The impact of these issues is reflected in
the sensitivity analysis.
We have now moved away from prescriptive grazing rates for most
habitat types.
We have instead included a description of the outcomes we want to
achieve and have allowed farmers to make their own management
decisions based on their individual circumstances, thereby
reducing the likelihood of livestock reductions.
The published economic analysis is a partial account of SFS as it
only covers the Universal Actions.
The Business Case identifies the significant economic and
environmental opportunities of the Optional and Collaborative
Actions, for instance those aimed at improving water quality,
enhancing biodiversity and supporting more efficient, carbon
friendly farming methods.
We will continue to support farmers to maximise the benefits to
their farm businesses and for the environment by using all three
layers of the Scheme.
The resulting stability, improved productivity and greater
efficiency will support quality food production and a stronger
position in the market for Welsh farmers.
No two farms are alike. The evidence published today does not
tell us what the Scheme means for individual farms.
It is therefore critical every farmer understands what the Scheme
will mean for them and their farm, and what their likely payments
will be in 2026.
We have published a ready reckoner so farmers can do exactly that
and encourage all farmers to use it to learn more.
We are also undertaking a series of roadshows around Wales so
farmers can find out more about the Scheme and how their farm
business can benefit.
I recognise that the SFS involves change.
This Scheme is fundamentally different from the Basic Payment
Scheme, but absolutely necessary for the long-term success of
farming, food production and the environment.
It is designed to secure the future of food production while also
protecting the environment for generations to come.
It recognises farming's vital role in Welsh communities and
culture and will help to address challenges like climate change
and restoring nature.
It will support resilient and successful farms and farm
businesses.
We will monitor the impact of the Scheme and add to our evidence
base as it is delivered to ensure the Scheme is a
success.
