Welsh farmers gain three years of funding certainty

demoduck.co.uk editorial team 2026-07-21 13:39 3 min read

A Welsh farmer on a quad bike herding a flock of sheep

By the demoduck.co.uk editorial team
Published 21 July 2026

Welsh farmers have been guaranteed £340 million a year for three years under a settlement worth £1.02 billion. The funding will support the Sustainable Farming Scheme through to March 2030, replacing the annual budget decisions that left agricultural businesses with only 12 months of certainty.

The Welsh Government confirmed the commitment at the Royal Welsh Show. Its announcement, published and updated on 19 July 2026, divides each annual allocation between the scheme’s Universal layer and its Optional and Collaborative Layers.

For farm businesses, the central change is the length of the commitment. The announcement fixes the overall annual budget for three years, although it does not specify how much any individual farm will receive.

£340 million secured each year to March 2030

The three-year settlement provides more than £1 billion in total because the £340 million annual allocation will be repeated three times. It delivers a pledge made during the Plaid Cymru Government’s first 100 days to establish a multi-annual Sustainable Farming Scheme budget.

Funding commitment	Confirmed amount
Annual Sustainable Farming Scheme budget	£340 million
Universal layer each year	£238 million
Optional and Collaborative Layers each year	£102 million
Three-year total	£1.02 billion

The figures describe the money available across the scheme rather than guaranteed payments to particular holdings. Eligibility, participation and the actions delivered through each layer will still determine how the funding reaches individual farms.

Universal layer receives £238 million annually

The largest portion of the settlement is the guaranteed £238 million a year for the Universal layer. This is the core level of the Sustainable Farming Scheme and includes the Animal Health Improvement Cycle, known as AHIC.

A further £102 million a year is allocated to the Optional and Collaborative Layers. Optional Actions allow additional activity beyond the Universal layer, while the announcement identifies the Integrated Natural Resources Scheme as a key element feeding into the Collaborative Layer.

Together, the two allocations account for the full £340 million annual commitment. The Welsh Government has not provided a more detailed division of the £102 million between Optional and Collaborative activity in this announcement.

Longer settlement changes farm planning horizons

Until now, farmers had only a year’s visibility of the funding available. The new arrangement extends that horizon to March 2030, giving businesses a confirmed scheme-wide budget against which they can consider investment and operational decisions.

Cabinet Minister for Rural Resilience and Sustainability Llyr Gruffydd said 12 months of notice was insufficient for business planning. He described certainty and stability as a clear request from farmers and said the multi-year settlement was intended to answer it.

The commitment provides certainty over the size and duration of the overall programme, but it should not be read as a forecast of farm income. The announcement does not set out individual payment calculations, farm-level awards or the conditions attached to every future Optional and Collaborative action.

One vet visit could meet two requirements from 2027

The funding decision was accompanied by an early attempt to reduce administrative duplication. Following initial feedback from an independent review led by John Davies, the Welsh Government will simplify the AHIC requirements within the Universal layer.

Officials plan to work with interested farm assurance schemes to align their requirements with Sustainable Farming Scheme compliance. Farmers participating in an aligned scheme would complete one form from 2027, with a single veterinary visit serving both farm-assurance and scheme-compliance purposes.

The change retains the working relationship between farmers and their vets while reducing duplicated paperwork. Its reach will depend on which farm assurance schemes choose to participate in the alignment process.

Some Optional Actions are also due to be rolled out later in 2026. A new application window for the Integrated Natural Resources Scheme will open later in the year, providing the next confirmed step for activity connected with the Collaborative Layer.

Source: Welsh Government Announcements

Context & actions About this article

Source check Source trail

The figures, dates and policy changes were checked against the Welsh Government announcement published on 19 July 2026.

Checks

Confirmed the £340 million annual commitment runs for three years to March 2030.
Checked that £238 million is assigned to the Universal layer and £102 million to the Optio...
Verified that aligned AHIC and farm-assurance paperwork is planned from 2027.
Distinguished the scheme-wide budget from unconfirmed payments to individual farms.

Welsh Government Check wider coverage