Huw Irranca-Davies MS, Deputy First Minister and Cabinet Secretary for Climate Change and Rural Affairs
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.