Is the Government's New Green Payment Scheme a Lifeline for Farmers?

The UK government has confirmed that its flagship green funding scheme, the Sustainable Farming Incentive (SFI), will reopen to support farmers in England for environmental work after its abrupt closure in March 2025. Environment Secretary Emma Reynolds announced at the National Farmers' Union (NFU) conference that the reformed SFI will prioritise both environmental benefits and food production, although it will be smaller in scope than its predecessor.

Last updated: 15 October 2023 (BST)

What’s happening now

The Sustainable Farming Incentive is set to relaunch, providing essential financial support to farmers in England who engage in environmentally sustainable practices. Following its unexpected suspension, the government has restructured the scheme to ensure it aligns with current agricultural needs while still promoting ecological health. Farmers will now be able to apply for funding that not only incentivises environmental stewardship but also supports food production, addressing concerns raised by the NFU regarding the previous funding's abrupt cessation.

Key takeaways

The SFI will reopen with a reduced number of paid-for environmental actions, from 102 to 71.
Individual farm agreements are capped at £100,000, aiming to make the scheme more accessible.
Payments for moorland grazing will increase, aiding specific farming communities.
Initial applications will open for smaller farms and those without existing agreements in June, with a broader application window starting in September.
The government plans to allocate £120 million for research and innovation in agricultural technology.

Timeline: how we got here

The SFI's journey has been tumultuous, with key dates marking its evolution:

March 2025: The SFI was abruptly closed, leaving farmers in uncertainty.
October 2023: Environment Secretary Emma Reynolds announced the scheme's relaunch at the NFU conference.
June 2024: Applications will open for smaller farms and those without prior agreements.
September 2024: The scheme will open for all eligible farmers to apply.

What’s new vs what’s known

New today/this week

The government has confirmed several changes to the SFI, including a reduction in the number of environmental actions eligible for funding and a cap on individual payments. The scheme is designed to be more inclusive, particularly for tenant farmers, and aims to balance environmental sustainability with food production needs.

What was already established

The SFI was initially intended to replace EU agricultural subsidies after Brexit, designed to financially support farmers in managing their land sustainably. However, its sudden closure raised concerns about the future of environmental farming in the UK.

Impact for the UK

Consumers and households

The reopening of the SFI is expected to have a positive impact on consumers as it encourages sustainable farming practices that lead to the preservation of natural resources. This can potentially lower food prices and enhance the quality of produce available in the market. Furthermore, with the integration of innovative farming techniques supported by the upcoming funding, consumers may benefit from a more robust and diversified food supply.

Businesses and jobs

For businesses, particularly in agriculture, the SFI represents an opportunity to secure funding for sustainable practices. This could lead to job creation within the sector as farms adapt to new environmental requirements and utilise cutting-edge technologies funded by the government. The increased payment for moorland grazing also provides a financial boost to specific farming communities, enhancing their economic viability.

Policy and regulation

The reformed SFI indicates a shift in government policy towards more sustainable agricultural practices, reflecting an understanding of the need for long-term environmental stewardship alongside food production. It also shows responsiveness to the concerns of farming organisations like the NFU, indicating that future policies may continue to evolve based on stakeholder feedback.

Numbers that matter

71: The new number of eligible environmental actions under the SFI, down from 102.
£100,000: The cap on individual farm agreements to ensure fair distribution of funds.
£120 million: Total funding allocated for research and innovation in farming technology.
4%: The proportion of farms that received one quarter of the previous SFI budget, highlighting previous funding inequities.
June 2024: The date when applications will first open for smaller farms under the new SFI.

Definitions and jargon buster

Sustainable Farming Incentive (SFI): A government scheme designed to pay farmers for environmentally beneficial practices.
Tenant farmers: Farmers who rent land from landowners rather than owning it outright.
Defra: The Department for Environment, Food and Rural Affairs, responsible for environmental protection, food production, and rural communities.

How to think about the next steps

Near term (0–4 weeks)

Farmers should prepare for the upcoming application process by reviewing the eligible actions and assessing their land management practices. Engaging with local NFU representatives can provide clarity on individual circumstances and available resources.

Medium term (1–6 months)

As the scheme opens for applications, farmers should actively submit their requests for funding, while also exploring additional resources available for research and technology investment. Keeping abreast of government communications will be crucial as further details on the scheme evolve.

Signals to watch

Updates from Defra regarding the SFI budget and funding allocations.
Feedback from farmers regarding their experiences with the new SFI application process.
Reports on the impact of increased moorland grazing payments on local economies.

Practical guidance

Do

Engage with local farming organisations to stay informed about changes and support available.
Assess your current land management practices to ensure eligibility for the SFI.
Prepare documentation and data required for the application process in advance.

Don’t

Don’t delay in applying once the application windows open, as funds may be limited.
Don’t overlook the importance of integrating sustainable practices into your farming operations.
Don’t hesitate to seek advice if unclear about the application requirements.

Checklist

Review eligibility criteria for the SFI.
Prepare a summary of your current land management practices.
Compile necessary documentation for application submission.
Engage with other farmers to share insights and experiences.
Stay updated on government announcements regarding the SFI.

Risks, caveats, and uncertainties

While the reopening of the SFI is a positive development, uncertainties remain regarding the sufficiency of the budget to meet demand. Farmers have expressed concerns about whether the new scheme will adequately support a diverse range of agricultural practices. Additionally, the extent to which the new funding will effectively contribute to long-term sustainability in farming is still to be seen. Stakeholders will need to monitor the implementation closely to ensure that the scheme meets its intended goals.

Bottom line

The relaunch of the Sustainable Farming Incentive represents a significant step towards integrating environmental sustainability with food production in the UK. While the adjustments made to the scheme aim to address previous inequities, the effectiveness of this revamped funding will depend on its uptake among farmers and the ongoing commitment of the government to support sustainable agricultural practices.

FAQs

What is the Sustainable Farming Incentive (SFI)?

The Sustainable Farming Incentive (SFI) is a UK government scheme that pays farmers for environmentally beneficial land management practices, aiming to promote sustainable agriculture.

When will applications for the new SFI open?

Applications for the new SFI will open in June 2024 for smaller farms and those without existing agreements, with a broader application window starting in September 2024.

What are the key changes in the reformed SFI scheme?

The reformed SFI will feature a reduced number of eligible environmental actions, a cap on individual payments at £100,000, and increased payments for moorland grazing, among other changes.