SFI to re-open in two stages: CLA welcomes much-needed clarity

The Sustainable Farming Incentive (SFI) scheme will finally re-open to some farms this summer, Defra has confirmed.

The CLA has welcomed the update, as well as news that the popular Farming in Protected Landscapes (FiPL) programme is to be extended by a further three years.

Defra Secretary of State Emma Reynolds is making the announcement at the annual Oxford Farming Conference, as well as outlining a new £30 million Farmer Collaboration Fund to "support farmer groups in growing their businesses, building partnerships and sharing best practice".

She will set out how there will be two application windows for SFI in 2026, with the first from June prioritising smaller farms and those without an existing agreement, followed by a second round from September for wider applications.

Meanwhile the government will extend FiPL for three years, with £30 million in funding next year.

CLA President Gavin Lane said:

“Finally we have some much-needed clarity on the short-term direction of Defra’s farming schemes after months of limbo.

“It is essential that all farmers can access the Sustainable Farming Incentive scheme as soon as possible, regardless of farm type or size, to deliver the greatest benefits to the environment.

“We welcome news of a collaboration fund and are pleased the Farming in Protected Landscapes programme has been extended, as CLA members have been using it to develop a wide range of projects that deliver for the environment and their businesses.

“The long-term vision for farming is key and we look forward to working with Defra in developing the recommendations in the farming profitability review and the upcoming farming roadmap.”

On the decision to only allow smaller farms to apply for the next round of SFI, Gavin added: "Smaller farms need support with advice, training, skills and facilitation, but this should be more nuanced than simple size designations which risk undermining the scheme’s ability to deliver environmental improvements at scale.

“The CLA urges Defra to focus on rewarding environmental outcomes rather than imposing arbitrary caps based on farm size. Incentives should remain proportionate to the scale of delivery to ensure fairness, efficiency and maximum impact for the environment.”

The CLA is concerned about the risks of over-simplification and is conscious of the need to focus on value for money for the taxpayer.

The Environment Secretary also set out plans exploring a transformation of England's uplands.

Building on research led by social entrepreneur Dr Hilary Cottam in six upland areas during the past year, the government will work over the next two years – first in Dartmoor, then Cumbria. It will deliver "system-wide change, create farming clusters, explore new mutual funding models, and lay the foundations for new income streams, from nature-based enterprises to regenerative tourism and circular economy initiatives", Defra added.

By Susan Twining, Chief Land Use Policy Adviser

The Defra Secretary of State, Emma Reynolds, delivered her keynote speech at the Oxford Farming Conference on Thursday 8 January. There were some concrete commitments on the restart and reshaping of the Sustainable Farming Incentive (SFI), continuation of the Farming in Protected Landscapes (FIPL) funding, and a new collaboration fund. This came alongside positive intent to work in partnership with the industry to boost farm profitability and long-term growth.

The key announcements

• Sustainable Farming Incentive to reopen in 2026
• Simplification of the scheme with fewer actions, some more area limits on certain actions, and reviewing payment rates.
• Improving fairness and accessibility, particularly for small farms and those not in any schemes
• Two rounds of Sustainable Farming Incentive in 2026 – the first in June for small farms and those not in any other ELM scheme, and the second in September for all farms
• A new Farmer Collaboration Fund of £30 million over 3 years to support existing and new networks to lead their own change.
• Focus on the uplands with a plan for long term partnerships starting with Dartmoor and then Cumbria, to develop bespoke solutions through a range of funding sources.
• Extension of the popular Farming in Protected Landscape scheme for three further years with £30 million allocated in the first year across the 44 National Parks and National Landscapes (formerly AONBs).

Clarity and stability?

These announcements are all welcome. However, they fall short on the expectation of the ‘clarity and stability’ promised at the CLA conference in November 2025. Defra has had 6 months since the Agriculture Budget was set at £2.7 billion per year for the 3-year period of April 2026 to March 2029, and it might have been expected to have a more detailed plan by now.

In the short-term, what businesses need is a detailed plan of the proposed schemes and timing of application windows for the full three-year period, to support business planning.

For the long-term, there needs to be a focus on assimilating the recommendations of the Farming Profitability Review into the Farming Roadmap, and recognition of the social, environmental and economic value of the ELM schemes over the long term, beyond the current 3-year spending review.

The new SFI offer for 2026

Much of the Secretary of State’s speech focused on the reopening of the Sustainable Farming Incentive in 2026. It will have two application windows in 2026, rather than the previous rolling applications, which will provide Defra with more budgetary control. A budget amount will be allocated to each round (yet to be set), and the promise of ‘no sudden closures’ will be managed through Defra notifications. However, this does not prevent the possibility of applicants missing out if the window closes with a short amount of notice.The first window in June 2026 will be for ‘small farms’ and those not currently in any ELM scheme. The second window, planned for September 2026, will be open to all farms.

The redesign is expected to result in fewer actions, some changes in payment rates, and area limitations on more actions. This is part of a plan to ensure funding ‘goes further’, and it is important to ensure that the scheme delivers good value for money to the tax payer. However, less constructive is a potential for an agreement value cap which is being considered.

There are many details still to be worked out and the CLA will be working with Defra over the next few months:

• The definition of a small farm - Defra has said it will be area-based and referenced the 50ha used for the SFI management payment, but that it is open for discussion.
• The management of SFI funding rounds to allow fair access.
• How expiring SFI schemes in 2026 will transition and be given priority.
• The details of the new SFI actions, payment rates and area limitations.
• The negative impacts of an agreement cap.

Have your say

Do you have a view on the announcement or what was not announced? How is the rollout of the agriculture schemes affecting your business? What do you need from government to run a profitable and sustainable business? If you have a view, please get in touch with the CLA Land Use Team or your regional contact. We will be working with our National Committees but welcome further input from members. Please contact the CLA agriculture adviser Jack.chivers@cla.org.uk.