Defra announces increases in CSS and SFI payment rates

Defra has announced an increase in the payments on offer under the Countryside Stewardship Scheme (CSS) and Sustainable Farming Incentive (SFI), to encourage more farmers to sign up to an agreement.

The increases were announced by farming minister Mark Spencer at the Oxford Farming Conference.

The revenue payments under CSS – which cover a list of about 130 management options – will increase by an average of 10%, while capital payments offered through the scheme will increase by an average of 48%.

A new top up payment for the SFI of up to £1,000 per agreement per year has also been agreed.

Countryside Stewardship payment rate details

The CSS payment rates have been updated to be in line with rising input costs, meaning that some capital payments have significantly increased.

For example, the fencing payment has increased by 59% to £6.34/m, while the hedgerow planting payment has risen by 98% to £22.97/m.

Revenue payments have also been updated, with some options benefiting from significant increases.

For instance, the AB10 unharvested cereal headland payment has increased by 28% to £822/ha, but most options have increased by 10% or less.

These updated payment rates have been introduced as it was recently announced that an enhanced version of the Countryside Stewardship Scheme will now be developed as part of the Environment Land Management (ELM) scheme to replace the previously announced Local Nature Recovery element of ELMs.

Both current CSS agreement holders, those whose agreements start in January 2023 and those applying to the scheme this year will benefit from the revenue revised payments.

Defra had originally announced that the increased capital payment rates would only apply to agreements applied for on or after 5 January 2023. But after farm leaders pointed out this was unfair, Defra agreed that it would bring this date forward to 1 January 2023. The RPA estimates this amendment will benefit nearly five thousand farming businesses. 

Unfortunately, farmers with CSS or SFI pilot agreements which began in 2022 or earlier, will still receive the old capital payment rates set out in their agreements. In these cases, claimants do have the option to withdraw individual capital works from existing CSS agreements or to withdraw whole agreements and reapply for them if the works have not been started and where materials have not already been ordered.

Much to the disappointment of old HLS and ELS agreement holders, Defra has also decided not to increase their payment rates which does seem unfair.

Introduction of a management payment for SFI agreements

The additional £1,000 annual payment on offer for SFI agreement holders comes in the form of a new Management Payment.

It will be available at a flat rate of £20/ha for up to 50ha entered in the scheme. This aims to incentivise a larger take up of the SFI, compensating farmers for the administrative burden of entering the scheme.

The payment will apply to both new and existing SFI agreements but not to SFI pilot agreements as claimants already receive £5,000 to participate in the pilot.

Strutt & Parker’s verdict

Although the payment changes are a right step in the direction in terms of paying more fairly for environmental outcomes, it seems unlikely that a 10% increase in CSS management payments or the extra £1,000 on offer through the SFI will deliver a step change in uptake of the schemes. The NFU has welcomed the enhanced payments but warned they might be ‘too little too late’, given the challenging economic environment farmers are currently working in, which includes the phasing out of direct payments.

Agri-environment schemes are an important part in supporting biodiversity, as recent research from the RSPB has found that farms devoting 10% of their land to environmental options such as wild field margin, can boost farmland bird populations. However, to be able to deliver this type of public good, farmers must be supported by fair payments.

Lists of the updated rates have been published by Defra and are available here for revenue options and here for capital items.

For more details of the changes contact Marie Charles.

This article has been updated to reflect Defra’s announcement on 18 January that revised capital payments under CSS will apply to new applicants and those with agreements that started on or after 1 January 2023.