Sustainable Farming Scheme – Optional and Collaborative Layers: overview of support available from 2026

This NFU Cymru briefing provides a summary of the Welsh Government overview. 

Payment for Optional or Collaborative Actions will be in addition to the Universal Payment and may include: 

• one-off revenue payments, for example for creating plans
• multi-annual revenue payments including area-based payments, for example for enhanced management of areas of habitat
• capital payments, for example for small scale equipment, or larger scale infrastructure investments

In this first phase, Welsh Government identify that the Optional and Collaborative Layers are based upon support they are already providing or have provided previously, though some of the terminology and application processes may change. 

Welsh Government intends to restrict access to certain actions to those farmers participating in the SFS Universal Layer. Some Optional Actions will be available to all farmers, however, Welsh Government intends to prioritise farm businesses participating in the SFS Universal Layer, as part of the application process.

The Optional Layer of the Sustainable Farming Scheme

Welsh Government sets out the following categories of support:

• Capital: production and efficiency 

This support is similar to the previous Small Grants – Efficiency Scheme and provides capital grant funding of between £500 and £15,000 for equipment that benefit productivity. All eligible items will be of a standard specification, for a standard available payment at 40% of total eligible cost (excluding VAT).  The list of eligible items will be reviewed and developed over time. 

This category will be available to all farm businesses which meet scheme eligibility criteria, whether claiming SFS Universal Layer or not.

• Capital: environment 

This category is similar to the previous Small Grants - Environment scheme providing capital grants of between £500 and £20,000 for eligible items of a standard specification at a standard payment rate, including:

• hedgerows: planting, coppicing and gapping up, or hedge laying
• traditional field boundaries: restoration of features including dry stone walls, earth banks, and slate fencing
• drainage, and clean and dirty water separation (cross drains, kerbing, guttering and downpipes)
• small scale tree planting - traditional varieties of orchard fruit trees, specimen planting within parklands, sabre planting in upland habitats, and small-scale field planting
• restoration of water features - pond restoration and soft engineering of riverbanks to prevent excessive erosion

This category will be available to all farm businesses which meet scheme eligibility criteria, whether claiming SFS Universal Layer or not.

• Sustainable production

This category is a brand-new method of support incentivising the livestock sector to adopt practices to improve productivity and efficiency whilst also reducing greenhouse gas (GHG) emissions.  Initial support will be focused on:

• reducing the age to slaughter of beef cattle, with support payments paid on animals sent to slaughter where the age to slaughter interval is reduced by 14 days compared to the farm baseline.  Maintenance payments will be paid on animals where the finishing age to slaughter is less than 22 months.
• sire registration with support payments available for calves registered which include the sire registration (either an official UK tag number or Artificial Insemination (AI) code). 

This category will be subject to further development and is only available to farmers in the SFS Universal Layer.

• Organic farming

This category includes support for the maintenance of organic farm businesses in 2026.  Full scheme guidance has been published within the SAF 2026 rules booklet.

Welsh Government will support organic conversion, similar to the previously available organic conversion support scheme with organic conversion payments available for the first two years.  Farmers will be able to apply for organic farming support payments from the third year.

This category will be available to all farm businesses which meet scheme eligibility criteria, whether claiming SFS Universal Layer or not.

• Habitat management and habitat creation

Farmers with a designated site, such as a Site of Special Scientific Interest (SSSI), are required to complete a designated site management plan (DSMP) with Natural Resources Wales (NRW) as part of the Universal Actions. The DSMP will contain a schedule of works (SoW) which is likely to include a set of area-based actions, plus supporting capital works. 

Farmers that wish to undertake enhanced habitat management or permanent habitat creation who do not have a SSSI, will need to request a Habitat Review with a field support officer via the SFS dashboard to develop a five-year farm specific management plan containing a SoW.  This SoW will contain a set of habitat actions, and potentially some supporting capital works.  There may also be opportunities to create new permanent habitats. 

Farmers will apply for the funding at the Optional layer to implement the SoW.   Payments will be in addition to the UA5: habitat maintenance payments available under the Universal Layer. 

These Optional Actions to enhance habitat management and create permanent new habitat are only available to farmers in the SFS Universal Layer.

• Temporary habitat

This Optional Category is derived from the Growing for the Environment Scheme and provides support to create areas of new temporary habitat on agriculturally improved land.

A technical specification will be available for each temporary habitat (including seed mixes, application rates, minimum cultivation requirements, establishment and retention periods) prior to the application period.  This list will be kept under review and temporary habitat types may be added or removed in future years. 

Payments will be made per hectare of temporary habitat created and the maximum funding available is £5000 per year.

This category will be available to all farm businesses which meet scheme eligibility criteria, whether claiming SFS Universal Layer or not. It will only be available to farmers claiming the SFS Universal Layer where they have already met the 10% habitat threshold.

• Woodland management  

This woodland management category will build upon UA9: woodland maintenance in the Universal Layer to support farmers to bring broadleaf, coniferous and mixed woodlands into active management. Capital items will be available to manage woodlands including fencing and gates, control of Invasive Non-Native Species (INNS) and tree surgery.  Capital payments at standard rates will be available. 

This category will be available to all farm businesses which meet scheme eligibility criteria, whether claiming SFS Universal Layer or not.

• Woodland creation 

Welsh Government’s refreshed woodland creation support became available in March 2026. Full details of technical requirements, payment rates and application processes can be found here: 

·         Small grants woodland creation for small scale planting of up to two hectares on low sensitivity areas

·         Woodland creation grant for larger scale planting of two hectares and over, or on more sensitive areas

·         Woodland creation planning scheme to support the development of new Woodland Creation Plans for planting over two hectares, and areas not suitable for the Small Grants Woodland Creation scheme

Under UA10: tree and hedgerow planting opportunity plan, farmers are required to identify opportunities for new tree planting by the end of the first year and undertake a minimum of 0.1 hectare of new tree planting, or 250 trees, by the end of 2028 (or at least with a planting application submitted, for planting by end March 2029).   Farmers may choose to use this woodland creation support to fund this planting.

This category will be available to all farm businesses which meet scheme eligibility criteria, whether claiming SFS Universal Layer or not.

• Small infrastructure 

This category is similar to the previous Small Grants – Yard Coverings with capital grant funding available for small scale infrastructure, primarily farmyard roofing designed to separate clean and dirty water around exposed farmyards where manure and slurry is produced or stored.

Each item will have a technical specification with detailed requirements, including where relevant, associated handling facilities, drains, bunds and storage capacity.  Welsh Government will provide support of between £3,000 and £15,000 based on a standard rate per metre square at 40% of total eligible cost (excluding VAT).

This category will be available to all farm businesses which meet scheme eligibility criteria, whether claiming SFS Universal Layer or not.

• Infrastructure and equipment 

This category is similar to the previous Nutrient Management Investment Scheme with capital grant funding available for large scale farmyard infrastructure investments and other equipment selected to improve nutrient management, reduce on-farm pollution and improve biosecurity. 

Welsh Government will provide support of between £12,000 and £50,000 at 40% of total eligible costs, based on the lowest of three quotes.  The Welsh Government contribution will be higher (at 50%) for certain items in relation to slurry storage and management.  Submission of a planning application will be required as part of the application process. 

The nutrient management related funding under this category will be available to all farm businesses which meet scheme eligibility criteria, whether claiming SFS Universal Layer or not. 

The biosecurity related funding will only be available to farm businesses who have entered the Universal Layer and have completed the biosecurity assessment required under UA12: animal health and welfare.

Operational implementation of the Optional Layer

Farmers will apply for most Optional Actions through a dashboard being developed on RPW Online.  Scheme guidance including details on scoring, application processes, supporting evidence and variations to eligibility specific to each category will be published in advance of applications opening.

All categories will be available to farm businesses which have entered the Universal Layer.  If an Optional Action relies on a Universal Action being completed beforehand, such as a requirement for Designated Sites Management Plan, the Optional application will only be made available once the relevant Universal Action has been completed.

The following categories are only available to farmers who have entered the Universal Layer of the SFS: 

• sustainable production
• designated sites 
• habitat review (habitat management and creation of permanent habitats)
• infrastructure and equipment - biosecurity items

The Collaborative Layer of the Sustainable Farming Scheme

Welsh Government sets out the following categories of support:

• Innovation, research and development

A blend of collaborative, coordinated activities delivered by government, commercial and academic stakeholders working together including initiatives such as the Agri-Food technology challenge fund.

• Collaborative market and supply chain

An extensive programme of advisory services, discussion groups, and tailored development programmes to help farmers adapt to modern supply chains such as the Clusters Programme, the Helix Programme and Cywain.

• Collaborative landscape scale activity

Welsh Government support for collaboration between farmers, foresters, land managers and other organisations to work together at a landscape, catchment, or regional level to deliver outcomes that cannot be delivered on a single farm. Support for collaborative landscape activity includes the continuation of three existing mechanisms including:

• Ffermio Bro - Farming in Designated Landscapes
• Habitat Wales Scheme (Commons), extended for 2026 for those Grazing Associations holding agreements in 2025, to continue supporting coordinated grazing arrangements on these important sites.
• Integrated Natural Resources Scheme (INRS) - a competitive, project-based scheme. Collaborative groups can apply for capital and revenue funding to implement nature-based solutions at the appropriate scale, targeting action to enhance and sustainably manage our natural resources.  Welsh Government are currently reviewing the scheme before opening the next application window which will focus on improving water quality.