The Welsh Government’s announcement of a £340 million annual budget for the Sustainable Farming Scheme (SFS) provides one thing that farmers have repeatedly asked for: certainty. A guaranteed, ring-fenced budget running until 2030 allows family farms to plan ahead with greater confidence after years of annual funding decisions. Both the Farmers’ Union of Wales and NFU Cymru welcomed the move, noting that multi-year settlements are far better suited to the long-term nature of farming businesses.
However, certainty is only valuable if the funding is sufficient. The reality is that the £340 million annual allocation is broadly the same level of support Welsh farming has received since 2012. Over that period, inflation has dramatically increased the cost of fuel, fertiliser, feed, machinery, labour and borrowing. In real terms, many farmers will argue this amounts to a significant reduction in support, despite the headline figure remaining unchanged.
That concern is reflected across the industry. Farming organisations have consistently argued that closer to £500 million per year is now required simply to maintain the sector’s viability in the face of rising costs. Even those welcoming the announcement, including NFU Cymru and the Farmers’ Union of Wales, made clear they would still like to see a larger settlement in future.
The challenge for ministers is that Welsh family farms are being asked to do more than ever before. They are expected to produce high-quality food, enhance biodiversity, improve water quality, reduce carbon emissions and support rural communities, all while operating within increasingly tight financial margins. Environmental improvements require investment, but so too does maintaining productive, profitable farm businesses.
This is why Welsh Conservative Shadow Farming Minister Andrew RT Davies described the settlement as falling “far short of what farmers warned is required”, arguing that real-terms cuts in support risk damaging one of Wales’ most important industries. That criticism deserves serious consideration. A funding settlement that stands still while costs continue to rise inevitably means farmers are expected to deliver more with less.
Welsh family farms have consistently demonstrated their willingness to adapt and embrace sustainable practices. What they need in return is not only policy stability but a funding settlement that reflects today’s economic realities. Without that, the long-term resilience of Welsh agriculture, and the rural communities it sustains, will remain under unnecessary pressure.
