Wales will move away from Basic Payments and support farmers through a new farming scheme post-Brexit, it has been confirmed.
The current subsidy given to farmers will be scrapped after 2021, Minister for Rural Affairs Lesley Griffiths said.
She said sustainable land management will be 'at the heart' of future farm support in Wales once the UK leaves the EU.
Plans include bringing together the originally proposed economic resilience and public goods schemes into a new scheme.
Sustainable food production is a major part in the new plan. A Welsh government consultation has shown a wide range of public goods can be produced alongside food production.
But farm groups in Wales have warned that any new scheme post-Brexit must give farmers a financial incentive to safeguard food production.
The policy changes announced will be explored in detail in a forthcoming consultation, which will be published in advance of the Royal Welsh Show.
Ms Griffiths said the 'case for reform remains and a new approach is needed': “This government has therefore decided Basic Payments Scheme will come to an end in Wales.
“Instead, we want to put sustainability at the heart of our future support, balancing the needs of current generation with our obligations to the next.
“Reflecting on the consultation responses, I am proposing a new single sustainable farming scheme, allowing us to explore economic, environmental and social opportunities at the same time,” she said.
The scheme proposes an annual payment to farmers in return for the environmental outcomes delivered on their farm - targeted at reversing biodiversity decline, meeting carbon budgets and hitting clean air targets.
Ms Griffiths said the responses to the consultation highlighted the production of food and the production of public goods can go hand in hand.
She added: “In many cases, the same action, done in the right way, can contribute to both outcomes. We want to pay for these environmental outcomes.
“In this way, we can support sustainable food production.”