Defra’s Sustainable Farming Incentive: CLA analysis

CLA Senior Policy Adviser Harry Greenfield analyses the detail in Defra’s latest update about new agricultural schemes and payment rates

Following its publication of the Agricultural Transition Plan in November, Defra has published a further update including details of new schemes that will be available next year as well as information about payment rates for all current and future schemes.

What does this mean for members?

As part of the agricultural transition, Defra is developing a series of new Environmental Land Management (ELM) schemes as well as productivity and animal health and welfare programmes. The three ELM schemes are the Sustainable Farming Incentive (SFI), Local Nature Recovery (LNR) and Landscape Recovery (LR).

Sustainable Farming Incentive

The SFI is being developed first, with pilots beginning this year, and more than 2,000 people have applied to take part. The SFI sets a series of standards for different types of land and environmental features (for example, grassland, arable and hedgerows). Payments will be made for management actions that fit with farming practice and deliver environmental and climate change objectives. Defra’s aim is for 70% of farmers to have entered the SFI by 2028 to achieve widespread uptake of sustainable farming practices.

In addition to the pilots, some elements of the scheme will be made available to farmers from 2022 as part of a phased introduction. Three standards are being introduced:

  • Arable and Horticultural Soils Standard
  • Grassland Soils Standard
  • Moorland and Rough Grazing Standard

Taken together, these should offer many farmers the chance to receive an additional income stream, which can be claimed on top of existing stewardship schemes. This will go some way to offsetting the loss of Basic Payment Scheme (BPS) payments and should also help the sector get used to the new schemes by dipping a toe in the water.

Animal Health and Welfare Review

As well as these environmental standards, 2022 will also see the introduction of the Animal Health and Welfare Review. This will fund an annual visit by a vet, who can assess the farm and give advice on how to control diseases and improve animal welfare. This is the first step along the Animal Health and Welfare pathway being developed by the government and industry, which will unlock further funding and support to help stamp out livestock disease and improve animal welfare.

Review of payment rates

Finally, Defra also published information about its approach to payment rates across all schemes. As CLA members will be aware, payment rates for current environmental schemes are often not high enough to attract people. The CLA has long argued that if the government is serious about rural land management helping deliver net zero and nature’s recovery, then those managing the land need to be properly incentivised to get involved.

Moving beyond the current discredited system of payments based on income foregone and costs incurred (which simply doesn’t work when the net income from farming is often negative) is a good start.

We have to pay land managers based on the real value of what they are delivering – whether that is building healthy soil or creating thriving wildlife habitats.

This is why we welcome the statement of principles from Defra, which recognises both the need for payments to be high enough to attract participants to the schemes and the importance of recognising the good work that has already been done. It is no good only paying people to create new environmental features – this is both unfair to those who have already been good stewards of the land and risks the perverse outcome of people ripping up hedges or ploughing up meadows so they can be paid later on to reinstate them.

The fact that the new payment rates will apply to Countryside Stewardship too, including existing agreements, is only fair. This is one way of implementing the so-called “Gove Guarantee”, which the CLA successfully lobbied for, that no one should be at a disadvantage if they are in existing schemes compared to what is on offer from the new schemes.

Ensuring the transition works for CLA members

There is still a great deal of work to do to improve the environmental land management schemes. Much will be learnt from the pilots and the phased roll-out of the SFI.

The CLA will continue work to make sure that these new schemes work on the ground for farmers and land managers. We will also continue to lobby to ensure the agricultural transition as a whole achieves the government’s aims: a profitable, sustainable agriculture sector, delivering healthy food and contributing towards national environmental goals. There remain various risks to achieving this, and we are not complacent about the role the CLA needs to play to ensure this is actually achieved.

More information is available on Defra's website.

Key contact:

Harry Greenfield
Harry Greenfield Senior Land Use Policy Adviser