National Assembly for Wales

Good morning, everyone. Welcome to the Economy, Trade and Rural Affairs Committee. It's a pleasure to welcome the Deputy First Minister and his officials today. We have no apologies; we have full committee membership. The translation service is available for those who wish to use it, and it is broadcast on Senedd.tv. I invite Members to declare interests. I'll be the first to declare an interest with my interest as a partner in a farming business. Any other interests or declarations to be made?

I'm an honorary member of the British Veterinary Association.

Sorry, I've got to declare an interest as an honorary member of the BVA, but with no pecuniary interest whatsoever—purely an honorary role. 

Okay. Thank you, Minister. 

Could I, first of all, welcome officials and the Minister himself to the committee meeting for our inquiry into the sustainable farming scheme and its roll-out and development? Could I invite the officials to introduce themselves for the record and state the role that they play in the department, and then we'll go straight into questions—starting to my right, if possible, and working across the line so that everyone knows where we're at?

Bore da, pawb. Gian Marco Currado, rural affairs director. 

Bore da. Mark Alexander, responsible for the land management reform division, with responsibility for the sustainable farming scheme. 

Bore da. Naomi Matthiessen, deputy director for landscapes, nature and forestry. 

Great. Minister, in November, you, obviously, announced some of the changes that you proposed to make to the sustainable farming scheme. Could you enlighten us today as to maybe when we might see the final scheme coming forward so that farmers know what they're working to and, importantly, the budget lines that you might be working to as well, because, obviously, we all want to see a successful scheme and part of that success depends on the budget. 

Yes, indeed. On the timetable, we've been very clear. It's important to give real clarity to farmers. We will be bringing forward the finalised version of the scheme before the summer, which then gives a good six months and more before the introduction of the scheme in January 2026. And there is, as you'll know from your discussions with farmers in the Vale but also throughout Wales as well, a demand for clarity and certainty. So, we've been consistent on that, and the work is progressing very well to deliver on that as well. 

In terms of the budget, the budget for years ahead is not decided until the budget is decided for the years ahead, but what we have been able to do so far—and I know that it has been asked by a member of the committee before, 'Is this an indication of the way forward?', but I'd caution against saying that—we have been able to give clarity on the basic payment scheme payments currently ongoing. We're very aware of the calls out there to at least match the quantum of funding that's currently going into the existing schemes, but we're also aware of the calls out there, Chair, for funding that exceeds that to the tune of £500 million, £600 million, £700 million more as well. So, we will have to decide the budget when we know what budget we have passed to us from the UK Government, and we'll make our decisions. But, I can give you the assurance that the whole of Cabinet realises the importance of this scheme in delivering not only for sustainable food production but also for climate resilience, nature restoration, nature and biodiversity as well. There's real clarity in Cabinet on that.

Two things from those answers, if I may, Minister: are we talking meteorological summer or political summer, because I think that's an important consideration? Most people would most probably be prepared to put 10p on the Royal Welsh Show as a given date when an announcement might be made. [Laughter.] Could you give a bit more of an indication of the length of the summer that you're looking at, because I think that that would be very welcome? I appreciate that there are lots of work streams ongoing and planning sessions ongoing, but I think some clarity from you as to exactly—roughly—when in the summer we'll be talking about would be helpful. 

And then, on the budget, I appreciate that the comprehensive spending review hasn't come forward from the UK Government, but are you a Minister who believes that, at the very least, the quantum of money that goes into the BPS payment would be a starting point for you opening discussions with the finance Minister here in Cardiff Bay, given that the committee has received evidence from the farming unions and the conservation groups that anything between £500 million and £600 million would be required to reinstate the inflation lag, shall we call it, because, obviously, the uplift hasn't happened for about seven years now in BPS payments?

So, on the funding, I think I've always made clear that, as we've moved from the EU withdrawal to the post-Brexit situation to going forward, the demands that we have on farmers and land managers more generally are signally different from what we’ve been requiring of them before. We can frame this in terms of the sustainable land management objectives, but we can frame it in terms of what a person in the street might well understand. We’re asking those farmers to produce—and there’s a role for the taxpayer within this—that good sustainable food, to high animal welfare standards, but also to deal with those wider imperatives described with the SLM objectives, which include, by the way, a type of farming that is important to Wales. And that includes the cultural importance, it includes Welsh language, it includes having thriving farm businesses that send their children to local schools as well. We’re asking them to do all the food production, and that, and climate resilience and—. By the way, the climate resilience piece and the nature piece are also integral to the resilience of farms going forward with the changes that we’re seeing in the climate.

So, on that basis, what I can say to you is that my view as a Minister is that we need to achieve the quantum of funding in going forward to the SFS that reflects that. So, it’s not a traditional EU model, it’s not CAP payments—not pillar 1, not pillar 2. It’s a different type of support that will need to sustain a type of farming that delivers social value and more to Wales, a type of farming that delivers those wider environmental goods as well, and food. I think that’s probably as much clarity as I can give you at the moment, but if you reflect back on my previous decisions over the last 10 months in safeguarding the BPS going forward, I think that reflects exactly what I’ve just said: we need to give certainty for now and then transition to the right set of demands on farmers, going forward, but they are significant demands on farmers and land managers, going forward.

On the timescale, we always look forward to the Royal Welsh Show, and we always like to engage with the farming community at the Royal Welsh, and sometimes it’s nice for Ministers to go and say, 'And here’s something good to say', as well. But, actually, the work that we’re doing on this is going on right now, so we’re hopeful that, during this parliamentary term up to the summer, we’ll have done most of the work, but we’ll probably have to do a bit of finessing as well, which might lead us up to those early weeks of the summer.

So, it's fair to say that, as we sit here in February, there is no given date in the diary, pencilled in, for this announcement, and there's no idea in your mind of the quantum of money that you would like to put into this if you were starting negotiations with the finance Minister—that is a revolving door at the moment.

They are ongoing discussions, and the finance Minister is very, very clear of exactly the imperatives I’ve laid out to you. It’s why we’ve been able to secure the level of the funding that we have in the budget for this year going ahead. And I’ll continue to have those discussions with the finance Minister and with the wider Cabinet as well, because this is a question of priorities across the Cabinet.

And in terms of the timescale, in my head I’ve got dates pencilled in, but there is nothing firm in there yet, Chair. But we’re happy to share that with you when we have a much firmer timetable. But, certainly, the Royal Welsh is something that we always look forward to.

Given the work that's gone on since you made the announcement at the end of November, are you seeing that work progressing as you'd expect it, or are there areas that do cause a little bit of concern that the progress isn't as fast as you'd like to see it? And if that progress isn't being made in the time you want it, what's the plan B, given that you've given the summer as the announcement date, so that you've got a backstop that you've got to work to?

There's no plan B, because the work is progressing exceptionally well. So, the colleagues I have around the table are only the, if you like, ministerial side of the key people, but there are teams underneath this. But, more importantly, actually, it's the officials group who are continuing their work, and the ministerial round-table, but it's also the establishment of, for example, the group specifically that has been constituted now to look at trees and woodland cover and that aspect. I believe, Naomi, that group will meet for the first time tomorrow. 

Yes, it will.

So, they'll be well under way, and I'm sure that's something we'll return to. So, actually, the momentum that we had through last year is being continued now, but it is a slightly different focus now; slightly different—it's quite signally different. So, when we got to the scheme outline, which was really good to see, I have to say, I credit all those who were part of the engagement here with stakeholders on the ministerial round-table, not just through the hours that they gave, but their willingness to step forward and say, 'We've got to a place where we're broadly content the scheme outline is right. We've made changes, we've listened, we've made changes.' But that was only the first big stage. This stage now, we actually pivot to work on the modelling, the economic analysis, the detailed business modelling around each single element—where's the balance that should be between the universal layer and then the optional and collaborative? All of that, and also the work on the trees piece well. So, that now accelerates into that, so that, by the summer, we have all of that ground out, and we can give farmers complete certainty, 'Here is a scheme that is accessible, that will drive all the imperatives around the SLM objectives', and that they can prepare then for the year ahead.

So, we don't have a plan B. We've always said we will give certainty. Plan A is the plan, working with farmers, with landowners, with environmental groups, with the Woodland Trust, with lots of other people, to say, 'We will deliver this on time and farmers can then plan ahead', because, as you know, what farmers need is certainty and they need the ability to walk into their bank managers and say, 'We can see now five years' horizon, at least.' And that's what we intend to give them by this summer.

It's important that they walk back out from the bank manager as well and that they're not flat on the floor. So, that certainty will be very welcome, it will be, to say the least.

And just one final point from me, Deputy First Minister. Obviously, Rural Payments Wales will play an important role once the scheme is devised and seeks to be rolled out next year. Are you confident of the capability of Rural Payments Wales to, obviously, make the adaptations to fit into the new scheme and provide the governance and the certainty around the scheme so that it can go live on the date that you've chosen?

Yes, we are, but I might turn to somebody who's got great experience on the day-to-day of this as well, to my colleague Gian Marco here. But what we've tried to do within this is, again, listen to farmers, as one of the asks that we've had is, 'Can you work with what we're familiar with and fine-tune that and make it straightforward, make it simple, easy to understand?' So, relying on the RPW online payments, but also the single application form as well, is a good to way forward. And, yes, we have the confidence that they have the capacity to now translate what they've been doing into the SFS, going forward. But, Gian Marco, you're closer to the ground.

Just before Gian Marco comes in, could I just, as a trivia question, seek, Minister, clarity from you: were you in the DEFRA department when England changed their scheme back in 2005-06?

No, just before my time. I was in the—

You didn't bear the scars of that, you didn't, did you?

No, I was in the—. No, I don't bear the scars of that.

That's all right.

Yes.

Gian Marco.

Thank you very much, Chair. Just to add to what the Deputy First Minister said, we've built the delivery model on the RPW existing delivery model, so learning from our delivery of BPS, the EU rural development programme, as well as some of the rural investment schemes, and a lot of the changes that we proposed, or the suggestions that we made in the consultation that we've taken through into the scheme outline, are really about building on that routine that farmers are comfortable with, they know about—so, the annual SAF declaration, which we've done this year for Habitat Wales 2025, for instance, and using the RPW user groups that work very well. All that work has been happening in parallel to the policy development. We're working hard on the operational delivery, trying to make it as user-friendly as possible for farmers, and as recognisable as possible based on what they're doing already.

So, similarity would be quite a common theme through the regulatory side of this that RPW would be picking up on. I think that's what I'm interpreting you're saying. There won't be great fundamental changes. You'll look to try and roll over quite a lot of the inspection stuff that is already in the scheme.

If I may, one of the things we are looking at is where we can take advantage of some of the flexibility that we've now got, because we're not operating within the EU system. So, for things like compliance inspections, we're looking to see what we can do to work both more collaboratively, but also more efficiently, with farmers. So, to give you one example that's related to that, the data confirmation exercise that we ran last year was starting to move in that space. It was about saying, 'Here's the data that we hold,' to farmers, 'Feel free to come back and tell us whether you think it's right or wrong, and we'll work together with you to refine it.' So, we are building on a known and existing structure, but taking advantage, where we can, of the flexibilities that we now have, because we're not in the same rigid EU structure that we were before.

We're not in the EU, yes.

It's worth pointing out, Chair, as well—you were asking about the work that we're doing and the momentum we're doing it—that this was the topic in the first meeting of the officials group after Christmas. So, in case anybody thought that we announced the SFS and then we all went on a lovely holiday to the Caribbean for a month, no, the meetings continued. This was the one they were discussing.

I thought you were going to wink at me when you said 'holiday', then. [Laughter.] Sam.

Thank you. Obviously, with the roll-out of the Habitat Wales scheme, there were some serious concerns around the quality of the mapping online on that. So, will farmers be able to—? Firstly, then, what lessons have been learned from the roll-out of the Habitat Wales scheme for digitisation of this future scheme, and will farmers be able to use third-party farm mapping for elements of the SFS? Will they have a conversation digitally, so that farmers aren't having to duplicate?

I might bring Gian Marco or Mark in in a moment, but, yes, the HWS was quite useful in the sense that we had a lot of feedback saying, 'Well, this doesn't reflect the reality on my farm.' So, we went out last summer and we really pushed hard, with the support of the farming unions as well, I have to say, to say, 'Can you please get involved if you think this is wrong?' There was a pretty good base there, but we were getting people saying, 'Na, you don't know my fields like I know my fields.' So, we said, 'Right, help us.' There was a great uptake, actually, in response to that, with the support of the farming unions, of people coming back and saying, 'We can help you.' And we made it very, very clear, Sam, that this was not going to be used to penalise people, this was to help, actually, in the transition to the SFS. I think we might be actually continuing that exercise, going forward, as well. But can you deal with the third-party issue as well?

Yes, maybe if I could just build on what the Deputy First Minister said there. The data confirmation gave us a lot more information, so it's allowed us to update our systems and the data we hold. We do intend to repeat that again this year, so it's another opportunity, a very similar approach, and then there will be a third opportunity when the single farm application, or single application form, comes in in 2026, for a further opportunity to update it as well for farmers. So, we're providing as much choice and time for the farmer to do it. Obviously, that SAF in 2026 is the critical deadline, so we're helping people to get to that point in an easy way.

Use of third-party mapping should help that process that I've just talked about. I'm not sure that it's something that we will specifically build in to be connected to the RPW online, but what we're trying to be is as efficient as possible.

Okay, thank you.

Jenny, you've got a supplementary.

On that very point of efficiency, clearly, it's very important to go and visit the specifics on individual farms with those who want to engage, but how much are you using artificial intelligence, like Google Maps or drones, to capture the landscape of farms that aren't engaging with this process, because driving all the way to one farm is just not efficient at all?

We're pretty good at using satellite imagery now and so on. We have been—that formed part of the HWS—but, curiously, that was why some farmers came back and said, 'Yes, but that hasn't actually captured the entirety of what we've got.' Mark.

I think you've answered the question there. We are using satellite imagery, we're using LiDAR and other information. So, we're using that, that knowledge of the farmer on the ground, together with that digital information, and bringing them together. So, there's an opportunity there to reflect on both of those pieces of evidence.

Yes, the devil's always in the details. Thank you, indeed, for clarifying that.

Jenny, yes.

Can I just move on now? Thank you very much for your paper, which indicates the huge amount of work that has been done to bring everybody together, particularly those ticks of all those different meetings that have taken place. You've decided to move some of the universal actions to the optional layer, and I wonder if you can tell us what will be the impact of not mandating these actions.

In some of—

In the ones that you've excluded from the universal actions. I'm not wishing to explore the tree option, because another colleague is going to do that a bit later, but I think things like the multispecies cover crop and the way in which that could potentially accelerate having sustainability in our land management.

Yes. Well, that’s been—. One of the most intense parts of our engagement is the requirement from the people who will do this work for us—the land managers, the farmers—to get as much simplicity in the scheme as—. And as you know, one of the asks was—. We've got 17 universal actions, and I think some people's minds were blown, and I fully understand that. So, we've done quite an exercise with the officials groups and the ministerial round-table of streamlining them back, but without compromising. So, for example, I'll turn to some of the ones in the nature and biodiversity and environment field in a moment, but, in animal welfare, for example, there were really cogent arguments being put through the officials group that, actually, we can put these together; there is an animal welfare piece that we can put together that makes it really much more understandable, but that doesn't lose any of the complexity about what we're trying to do. So, we've done that and that helped.

So, we've come down from 17 to 12, but, in that, for example, one of the ones that we've had is—. We've had a lot of debate around multispecies cover crops. Now, there is real benefit to using these crops, but there can be, if they're not used in the right way, real disadvantages to be putting them in, taking them out, digging them in, digging them out, because what you actually want is the use of a multispecies crop that, over the long term, replenishes and enhances the soil itself. So, we've got that ambition to support farmers to ensure that bare soils are not damaged or eroded during winter weather, but, based on the consultation feedback and discussion within the group, we've agreed that the better way to do this, that bare soils can be protected, is through the universal code, but that the multispecies elements can be better supported through the optional habitat maintenance and creation, so that we bolt down the benefits of that. So, there is some real subtlety in the thinking. So, we haven't compromised; we've said, 'Actually, we think a better way to do this is, for those farmers who want to really drive this forward, we will put this into the optional and they can choose to go into this and draw down the payments, then, from it.'

And then, for example, on the heavily modified peatland, we've removed the universal action 6, but we've got the same ambition to protect the peatlands, because, as you know, Jenny, they are significant emitters of carbon if badly managed, but also significant carbon sequestration sources if we do it right. So, we've agreed, again in detailed discussion, that these can be better enhanced through the optional layer, where we take a much more targeted approach, then, carefully map and consider the needs of individual sites.

And the other one is ponds and scrapes. So, we've lifted—. Instead of doing this all through the universal actions there, we've removed universal action 10, which was ponds and scrapes, but the ambition holds again. So, what we've done is we've included the management of existing wildlife ponds within UA7, so existing—it's important, the terminology here—wildlife ponds within UA7, because we don't want to lose any of those, where they'll also, by the way, be able to contribute to the 10 per cent habitat, because they are a part of that. But the creation of new ponds and scrapes, which we do want to incentivise, can then be supported in the optional layer, where farmers who think that these water features can be really integrated within their farming will provide the best value.

So, there is some real subtlety in the thinking. So, far from compromising or rolling back from it, we just thought, 'Where do you best drive the incentive for those farmers who want to deliver more ponds and scrapes, do more peatland restoration, et cetera?' But, in that universal level, we've maintained the habitat.

Okay. Thank you—. Yes.

Do you mind if I just, very quickly, on ponds and scrapes—? Irrigation ponds, will they count towards habitat?

Mark.

So, it depends on their design, but some wildlife ponds will be used for irrigation, others are plastic-lined, very much specific to the purpose of just water provision for agriculture. Those probably wouldn't count, but, where there's an element of wildlife, then we would look to see that that could be included.

Great. Thank you. Sorry, Chair. Thank you, Chair.

No, it's fine. Thank you for that clarification. I suppose the other one that is more concerning for those who are speaking up for nature is that there's no longer a requirement for all managed hedgerows to be in a good condition by 2030 under the hedgerow management universal action. I just wondered why, given that it doesn’t feel like a terribly difficult thing to deliver on, but obviously you’ll tell us why not.

So, the balance here is between what we do with existing hedgerows and actually improving the quality of them, because we know that there are too many where there is a hedgerow but it is thin or it is sparse. It may be standing there as a hedgerow, but it’s not producing either any livestock function or, frankly, any wildlife corridor function as well, because of the condition of it, so it’s that balance. And this the discussion we’ve had on the officials group of, ‘What do we do to improve the condition of existing hedgerows while, secondly, incentivising the creation of more?’, and we’ve laid out the ambition, when I did the ministerial statement, on what we want to do with hedgerow creation. But, Mark, can I turn to you for, again, the subtlety of how we, first of all, get all our existing hedgerows up to the condition that we want to see and the balance between the universal and the optional then?

Sure. I think the first thing to say is that hedgerows are dynamic. They’re dynamic in their growth but also in their management. So, they’re very different; because of our environment and our landscape they have different uses. So, all of that meant that actually that ‘good condition’ definition became quite difficult to describe for all of Wales. But our ambition hasn’t changed. Our ambition is to continue to improve their quality, their opportunity for benefit for the farmer, for wildlife, for livestock. But we’re doing that through incremental growth. So, our thing here is to focus on management practice. So, we’re saying they shouldn’t be cut on an annual basis; they can be cut every two years or less frequently, and, in doing so, will incrementally grow their volume and therefore the benefits that come from it. So, that allows us to apply that consistently across all farms in Wales within the scheme. We then will look to provide support for restoration to fill in those gaps for creation of new hedgerows, double fencing, again, which allows that. And there’s an expectation of setting what ‘good condition’ looks like in terms of height and width and we’ll encourage and expect farmers to progress to that stage over the years of the scheme. In some locations, it might take 20 years to get to that size, in other locations, they may be able to do it in two, three years, but it’s recognising that differential is primarily the reason that—

Okay. Presumably, it takes account of topographical issues like windy hillside farms on the west coast.

Absolutely.

Fine. Okay.

And it’s worth saying, Jenny, as well, that this actually flows from—it does flow directly from—. We were saying that when the carbon panel, the work the carbon panel did—. We tried to take on board some of the learnings from that. They wanted to see hedgerows used not only for livestock purposes, but also for carbon and also for wildlife corridors. So, the way we’ve thought this through is very much drawing on the carbon panel's thoughts of what hedgerows should be for, as well as what they should be like, the condition of them.

Thank you. All right, moving on now to the optional and collaborative actions, how will the preparatory phase to test the new scheme that’s going ahead this year—? How much do you plan to enable that to shape the detail of the optional and collaborative? I appreciate we’re only in February, so—.

Yes, absolutely. We’re doing a lot on this already. So, for example, in the written submission that we sent to you, it gives some examples on how we’re using, for example, the integrated natural resources scheme—sorry, it doesn’t trip off the tongue, but—the INRS. So, we’re using that already to test out on the ground how landowners can work together to actually drive more interconnected habitats, habitat improvements on spatial scales. We are testing out—we’ve already made announcements—the way that, for example, graziers can work together as well within commons agreements, because we know the benefits of intelligently used grazing as well. In the year ahead, we want to try out some of those things as well. So, we’re going to use this scheme, this period, quite well, Jenny.

Okay. You mentioned specifically that it’s going to provide additional investment in agriculture and horticulture. Given that horticulture is our most challenged area in terms of food security, I just wondered if you could tell us how mentioning that by name has encouraged people to think along those lines. I note that the NFU are having a conference today on horticulture with some experts, so hopefully a lot of farmers will be paying attention.

Yes, absolutely. It feels to me like there’s a bit of a sea change coming in the way that horticulture is viewed, not just within the agriculture sector but also in the way that we’re designing the SFS. When I was at the Oxford farming conference recently, and the Oxford real farming conference—for the first time, the two of them were doing things together as well, which was quite interesting—I met there with some of those people from the, if you like, dedicated horticultural growers sector as well. Because they’re also represented, by the way, within the officials group as well. They were strongly praising the way that the scheme had been designed so that it enables farmers actually to diversify into horticulture, as we’re seeing more and more. And it’s great to see the focus now that the NFU and the unions are putting on it, but also the way that it enables horticulturalists to be part of this as well, within the way that we’ve defined who is eligible for the SFS. Gian Marco.

Yes, absolutely, Deputy First Minister. On the one hand—I think we discussed this last time in committee—we’ve given that eligibility criteria, those two options, not just size but also hours of labour, which is designed for horticultural enterprises. In terms of encouraging horticulture, our intention is to build on the two rural investment schemes that we’ve got open at the moment that we’ve had running for a couple of years and, in effect, build those into the optional action—so, again, just encourage that diversification into horticulture on farm as part of running the farming business. That is the plan: in effect, to evolve the current schemes and build them into the optional layer. 

So, Cabinet Secretary, when are we likely to see the detail of the optional and collaborative schemes?

That is the piece of work that we’re now engaged on, Jenny. It’s both the detail of those schemes, which will come forward during the run-up to this summer, but it’s also then the choice of where we put the funding into different elements of the scheme as well in order to incentivise. So, both of those—. It sounds like I’m playing a great game of hiding it until a great reveal, but the truth is we need to work this through the officials group to get it right, as we’ve done with the steps up to now.

Are you able to say anything about which of these higher tier options are being prioritised?

At this moment, once again, I don't want to pre-empt the work of the officials group. I'm sorry to appear like the Wizard of Oz here saying, 'I can tell you nothing' with a big voice booming out from behind the screen. It's simply that we really need to work this through in that collaborative way that we've done.

Be careful what Dorothy found out about the Wizard of Oz when the curtain went back.

The transitional integrated natural resources scheme, which was launched in August, how’s that going to help inform the collaborative action?

Sorry, I missed that, Jenny.

The transitional integrated natural resources scheme you announced in August. How's that going to help inform the collaborative actions, given that the environmental sector is quite anxious about how this is going to really push forward on tackling the nature emergency?

I just think this has real potential, and it’s the reason we’ve gone early on trying to pilot some of the more large-scale, spatial, collaborative approaches. We’ve got two phases for the INRS: development and then delivery. Demand has already been expressed for the collaborative landscape scheme, we’ve had 48 development applications received. We’ve got 30 agreed to move to the delivery application. Those plans need to be submitted now by March, so we need that work to be done by the applicants.

They’re really varied in the type of approach of working together that they’re looking at. We’ve got ones that are based on river catchment models, interestingly, bringing together the farming community, environmental NGOs, water industry, statutory agencies, local communities, to co-design farm business models that better integrate their natural resource management into the farm practice and farm production at a catchment scale—something that we've been keen on for a long, long time. It's coming forward because we've put the funding there to test this.

Other applications we've had have been based on common land, which has been a real theme of our discussions within the officials groups and round-tables, bringing together the farming community, the National Trust, national parks—again, focused on preserving and improving the ecological and the cultural health of Welsh common land. So, we're having great schemes coming forward, to take forward from application to delivery, and this should then, when we get to January of next year, be a clear indication of a way forward for those who want to collaborate. And we know that the benefits of the collaborative approach are significant in terms of habitat, species and wider ecological benefits.

Thank you. Obviously, you've done a great job in having stakeholders all together in the same room, but how, without sight of the full package of options, are farmers going to fully understand the incentive of joining the scheme in 2025, especially those already doing more for the environment?

Absolutely. I do understand some of the frustration of farmers who say, 'Can you tell us now what it's going to look like?', but I keep coming back to this point: it's not done yet; it'll only be done when it's all done together, when every piece of this part comes together. And that requires a degree of waiting with us while we do the proper collaborative—what I've described before as, 'It is exhausting, it is intense, but a very Welsh way of pulling this together.' It's not being designed by committee, but it's being designed with real intelligence, with real evidence and with thorough collaboration, and it means having frank conversations sometimes within the officials groups and the round-table to say, 'We're going to have to agree to differ here, but, broadly speaking, are we in a happy place?' That means we can't pre-empt those, and I certainly won't as a Minister, but we will be able to bring that forward, and that's why it's important that we deliver on this by the summer.

I think people out there, by and large, with things like the INRS, with things like we've done on sites of special scientific interest, with things that we've done on common land, with the fact that we've set up the outline already back in November, December, will have a fair idea of where we're heading; they shouldn't be greatly surprised when we get to the summer. The question is where's the balance between payment rates for different elements and the proportion that goes into the universal layer compared to optional and collaborative. But there shouldn't be any great surprises about what we're trying to do, and what, broadly, it will look like. But just a little bit of waiting here so we get this absolutely right, because what we are trying to do is bring forward a scheme that is fit not just for the next five years, but for a generation to come. And we can modify this, and we can learn and adapt it as we go forward, but we need to give that certainty. So, a little bit of waiting and we will get this right.

It is the most ambitious scheme, I would argue, in the whole of the UK. Other schemes have, if you like—. You could say that it's a simplification in some ways. But you could characterise—. Other schemes have chosen to rest more on what went before. Other schemes over the border have gone for a more piecemeal approach of a bit of environmental stuff here and a bit of this over here, and whatever. This is one scheme that is designed to give that certainty for all those SLM objectives and for the farming community in one piece. That's quite an undertaking, so just a tiny bit of patience and we will get there. But there shouldn't be any great surprises, I would hope.

All I was going to add, Deputy First Minister, if it's helpful, is two things. First, when the announcement is made in the summer, we will be clear about which of those optional and collaborative actions are available on day one, but we will also be clear about when we expect some of the others to come in through the transition period.

The second point I was going to make goes back to the conversation we were having earlier about building on tried-and-tested RPW methods, RPW systems. Farmers will have from the time of the scheme announcement to 15 May 2026, which is the SAF deadline date, to decide whether it makes sense for their farming business to join the SFS or not. So, hopefully it gives as much of that lead-in time as we can, whilst, as the Deputy First Minister said, giving enough space for that collaborative design approach that we're in at the moment.

Lots of moving parts. Thank you.

Before I ask Luke, there were two key words that came out in that session: 'ambitious', on which most civil servants look at the Minister and think, ‘That's brave', and when I'm standing next to an inspector against a hedge, I'll think of your dynamic hedge when I'm trying to determine what the hedge should look like to qualify, and the rain's going down my back.

What does a dynamic hedge look like?

Exactly. We could be here all day.

You touched on it briefly there in terms of weighting between the collaborative tier and the universal tier. I’m taking it from those answers that you're not quite sure how the budget will be weighted when it comes to those two tiers as it currently stands.

We will be sure, and we will give clarity and certainty. I just can't give it to you now because it needs to be worked through properly. These are really salient and pivotal discussions that we need to have between here and the summer.

One of the other discussions I imagine is ongoing at the moment is the discussion around the social value payment. How are those discussions panning out at the moment?

They're progressing really well. It has always been our intention to deliver social value within the scheme. I can give a little bit more detail of where we've got to. First, I can confirm that, as I've stated before, it's our clear intention to go beyond the cost incurred and income forgone, which is a big ask of the farming community, and we said we will do it. We will include a social value to represent those wider benefits to society that result from the sustainable production of food. We've defined the social value as the public value of the outcomes delivered through sustainable practice in agriculture as a result of the SFS that are not properly reflected in market prices for agricultural output and that contribute to the statutory sustainable land management objectives. We're currently, Luke, developing the evidence and the analysis to estimate the social value associated with those likely outcomes arising from the revised outline scheme. So these things are going in tandem. As we've had this discussion on developing what the scheme will finally look like, we also need to develop the social value and how, if you like, those lost market issues can be reflected in it.

We'll need to use this alongside the economic analysis that we do as well, so we get this right. But our thinking is that the social value payment would be a single payment per hectare for all farmers who enter the scheme, and it will be paid in addition to the payment that reflects the costs incurred and the income forgone. We don't expect it to be focused on spatial targeting, because one thing is that adds complexity, and there are interesting anomalies in that, because if, for example, you said, ‘Well, do we look at something like air pollution?’ or whatever, you could well end up reflecting farms closer to urban environments and less in rural—. Okay? So, one payment that doesn't reflect spatial targeting, and the other benefit is that all farmers get treated equally under the social value payment. So that's as far as we've got, but we're working through that process with the business modelling and the economic modelling.

With that methodology, the cost incurred and income forgone, that was raised in our SFS inquiry as being a significant concern, and would affect take-up. How is that reflected in what you've just said?

Do you want to answer that?

The ultimate payment the farmer will receive is the combination of the two. So it's the income forgone, cost incurred, plus the social value, and that's paid against the universal actions and completion of those actions. So the income being received is that universal payment—that's what we've called it—but it's the addition of all of those elements. And within that is that top-up if they've got woodland or additionality if they've got habitat as well. There are a few layers in there that will reflect the actual—. I call it ‘assets on farm’, but what is actually there in terms of improved land, in terms of habitat land, in terms of woodland and other areas.

I think one of the key things throughout this entire process has been fairness to farmers, hasn’t it? So I suppose the main question here is how does the payment methodology as it currently stands—granted that discussions need to continue, conversations will continue—ensure that fairness for farmers. That is the key thing I'm trying to get at here.

The very straightforward answer to that is we're in line with the SLM objectives, but going above and beyond that, we incorporate then an additional social value payment that is paid to every farmer, which will reflect those wider public deliverables, the social value in terms of the cultural importance of farmers, those other additional benefits they deliver. So, it'll be on top of. So, what we have to do now is to bring the final business case together, have the straightforward universal support element with the social value then on top, and then with the other elements layered on it as well.

And we've also got to do this in a way that is understandable to farmers, hence why the social value—. That's one of the reasons why we think, for simplicity and for clarity, social value will apply to all farmers equally, recognising that if they fit—. If they want to come into the scheme, and they fit within it, and they can do the universal actions, and they might want to opt for some of the optional and collaborative, then they're doing the work that we need, as a society, farmers and land managers to do. So, they qualify for that social value payment. What we've just got to do now is work out what the detail of that is, but it'll be above those costs incurred, income foregone, recognising the importance of farming. 

Okay, great. Diolch. 

Can I just clarify, Minister, when you say 'universal payment' for the land entered in, there'll be no demarcation? Because a farmer growing potatoes or wheat in Pembrokeshire is most probably going to have to give up ground to meet some of these key objectives that is far more productive than, obviously, a piece of common land in north Wales somewhere.

So, we've always and continue to try and design the scheme in a way that all farmers who want to will be able to enter this whilst delivering those SLM objectives. So, on that basis, if they can enter the scheme and comply with the universal actions, then they will qualify for that payment. What we're hoping is that a lot of farmers will want to do far more than that as well, whether they're a Pembrokeshire potato farmer or whether they're somebody on top of the Bannau Brycheiniog. 

My point is that someone is surrendering more productive ground to enter the scheme, and so is taking a bigger financial hit than someone who maybe is going to be part of a commoners association, or something like that, where it might graze half a sheep on an acre, or something like that. 

So, I'm going to challenge you back a little bit, with all respect, Chair, on this. What we're trying to do here is to get those wider SLM objectives, including climate resilience and nature and ecosystems, built into the way that we farm in all of those farms. I think putting one against the other is probably not the way we're thinking of this scheme. We recognise that there is prime production land, but you can have arable grazing land that also does quality stuff with soil, quality stuff with crops, with multiple species within that. So, we're not looking for a trade-off. What we're trying to do is design a scheme where all of those farms can actually do good stuff, as opposed to, 'You've got farms that just produce food and they don't do stuff for the environment.' I don't believe it. I don't believe it. What we're doing here, with the farming unions and others, is designing a scheme where every farm will be able to step up to the mark and deliver right across those SLM objectives.

Okay. Hefin. 

You said previously that you didn't see any unique impediment to tenant farmers, but you've since changed your approach to give them specific support. Can you just outline why that change happened?

Yes. It's because—. We've always made clear, Hefin, that as part of this process, I wasn't going to go in bull-headed as a Minister and just say I knew best. So, we've had the Tenant Farmers Association on the officials group and the ministerial round-table. We've listened very closely to their and other representations, because it's not only the TFA that want to make sure that we've got a good future for tenant farmers. So, we have listened.

We'd made some changes previously to the scheme, so that, for example, tenants weren't disadvantaged by the woodland creation example. We've exempted them from that, because tenants don't always have full control over the woodland aspects within the areas that they farm. But more recently, we've also made some practical changes to elements of the scheme. For example, tenant farmers will not be required to comply with any element of the scheme where it conflicts with the responsibility of their tenancy agreements or the statutes that underpin them. I think this is fair, again, because, otherwise, that is an impediment.

And the other thing is, just the clarity. Because many of the people around this round-table, by the way, some of them are tenant farmers, including some of the farming representatives, and not just the TFA, and some of them are landowners who lease their land out to tenants. So, I've made it very, very clear, and the ministerial round-table is in agreement with this, that we expect landlords as well to support their tenants in entering the scheme. It would be unreasonable for a landlord, we've made clear, to deny a tenant access to the scheme on the basis, for example, of things like a temporary habitat with an ongoing crop rotation, if it was required under universal action 8. So, we're trying to send clear signals, as well as the way we design the scheme. But it's based on listening; I'm a Minister who will listen, and if there are good arguments put forward, I'll adjust it.

I don't doubt that. Both the Chair and I, historically, have raised the issue of farmers with common land rights and some of the difficulties that they face. I've got vast swathes of common land across my constituency, and into Pontypridd and beyond. You've said that the new scheme proposes that a proportional part of the universal baseline payment could be made to SFS participants with those rights, with those livestock grazing rights. But will that then make them more reliant on the higher tier scheme options?

All right. Okay. Gian Marco.

So, as you say, one of the big changes we made between the consultation and the scheme outline was to include a universal payment, in effect, like you say, for those who've got common land grazing rights. That was one of the big asks, if I'm honest, from all the feedback. We're hoping that that will very much address that concern that was raised a year ago, that that would be a big change for a lot of farmers' common land rights, from the current BPS scheme.

We do think that there is still a real advantage for those farmers with common land rights to come together around a commons agreement, to take advantage of the collaborative element of the scheme. So, in the same way that we're doing the Habitat Wales commons, we did it last year, we're doing it this year, we'd encourage farmers who aren't part of grazing associations to do the same and take advantage of those options that will come in from the scheme.

So, it's a two-pronged approach. But I think the sense that we had through the discussions in the ministerial round-table was that the main concern that was raised a year ago was the lack of a universal payment for those farmers who had common land rights. So, we've found a way of including that, which I think addresses that main concern, but there is still an impetus, or an encouragement, from us to move on then to those more collaborative actions.

So, just with that in mind, obviously, you said the dialogue was a year ago, what kind of dialogue have common land representatives had with you since then, and what is their response to what you've just said now?

Oh, sorry, Mark, do you want to—? You're closer to it than I am.

Just before I bring Mark in, it's probably worth saying that the discussions on this haven't ended. You're right in flagging at the start that how this ties in with the optional collaborative layers is exactly the discussion we're having now in terms of common land. Having bolted down the universal one, which has been broadly welcomed, it's now how it engages with us.

So, over to Mark for the common land representatives' view.

It's quite nice and timely, in that I spoke to the chair of the common land forum last week, to talk about next steps and going into their meeting—

That was handy, wasn't it?

They've got a meeting in February. But we've been meeting and talking to them regularly throughout this process. So, part of that conversation about how we bring commons into the universal payment area has required us to make some fundamental additions. So, within that, we're looking at things like a commons diary, so that we understand what stock is going on to common land, and increased protection for that common land from in-bye land practice. So, there's a commons code that we're working through there that absolutely is being developed through collaboration with the industry. They've got some great experience and we've got some previous schemes as well. So, all of that work is continuing.

And where we want to go is to actually encourage those collaborative groups to then go on and do other things—so, things like tackling anti-social behaviour and more public access onto common land. There are some real benefits there that we can provide to society through that collaboration. So, not just providing a location for a sustainable farm practice—grazing—but also doing more for the environment and for the people of Wales.

And you'd be aware, then, of the issues I raised with the Deputy First Minister's predecessor, as did the Chair, about the intimidation of common land farmers that has occurred historically. Are you aware of those issues?

So, I'm certainly aware that common land and common land grazing and—[Inaudible.]—there are a number of issues, a number of pressures they have. It's a fairly unique way, and a fairly unique circumstance they have to manage, with lots of different pressures.

Well, the kind of thing that we've seen happening is that other farmers are claiming the land as their own, and trying to push the common land farmers off the land. We've seen that. So, you think your proposals will help that.

It sounds like that's probably something slightly outside of the scope of the SFS—

It is outside the scope of the SFS, but it was raised by Mark, so—.

Well, the issue you have, Deputy First Minister, is the 'lord of the manor' title and then those lord of the manor titles, historically, have stayed with families for many years, but in recent years have been acquired by some sharp operators, shall we say, which Hefin and myself have raised concerns about with your predecessor. And now, all of a sudden, those commons are becoming quite valuable assets to attract payment out of a scheme and, therefore, that's where the sharp practices come in then.

And we've witnessed that.

Well, two things: one is we'd be interested in hearing any thoughts from you and the committee about that. Even if it doesn't fall directly within the SFS, we'd be keen, clearly, to turn our—

I think, where there are payments, there's an interest, isn't there?

Yes, exactly. So, we'd be keen to turn our attention to that, to see whether there is a role for Welsh Government within that space. Or if it does go back to some of these issues over the increasing attraction of land, away from the dim and distant past, with some of the common land thing, then there may well need to be discussions that are not only at a Wales level, but at a UK level, because some of this will probably go back to—. I'm very familiar with the common land within my area, and the complexity of the legislation around this. But you're also touching on issues about property inflation as well, and the attraction of people to come into this scheme. So, please send us your thoughts on that, and we'll see if there is something that we can unlock, either in the course of this or separately, as an adjunct to it.

Happy? Okay. Sam.

Thank you very much, Chair. Good morning, Deputy First Minister and colleagues. Young entrants and new entrants—and I don't like just calling them 'young entrants', because anybody can become an entrant into agriculture; I hope everybody can feel that way. But in our inquiry last summer, we heard the scheme wasn't doing enough to support new and young entrants into the sector. So, what's changed in the proposals since 2023 to support that?

So, I mean, we have made changes, and I think part of it is reflective of the fact that the young farmers' clubs are specifically represented here, on the officials group and the round-table, but it's also others who've been speaking up very much for young farmers and new entrants. So, the first thing is just to say we're really committed to making sure that this scheme is accessible to and is attractive to young farmers and new entrants as well. We've previously described how payments will not be based on historic entitlements, and I think that's one key thing that we've unlocked, because if it was based on that, it can be an impediment, actually taking those entitlements or quotas or historical reference periods. So, new and young entrants will join the scheme on the same terms as other farmers. Now, I think that's really important.

We do recognise as well, Sam, that most new and young entrants will probably enter the SFS—not all, but most of them—as tenants, the discussion that we've just had there. So, we've already made significant changes to the scheme to make it more accessible to tenant farmers. The other aspect is, within the scheme design—and we're also doing things outwith the scheme at this very moment, but within the scheme itself—we will design within that support for a full range of mentoring and skills and succession planning and shared farming enterprises for new and young entrants. Some of that goes alongside what we're doing with the SFS, and we're doing it at the moment, and I've seen it first-hand myself, the success of some of these. But in doing all of these, we also need to work with the support of the farming unions and others to encourage people towards that support and advice as well. But we think we're designing this scheme—we're confident we're designing this scheme—with the help of YFC and with others, in a way that it doesn't stop those new entrants and young farmers coming in.

Okay. And adjacent to that, but as you mentioned the YFC, will they continue to get supported by this Welsh Government?

Yes, Welsh Government recognises the importance of the YFC, not only in terms of farming, by the way, but in terms of the wider rural sphere, Welsh language and so on. So, we're very keen to continue our engagement with and our support for the YFC going forward.

Fab, thank you. Moving on to the 10 per cent habitat rule, now, we note that, as a committee, more options have been added to help farmers meet the 10 per cent habitat rule. I'm just wondering if this could result in more farmers opting for the temporary habitat creation and, if so, what impact that might have.

I think this does touch on how we go now on the optional and collaborative elements as well. But, Mark, I wonder if you can update—. Sorry, the reason I turn to Mark is because he's actually in the engine room of some of these discussions on a day-to-day basis. So, Mark.

I think the first point to make is if the farm has already got the 10 per cent, and we've talked already about the definition of that, then they don't need to go into the universal action for UA8, the creation of temporary habitat. What we've done there is create a range of options and a range of opportunity, recognising that one action might not be appropriate for one farmer, but we're looking now at extending that list, as you’ve said. We've brought in more recently a cereals suggestion, which came from stakeholders, so looking at retention of weeds, cereal weeds, which again supports our natural biodiversity. And more recently, we're thinking of looking, or we were looking at non-cultivation actions. So, this is where you're doing fewer inputs or less spraying and different things, so the management practice is different. So, that non-cultivation means that you don't then have to—. You can apply it to other parts of the farm, it applies to other landscapes more, and that balance, hopefully, then, means that it's appropriate for all farms in Wales.

So, you don't see some negative impact, environmentally, from doing the temporary habitats?

So, the aim here is to create choice. That choice creates opportunity to ensure it's the right action in the right place. And temporary habitat in itself can create benefit, in terms of nature. It's designed for that way, for nature, but also for the farmer as well, in terms of regenerating that soil and things.

Okay. And just to touch on and develop a point that my colleague Jenny Rathbone raised earlier—dynamic hedges: is there a commitment to include hedgerows within the 10 per cent habitat, or is it sort of a working thesis as each hedgerow is looked at individually as to what they offer in terms of habitat? Given that hedgerows are a huge contributor to habitat on farms, are they included in the 10 per cent?

This also touches on the trees and the hedgerows element.

It does, yes. So, in this scheme outline that we published in November, hedgerows aren't included. Because of that removal of the 'good condition', it's very difficult to determine what is a hedgerow that should be included within that 10 per cent. It is a conversation that we've had from stakeholders after publication to say, 'We'd like to discuss this further. You know, what about these other things?' And that's a conversation that's planned within the process that we've got.

So, how, then, could those hedgerows be included in the 10 per cent if they're very wide, not bushwhacked to within an inch of their life? How can they then be included in that 10 per cent? Is there a mechanism for them to be included?

It's something we need to work through from an operational design—it probably would require further steps for the farmer. So, because we've removed it from UA11—11 I think it is. I need to remember these things. It's not directly applicable. So, it's not one thing that would translate across. So, it would require additional steps if that was included.

Fab. Deputy First Minister, I saw you look at each other and laugh a little when I asked that question, but not in a—

I'm smiling because it's one of the live issues that we're dealing with; we're working it through the officials group at the moment. 'We don't have the full resolution of it yet' is the answer, but we're working through it.

But it's there on the table being discussed at the moment.

It is on the table, yes.

That's fab. And then there's been an open letter sent to the Department for Environment, Food and Rural Affairs, Deputy First Minister, on the sustainable farming initiative, outlining concerns that a large proportion of funding is being spent on herbal leys, which risks delivering 'poor environmental outcomes'. I'm just wondering if you're aware of this and how it's been taken into consideration for the design of the SFS.

Yes, indeed, we are aware of it. I touched earlier on on the benefits of herbal leys, but also the need to actually get this right. So, as we set out in the scheme outline, the appropriate use of herbal leys is one of the reasons for changing the multispecies crop cover universal action. So, we felt that using it as a winter cover crop would encourage the short-term use of the crop not being retained for long enough to provide the benefits for nature as intended. So, the feeling through the officials group, and the work that we’ve done, is that this is better achieved through universal action 8, the temporary habitat and optional actions, where the benefits for farm, nature and the environment can then be maximised.

It’s worth saying as well, by the way, that of course we do have a very different approach here in Wales, a very unique framework in Wales, with the Well-being of Future Generations (Wales) Act 2015, and, indeed, more recently with the sustainable land management objectives in the Agriculture (Wales) Act 2023. So, this means that I have to, as a Minister, take that sustainable, long-term perspective on decisions in Wales. So, it’s going to be interesting to see how this develops internally, but we’re aware of the letter. It’s those parameters that we’re using to work this through internally now.

Okay, thank you. And more broadly, many farmers are farm assured through different schemes. How transferrable are those farm assurance schemes towards elements of the SFS to avoid duplication?

I think there is some synchronicity, but I say this in a cautious way—some synchronicity. We have to make sure that those farm assurance elements have real integrity, and that they do transfer across to what we’re trying to do. We’ve really listened to farmers who’ve said, ‘Well, we’re doing similar stuff that you’re trying to achieve here within our farm assurance, but there are lots of them out there.’ There are lots of farm assurance schemes out there. Some have different nuances and different standards and so on, but we think we can reflect some of that within the scheme design. Mark or Gian Marco?

I think it’s a good example of where we can find mutual benefit—

Yes. 

—between the scheme and the practice. That’s the intention of the scheme design. Those universal actions should be commonplace on most farms. So, in this regard, there’s an opportunity here for maybe farm assurance schemes to adopt a similar process to ours, so that we only do it once. And similarly, we’re working with them to see whether there’s any evidence they can provide that provides assurance for us on the actions that we’ve got. So, that's absolutely an ongoing conversation right now. It’s part of the animal health improvement cycle pilot as well and the work that we’re doing around that.

Fab. And then—

Sorry, I was just going to add—I’m sure you’ve seen it—that there’s been a recent review of farm assurance schemes that was published, and, actually, one of the areas they picked out was this interplay between farm assurance schemes and Government schemes like SFS.

Okay, thank you. And then my very final question: obviously, farmers are under a lot of regulatory burdens—agricultural pollution regulations, bovine TB regulations. How do all these, with the SFS, interplay to allow farmers to feel that there’s hope in the industry, that there’s a future in the industry? Because we still see that agriculture has some of the highest suicide rates, it has some of the highest mental health impact rates. How are you mitigating that through the SFS and how it interplays with other regulations, such as bovine TB and nitrate vulnerable zones?

Sam, it’s the right question to ask. We need to—

That's why I asked it. 

We need to design both the SFS and also our wider approach to approaches that have the right regulations in place, but smart regulation that’s easy understandable and that can be easily monitored and, where necessary, enforced as well, but also that isn’t overly complex. Now, some of the ways that we can do this—. You just asked the question about farm assurance and why do we have to add more and more levels of complexity to different approaches when we can actually draw on what’s currently out there. I’m open to this approach in the way that we go forward beyond the SFS with other aspects. You mentioned, there, agri-pollution. There will always be a need for baseline regulation for agricultural pollution, but actually it's about what more we can be doing by designing approaches that work with farmers and landowners to get the benefits that we want.

We’ve got, as you know, on the ministerial round-table, representatives as well from DFS and other farm mental health and well-being organisations. It’s important that they’re on it.

Sorry, DFS?

Sorry—

You mean the DPJ Foundation?

DPJ—DPJ and others.

Yes, that's what I thought you meant. 

My apologies. In this role, I have too many acronyms in my head. 

Too many acronyms, yes, I agree. 

And it’s important that they’re in there, and they’ve been valuable contributors to the development of the scheme as it is, because they will speak out in the round-table, and talk about those issues such as complexity, bureaucracy, burdens on farmers.  

Language that Government uses in correspondence. That’s something that’s been fed back to me a lot as well.

Yes, indeed. So, we need to keep working on this. But there is a role also for elements of bureaucracy, because it helps with accountability and the good use of taxpayers' money and so on, but also elements of regulation. We just need to be clever about the way that we do it. And some of the changes that we've made, including, by the way, in things like the TB sphere, over the last year have shown that we're willing to listen and change approaches within that to make it simpler and less burdensome for farmers. 

Thank you, Chair.

Okay. Hannah.

Thank you, Chair. Cabinet Secretary, at the start of this session, you referenced the work on the trees piece, as you said, so I'm going to turn to everybody's hot topic, tree planting. Obviously, the intent behind the now-removed 10 per cent tree rule was designed to enable Wales to achieve its planting target, as determined by the UK CCC and accepted by Welsh Government. So, have you had any feedback from UK CCC since the new approach to tree planting in the SFS, and have they provided any assessment of that and what else would need to be done?

Thank you, and yes, we've—. The first thing to say is that we haven't moved away from our ambitions on trees and woodland creation, both within the SFS but also more generally within Welsh Government. And we want farmers and landowners to be able to take advantage of the opportunities, where it is right, to actually plant. And that could be for livestock and climate resilience, shelter belts for livestock. If I had Richard here, my chief veterinary officer, he'd be saying that the way that you get 10 per cent more productivity, Chair, out of your livestock and your farm is not to invest in more and more hard structured concrete and steel barns, but actually to have the right trees in the right place so that, for those animals, their welfare is looked after and they turn out mightier beasts that you can sell better in the market as well, then. 

I'd have an interesting discussion with him on that.

Yes, okay. But the evidence is very compelling on this. So, I just wanted to make it clear that we can see the advantage in this for farm resilience and for farmers as well as for that wider tree planting. So, in going forward, we have Naomi here with us, who brings a significant amount of expertise in this sphere from her background. We've set up now a joint trees and hedges stakeholder delivery group, which is going to focus on the delivery of the tree planting and the hedgerow creation. It's drawing its membership from Government, the farming industry, the forestry sector and environmental non-governmental organisations as well. The first meeting, we mentioned, is actually tomorrow, and we'll publish the scope of the group and the membership very, very soon.

My intention is that this group has got to be delivery focused on the tree planting. It will support me now in setting out those scheme-level targets. So, even though we have chosen to go on a different approach, which I say, if we had the support of the stakeholders, could well deliver more than a nominal 10 per cent per farm, because some farmers will want to plant trees in the right place for shelter belt, some of them will want to get into agroforestry—not on prime production land, but because they've identified a patch of land where they think they can do it. We published the timber industrial strategy only in the last few weeks; there are real opportunities here. So, that group being established will help to bring forward scheme-level targets for tree planting and hedgerow creation by 2030, monitor the delivery towards these, and will bring forward recommendations for action if delivery is not on track as well. 

Also, I've tasked them with identifying the actions to change the whole narrative on planting trees and hedges on farms, because as I've consistently said, we've got into a falsely polarised argument of saying that trees are bad for farms, somehow, and actually we need to get into, with farmers, working together with them, with stakeholders, saying that there is a right place for trees on farms for the multiple benefits that we're doing. So, hopefully the governance group will also bring that forward. 

On an industry level, the tree and hedgerow planting rates and the expenditure detail is going to be published on an annual basis, so that we've got real transparency and visibility on the progress being made against the scheme-level target. And the group will also be provided with aggregated data to inform their work. So, that will be prepared for the annual report required by the Agriculture (Wales) Act. But let me just make it crystal clear that, by the end of 2030, farmers will need to be able to demonstrate, Chair, and Hannah, that they've made progress in implementing this plan. The universal payment is linked to this. So, we need to see that progress. This is not a 'walking back from'; this is a 'we all now need to step up'. We're going to do it in a different way, but we need to make good on this as well.

Could I just invite Jenny in with a supplementary?

Can I just come in and ask where do orchards sit in all of this? Under the current arrangements, they have a very different status in terms of being able to revert the land back to grazing because, obviously, orchards tend to have a shorter lifespan than some other trees, but it's key to how we feed ourselves. So, I just wondered if you could tell us a little bit more about how you're approaching orchards.

Yes, it's early days, but, Naomi, thoughts in advance of the first meeting on this?

So, one of the things that we're trying to do, having heard feedback from people on the ground, is to make the grant schemes for woodland creation much more flexible and include a much wider variety of options for different kinds of planting, including agroforestry and orchard-type trees, nut mixes—all of those kinds of things—so that there's much more choice in the kinds of planting that farmers can consider doing, including trees that are going to provide food benefits and wider benefits on their farm.

Okay. Hannah.

Thanks. My next question was going to be for an update on the scheme-wide target, but I think you've covered quite a bit of that in what you've already said, but can I just pick up, in terms of the scheme-level target of the SFS, is that within the 10 per cent of the national target?

So, will the scheme-level target replicate the previous 10 per cent?

So, how will it all fit together? How will that scheme-level target actually fit in terms of making sure that we meet the objectives that were the intention?

Right, yes. Okay, let me unpack that a bit. So, we've come from the history of where the original consultation went out on a 10-per-cent-per-farm-regardless target. And we had the feedback from some farmers saying, 'We can do more than that. We're already doing more than that, we want to do more', and others saying, 'We don't think we can do it', because of various topographical or environmental factors. But, actually, what we're drawing on here is a number of factors. So, first of all, we acknowledge very firmly the contribution that the farming sector can make to the UK's Climate Change Committee targets on trees and hedgerows. It's important to have that in the background. 

We, as a Government, are committed to working towards the target of 43,000 hectares of tree planting by 2030 and the subsequent target of 180,000 by 2050. I met only very recently, within the last few weeks, with the members of the UK Climate Change Committee, where I was able to highlight the issue of tree planting rates in Wales, and, in fact, the next report will be coming forward fairly shortly as well. But what we have done here within the round-table, in that context, and with the establishment now of the governance group on trees and hedgerows, is to try and work through what will the scheme-level target be—and this is for the work that has to be done—that will reflect that overall context, the framework we're working on, the ambition that goes above and beyond the SFS as well, recognising that over 90 per cent of the available land in Wales is agricultural farm land, but on the basis, Hannah and Chair, that we think there's real potential here for farmers within this for all the reasons I've laid out: livestock shelter belts, climate resilience, and timber production as well, frankly—hard wood and soft wood.

So, what we need to do is work with them now, in the light of that framework, to come up with the right scheme target. But let me say very clearly that we cannot do this on our own, and the approach that we're taking will require all stakeholders—all stakeholders—to step up to the mark and say, 'We support this. We're going to work with and we're going to encourage farmers and land managers to get involved with this, to look at the options, if it's right for them.' Because we know that the demand is there. We are importing at this moment so much from overseas. Our reliance on imported wood, as we try to decarbonise housing stock and so on, is just not good enough. So, there are economic opportunities for farmers here to step into this. But I get all the arguments of not on prime, productive land, and so on. We can do this Hannah—I firmly believe we can, and there'll be a will to do it.

You said there are benefits for farmers who sign up. So, what assessment have you made of how many farmers are likely to sign up to the optional action to plant more trees, and what consideration has the Welsh Government given to how you would actually incentivise that change? Would it be linked to a high weighting in terms of payments or any other options?

You're tempting us right into the area that we're now working through: what the payments will be, what is the right level of incentive to encourage people into it, particularly at the optional level. So, in the universal level, of course, every farmer who enters will need to do that mapping, the opportunity plan within their farm, and then work towards progress on it. But what quantum of funding do you then put into the optional level to actually drive change as well? Bear in mind, we've still got a woodland grant in place at this very moment, and farmers and others are uptaking it. But, Naomi, how do we work this through? This is going to be—. You're tasked with this now.

Yes. So, I think, again, the payment rate will be part of that issue. We've talked about that before and we can't say any more on that at the moment, but I think the other important thing is the point I already mentioned about looking at the existing offers that we have, which is something we're actively doing at the moment, and finding ways in which we can make those more attractive, flexible, and suitable for use on the farm. And, as I said, we've been looking in a lot of detail at how we could have a wider variety of agroforestry-type options and provide things that will just meet the needs that farmers have said they have from trees on their farms.

And then, again, I think the importance of the group, which will be meeting for the first time tomorrow, is in bringing together all the interested parties to help articulate those benefits of trees on farms, and to help us identify the right support mechanisms for farmers to enable them to access those benefits and decide what's the right type of planting on their land.

But it is worth saying, Hannah, that I'm very seized by the opportunities here and that if we get the incentives right, then that will clearly encourage farmers to go into this area for the wide variety that we have.

A supplementary from Sam.

Thank you very much. It's interesting, and there are two points that I want to pick up here. Firstly, you mentioned the 80 per cent of Welsh agricultural land, but, when it comes to tree planting, the percentage is far less, isn't it, because there's so much land that can't actually be used for tree planting. So, have you got a percentage of what available land out of that 80 per cent could be utilised? And then secondly, on the point about the economic opportunities, that requires a different type of tree planting to the shelter-belt tree to protect in certain areas. So, there's a difference there again as to what farmers can deliver that benefits the farm and the impact around the farm, and then those that make a conscientious decision to potentially move away from agriculture into forestry as an economic opportunity. Is that acknowledged within the direction of travel you're going with tree policy in the SFS?

Yes. It really is horses for courses. Some farms will choose to say, 'We don't want anything to do with agroforestry. We're a food producing farm. We've done it for years. We're keen to develop with the SFS the way we improve and innovate and so on, but it's farming for food production we do.' But we know, Sam, that there are others out there who are waiting for the right incentives, to say, 'We do want to do a bit more spot planting around areas, because we get the argument that says this is good for our livestock and it avoids doing concrete and steel; when they're out on pastureland, we can provide that.'

But we also know that there are others who—if we get the design and the incentives right—want to take advantage of the commercial opportunities—now, not on prime land. We were saying earlier on in terms of the HWS and the engagement with farmers subsequently on mapping where current woodland cover is, that that is done. We've got difficult decisions here around land use, in that it's not only to do with productive farming land, but it's also to do with, for example, really good biodiverse land. So, for example, where some people look at the edge of their pastureland as it goes up into the hills, and say, 'Well, that's covered in bracken; that's useless,' well, actually, some of the ffriddoedd going up into the hills could well be extremely productive in terms of biodiversity. But there then might be other places in those interregnum places where, actually, farmers would say, 'I can plant.' Now, there will be, I suspect, other farmers who will say, 'As part of my diversification, as part of the stability of my business model going forward, I do want to, actually, plant as well, and then send that timber'—and not just NRW doing it, or importing from Scandinavia or whatever—'I want to send that directly to my local timber mill.' But it's going to be their choice to actually do this.

And that's going to take a very long time to—

It will, and some of this is the behavioural and cultural thing as well. We've not been, traditionally, to a large extent in Wales, though there are some good examples, in that space where you have people who regard themselves as farmers and foresters. So, it's that working with the stakeholders and the representative groups to say, 'Can we change the narrative around this?', which is part of the work that the governance group is looking at as well. How do we change the narrative that it's not polar opposites, that you're either a farmer, or you're in forestry? Well, we know that there are ones out there at the moment who do both farming and forestry, and I think that's the space we need to get into, and also give them the tools so that this isn't some strange new land. Through the mentoring, through the sharing of others who are doing it, we can show, 'Look, it's already being done down the road. If you want to, if it's right for you, you need to get into it.' So, there is a behavioural and cultural thing we need to deal with as well as the right incentives, and it won't happen overnight.

And then the percentage of land within the 80 per cent, have you acknowledged what that could potentially be?

Naomi.

The mapping analysis that we've carried out indicates that there is sufficient non-productive land available that could be suitable for planting trees—

And what percentage of that?

I can't remember the—

Okay, that's fine.

We can come back on that, though.

Yes, thank you.

But what I would say is we know that we need to get better across the Welsh Government and agencies at taking those decisions effectively on the ground about which particular pieces of land are suitable for trees and which are not, taking into account the other potential uses of that land and the biodiversity benefits that it might have. That's one of the barriers that we've heard a wide range of organisations tell us, and that's one of the other areas that I think it's really important that this new stakeholder group gets to grips with. We really want them to help us to continue removing those unnecessary barriers to getting trees in the ground so that, actually, the whole process is easier and quicker, and so that where farmers do want to go and do it, it's an easier and quicker thing for them to do.

But just to say as well, there's a real change in the approach that we're taking here. So, as opposed to doing 10 per cent of every farm you will do, we are actually saying, 'We want to draw on your intelligence on the ground as well.' Because I will speak to farmers who say, 'Well, I could plant it up there, but, frankly, that's exactly where the best nature ground is and we don't really want trees there, or we could put some.' No, I think the approach—. This is why, quietly, I'm confident that we can actually deliver more than 10 per cent per farm, because if we do get the financial incentives right, but also we're willing to work with farmers and say, 'What do you want to do on your farm? What works for you? Is it a bit more shelter belt? Is it something we do within the hedgerows as well with trees, or is it that you actually want to get into, on the right plot of land, some agroforestry? Right', then we're drawing on them, instead of doing, 'Government says this is where we can plant.'

Okay. Sorry, Hannah.

Hannah.

Thanks, Chair. Just a couple more questions: how will you define and measure progress when it comes to the scheme and tree planting? And in that vein, can you update the committee on work on establishing a governance mechanism in order to monitor that progress?

The reason I'm struggling to answer this is because that's exactly why we've set up the group, so we're very conscious of the pushback from a lot of stakeholders who said, 'We need some bite within this now so that we can monitor progress, evaluate progress, so that, in year 1, when the opportunity plans are in place, by year 2 and year 3 we can actually transparently say we are having planting happening, but also to look at what happens if it isn't happening as well.' So, that's the piece of work that Naomi is now steering forward, together with the membership of the trees and woodland governance group. I can't give you the answer yet, but if we can share more as this develops, we'd be happy to share more with you.

I'm sure the committee would welcome updates on that work as well, as and when. I'll squeeze in the last two questions as one, because I'm conscious of time. The committee are aware of an exercise carried out by the carbon panel to score different carbon sequestration options. That scoring was not published with the carbon panel’s report. Is it possible for that to be made public for transparency around the evidence used to develop the tree-planting proposals?

We've published—

We've published part, haven't we?

Yes. We've published the summary. The full report is just with the academics for clearance.

It's like University Challenge. [Laughter.]

Yes. Because we've got so many moving parts at the moment. We've published the summary—I was just checking with Mark—so, at this moment, the full report is being worked through now, to proof it through with academics and officials working through it. We'd probably need sign-off as well, I guess, from the ministerial group, if we were to.

Yes. I think, with translation and everything else, publication is going to take a while to do, but the intention is to publish the full report, the detail. So, that's all of the evidence that the committee got to see, or the panel got to see, and how they came to their conclusions. So, I think it's a volume, rather than a small report, in that respect. So, it's going to take a little bit of time just to dot the 'i's and cross the 't's.

Perhaps when you've got a clearer idea of the time frame for that, you could write to the committee and let us know.

Be happy to, yes. 

And just a final, final point I've got to make is back to the carbon panel again. So, the remit was based on carbon sequestration. Why was carbon emissions reduction not included in that remit?

Yes. The remit was very specifically focused. But Gian Marco—.

It was very much in response to the concerns that were raised during the consultation around the 10 per cent trees, because we talked quite a lot in that consultation about the 10 per cent tree requirement being integral to our carbon sequestration needs—back to the triple C. So, it was very much focused on saying, 'Okay. Given those concerns, can you look at the evidence around all the carbon sequestration options and come back to the round-table specifically on that?' There is separate work going on internally as part of the delivery of Net Zero Wales looking at decarbonisation pathways, including for agriculture, and that looks at emissions as well as sequestration. But that is separate to the specific request that we had for the carbon panel.

Two very final quick points, if I may, Deputy First Minister. It states the blindingly obvious, but you need multi-year budgets to make the single farm payment scheme work. The Government's current thinking is that that would be a negotiation that you would have with any finance Minister to secure that, because, obviously, many words have been used about transition, time frames et cetera. But it's not a given that there would be multi-year budgets, is it?

No, but it would certainly be my preference that we have multi-annual budgets, because that's the way you deliver the certainty, then.

And the final point is that Gian Marco said that people would be entering the scheme, if they so choose, on 15 May. A week before that is a certain date that many people around this table will be focused on, which will be the Senedd elections. This is very much, obviously, the Government of today's single farm payment scheme, or sustainable farm payment scheme. How are you reaching out to try and find a political consensus so that, obviously—I mean, it will be up to parties to put whatever they want in their manifestos, but a political consensus so that—farmers don't find themselves trying to wrestle with the new scheme and then the political uncertainty that it might never actually take flight?

Yes. I think it'd be really helpful if the consensus that we've built around the design of the outline scheme—and hopefully we'll get to this May, June, July, when it looks as though we've got a final scheme and there's consensus around that—is also reflected broadly, then, amongst the political parties in Wales. I say this quite genuinely, because this is, as we've discussed today on the committee and many times before, an issue to do with farming and reflecting the food production and the social value and the wider importance of farming, but it's also to do with the future of the landscapes that we value as well, and the nature and the biodiversity. So, if there was a position—. I say this quite genuinely, because you know, Andrew, I see the importance of this scheme and the necessity of delivering for this next five years but also for future generations, in which case it would be great if, on an issue as important as this, we had broad political consensus. Even if there were areas where there would be some, ‘I would do it in a slightly different way’, or, ‘I would whatever’, that, broadly, people say, ‘We need to give this a good run now, we need to get this in, we need to encourage our farmers and landowners to get involved with it, we need to see this deliver the results there.’ That would be a much better position, because I think, in the grand political debates around these sorts of issues, that also would give more certainty to farmers that this isn’t a one-off and that it’ll flip in five years’ time into something else, and flip again in five years’ time.

We are in a post-EU situation, we’re trying to design something that’ll really work for the whole of Wales, and on that basis—. Yes, look, I’m keen and I have been, through the whole process of this, engaging with political friends on all different parts of the political spectrum in order to try and engage on this and get this landed right, beyond the officials’ work and so on—. I hope that can continue and it doesn’t get sucked into, election time, saying, ‘Scrap this; throw it out.’

Thank you, Deputy First Minister. Thank you, officials. There’ll be a transcript of the Record, obviously, sent over to your good selves. Thank you for your evidence today. I’m sure the committee might have some follow-up questions, and, hopefully, you’ll deal with them via written correspondence.

Thank you very much.

Thank you.

Could I invite committee members to take note of the papers that are in the bundle, of which I think there's about eight or nine in total? Any comments or observations anyone wants to make on those papers?

Could I move under Standing Orders that we move to private session, then, please? Happy.