The Basic Payment Scheme (Tapering, Payment Entitlements and Closure) (Wales) Regulations 2025: integrated impact assessment
An assessment of the impact of The Basic Payment Scheme (Tapering, Payment Entitlements and Closure) (Wales) Regulations 2025.
This file may not be fully accessible.
In this page
Summary of proposal
The Basic Payment Scheme (BPS) is being tapered from 2026 until its closure on 31 December 2028. This transition is part of the Welsh Government’s move to the Sustainable Farming Scheme (SFS) under the Agriculture (Wales) Act 2023. Key changes include tapering of annual payments, closure of the Young Farmer Payment scheme to new claimants, changes to BPS transfer and lease of entitlements with land only, and closure of National and Regional Reserves for new BPS entitlements. These measures aim to support the transition from BPS towards the SFS between 2026 and 2029.
Impact Assessments
Children’s Rights Impact Assessment
The proposal does not directly affect children’s rights. However, due regard has been given to the Welsh Government’s statutory duties under the Rights of Children and Young Persons (Wales) Measure 2011.
Equality Impact Assessment
The tapering and closure of BPS may have varying impacts across different farm types and rural communities. Small and upland farms may face greater financial pressure, which could indirectly affect equality outcomes. No direct equality impacts have been identified. Other farm support through SFS will be available from 2026.
Welsh Language Impact Assessment
All scheme documentation and communications will be available bilingually, ensuring compliance with the Welsh Language Standards.
Economic Impact Assessment
The tapering of BPS payments is expected to reduce individual farm business income for BPS claimants, if they do not take up the support available from SFS.
An estimated £28.7m reduction under the 80% scenario and £57.4m under the 60% scenario. Aggregate Farm Business Income (FBI) may decline by 9.6% and 19.3% respectively. Redistributional impacts will vary across farm types depending on reliance on BPS.
Overall, the BPS and SFS Universal budget will remain unaltered for 2026. The overall economic impact on the industry is expected to be significantly mitigated through the provision of replacement funding under the SFS Universal Scheme in 2026.
Environmental Impact Assessment
No significant changes in land use, stocking, or nutrient inputs are expected under taper scenarios. Existing CoAP regulations continue to drive reductions in nitrogen fertiliser use and dairy excreta.
Rural Proofing
The BPS is a direct aid support scheme for farmers and therefore benefits rural communities. The tapering policy and closure of BPS are designed to support a managed transition to SFS, which includes universal, optional and collaborative layers of support from 2026 onwards.
Consultation
A public consultation was conducted in 2023 on the future of agricultural support in Wales. Stakeholders including farming unions, environmental organisations, and rural communities broadly supported the phased transition and the principles underpinning the new support framework. Feedback informed the tapering mechanism, closure of National Reserve, limit access to new Young Farmer payment claims and restrictions on entitlement transfers.
Monitoring and review
A review is recommended three years post-implementation to assess the impact of the transition to the SFS. Monitoring will focus on uptake of SFS, environmental performance, farm resilience, and economic viability. Baseline data from the Integrated Modelling Platform (IMP), Farm Business survey, and SFS enrolment metrics should be used.