Sustainable Farming Incentive (SFI) scheme open

The Sustainable Farming Incentive (SFI) is now open to all farmers in England, with the focus being on measures to improve soil health.

Anyone who currently receives Basic Payments can apply to the SFI and there is no application deadline – farmers can sign up at any time.

There are three standards available initially, but more will be added over the next three years.

The standards available in 2022 are:

·      Arable and horticultural soils standard

·      Improved grassland soils standard

·      Moorland standard

Details of the payment rates and requirements under each standard can be found in our previous blog post on Practical pointers on the 2022 Sustainable Farming Incentive.

Defra says it has worked hard to make the scheme as accessible as it can, by giving farmers the flexibility to decide how much of their land they want to put into the SFI and the level of effort they want to make.

Farmers can choose whether to sign up to an introductory, intermediate or advanced level of each of the standards.  The level of standard chosen can vary across the different land parcels on a holding.

If they have no other agri-environment agreements in place, applicants will be able to apply online straight away.

However, farmers who have an existing agri-environment agreement, or who want to apply separately on common land, need to contact the Rural Payments Agency (RPA) first to register their interest.

Farmers will receive their first payment three months after joining the scheme and will receive quarterly payments after that.

SFI uptake?

The government has set itself the target of 70% of farms and farmland being part of the scheme by 2028.

But there is already widespread concern that the SFI does not offer enough of an incentive to encourage farmers to join and certainly discussions with many of our clients seem to support this view. DEFRA’s desire to offer ‘flexibility’ to encourage uptake of SFI may also have the opposite effect by simply adding more complexity to a scheme that offers low levels of income.

Payments under the arable and horticultural standards currently range between £22/ha (introductory) and £40/ha (intermediate), while those under the grassland standard range from £28/ha (introductory) to £58/ha (intermediate).

There are businesses who are already doing much of what is required and for those the SFI may be worth consideration. However, others may find that a Countryside Stewardship Scheme (CSS) application remains a better option. There are possibilities to stack both SFI and CSS payments as long as options deliver different outcomes and no double funding takes place. But the need to avoid double payments on land in existing stewardship schemes that will overlap all or part of a SFI 3-year term seems particularly cumbersome to manage. Time is also tight for anyone wanting to go down this route – the deadline for mid-tier CSS applications is 29 July 2022.

Farmers may warm to the SFI once new options start to be introduced. Defra has said the SFI will expand each year, promising a full set of standards in 2025, including ones on nutrient management, integrated pest management and farmland biodiversity. It may be that as the scheme develops, the payments on offer will start to look more worthwhile to farmers, particularly as BPS payments continue to decline.

 If you would like to know more the SFI or any of the other Defra schemes available contact Jonathan Armitage, head of farming.