Defra has announced a significant update to the Sustainable Farming Incentive (SFI). There are important and immediate consequences – especially for farmers yet to apply for the scheme. Here is a summary of the changes and their impacts.
The SFI revised offer has now closed to new applicants, creating a two-tier system within the industry. This has been done without ant prior consultation.
The government’s spin on this sudden change of tack is that it has committed £5 billion over two years to sustainable farming and nature recovery. The SFI, which has over 37,000 multi-year live agreements. It aims to deliver sustainable food production and nature recovery while providing financial support to farmers. The government says the SFI has achieved its goals and the budget has been spent.
Key points about the SFI changes
- No new applications: Defra will stop accepting new applications for the SFI from 12 March 2025
- Existing agreements: all existing SFI agreements will continue to be honoured, and outstanding eligible applications will be processed (although many payments are already being delayed without explanation).
- Future plans: a reformed SFI scheme will be introduced, with details to follow the spending review in summer 2025. The new scheme will focus on directing funds where they can have the greatest impact on nature. It will also focus on where farmers have the least ability to access returns from agricultural markets or other investments. This is likely to be a scheme with capped payments more akin to a higher-tier scheme
Impact on farmers
- Farmers with existing SFI agreements will continue to receive payments as usual.
- Those with pending applications will be processed if eligible.
- Farmers who started but did not submit their applications before the closure will not be able to submit them, with some exceptions.
More details about the SFI changes can be found on the Defra website.