SFI26: what you need to know ahead of window 2

The first window of the Sustainable Farming Incentive (SFI) 2026 launched on 30 June 2026, and following high initial take up, ran through to the eventual closing date of window 1 on 28 August. In this blog, we take stock of the SFI26 scheme so far, and look at the second window, expected to open on 22 September 2026.

As we wrote at the time, window 1 was targeted primarily at smaller farm businesses and those who did not hold an existing Environmental Land Management (ELM) revenue agreement. At the opening of the scheme, demand proved strong. Defra updates showed that approximately 25% of available funding  (£60m in total for window 1)  was allocated during the first day of opening. This was followed by an announcement shortly after that around 50% of funding had been allocated, before the department confirmed that approximately 75% of the available budget had been committed by mid-July.

Demand did slow, and Defra ultimately confirmed that window 1 would remain open until no later than 28 August 2026, allowing submissions throughout the full application period.

Information published by Defra following the closure of the first SFI26 window indicates how the funding was distributed. Around 7,000 applications were submitted, with 87% of applications being from businesses without an existing ELM revenue agreement. The average agreement value is below £10,000 per contract year.

This compares with information confirmed on 29 January, that for SFI23 and SFI expanded offer agreements, the mean average agreement value over its lifetime was £57,000 (£19,000 per year).

Attention now turns to window 2, which represents an opportunity for a much broader range of farm businesses.

Window 2 is expected to open on 22 September 2026. It will be available to all eligible farmers and land managers including those with existing agreements expiring before 28 February 2027, known as the ‘start an application early’ (SAE) mechanism. Window 1 applications that were started but not submitted will be retained on the system unless they were withdrawn by the Rural Payments Agency (RPA).

Defra originally announced a budget of £180m for the window, alongside confirmation that any unallocated funding from window 1 would roll forward  (yet to be verified). There has not yet been confirmation on how much funding will be rolled over.  More recently, the government announced an additional £50m of funding for SFI window 2.

Demand is expected to be high and most likely be in excess of the available budget. The agreements are allocated on a ‘first come first served’ basis, so early application is encouraged. The scheme will remain open until all funding is allocated. Defra expected to issue updates when 50% and 75% of funding is allocated.

Demand will be pressed by the number of expiring Countryside Stewardship Mid-Tier and SFI23 agreements, who are now able to make use of the start an application early mechanism (see below). Many businesses who could not access window 1, alongside those who were not eligible, are expected to apply when the second window opens.

Defra has introduced a new start an application early (SAE) mechanism for SFI26 window 2 that will apply to all submissions. It enables businesses with expiring agreements (see below for details) to apply before their agreement ends. This was previously not possible and the change is a response to issues raised by the CLA and other organisations.

Under the start an application early mechanism, eligible applicants whose agreements are due to end on or before 28 February 2027 can apply when window 2 opens, with this SFI26 scheme commencing once any existing agreements finish. The following are eligible:

• SFI23 agreements ending monthly from 30 September 2026 to 28 February 2027
• CSMT (Countryside Stewardship Mid-Tier) agreements ending 31 December 2026
• Legacy CSHT (CS Higher Tier) agreements ending 31 December 2026
• Environmental Stewardship Higher Level Stewardship (HLS) agreements ending by 28 February 2027

Applications can be made while eligible agreements are ongoing, although the SFI26 agreement will only commence once the applicant’s final eligible agreement has ended. The SAE mechanism is not optional, and therefore, if you have an eligible agreement, your SFI26 agreement will not commence until the final eligible agreement expires. For clarity, this does not permit duplicate funding for the same activity.

Further information can be found in section 3.8 of the SFI26 Scheme Rules and Guidance.

A further clarification from Defra relates to applicants who began a submission during window 1 but did not manage to apply it before the window closed.

Defra has confirmed that, in most circumstances, applications that were started but not submitted during window 1 will remain available within the online application service. This means you should not generally need to begin the process again from scratch when further opportunities become available.

However, some farmers with an application that was started, but not submitted, will have to start a new application in window 2. This applies where the RPA has withdrawn the application because:

• “the farmer requested a mapping update after starting their Window 1 SNS application, meaning a new application is needed to reflect the updated land details; or
• the farmer has an existing Environmental Land Management (ELM) revenue agreement that expires on or before 28 February 2027, meaning a new application is required for the ‘apply early’ functionality to work.”

For businesses that can make use of this option, this announcement provides some reassurance. Those applicants should continue to monitor communications from Defra and the Rural Payments Agency and ensure that any information held within their online application remains accurate and up to date.

The application will still need to be submitted once SFI26 window 2 opens.

Although Window 2 has not yet opened, there are several preparatory steps applicants should take now.

1. Review Digital Maps

Mapping issues continue to be one of the most common causes of delays and complications. Applicants should ensure boundaries are correct, land covers are accurately recorded, and any required changes have been submitted to the Rural Payments Agency (RPA) as early as possible.

Mapping changes cannot often be completed immediately by the RPA. It is therefore paramount that maps are all updated in good time before making an SFI (or other ELM agreement) application.

2. Action Review

Review the updated SFI26 actions carefully. While many actions will be familiar from previous rounds, some have had slight amendments to the action’s aims, requirements, or compatibilities. Businesses should not assume that previous options operate in the same way. Reviewing action requirements now will help avoid last-minute changes when application windows open. Additionally, ensuring compliance with each action’s requirements will minimise any potential issues with the RPA as part of their compliance checks.

For each action on the SFI26 print version, Defra has included a summary of what changes have been made between the SFI24 and SFI26 scheme: SFI26 actions (print version) - GOV.UK.

3. Check for holding designations 

Farmers should also take the opportunity to check whether any land-based designations apply to their holding. This includes ensuring that Sites of Special Scientific Interests (SSSI), SHINE (Selected Heritage Inventory for Natural England) features, Scheduled Monuments, listed historic features and other environmental or heritage designations are correctly identified. These designations may influence which actions are appropriate and, in some cases, whether additional consents or management considerations are required. Understanding these constraints early can help avoid delays and ensure applications are built around what is deliverable on the ground.

When applying for a SFI, applicants can establish if there are any features of archaeological or historic interest on the land by applying for a Historic Environment Farm Environment Record (HEFER). CLA members can access our guidance note GN26-02 which considers Agri-environment Schemes - Designated and Non-designated Historic Features.

Further information on preparation concerning the land and designations can be found on a previous CLA blog here.

4. Consider the whole farm context 

Finally, consider how SFI fits into wider business objectives. Environmental agreements are likely to remain an important income stream for many businesses, but they should also support broader aims around productivity, resilience, water management, soil health and long-term business planning.

The CLA recognises that some farmers will be unable, or may choose not, to access SFI26. This may include those whose applications were unsuccessful, those waiting for future opportunities to apply for SFI agreements, or businesses whose current circumstances do not support an SFI26 application. 

For these farming businesses, alternative opportunities remain available. One option is to await further details on future SFI arrangements. Following sustained lobbying by farming organisations, Defra has publicly confirmed its intention to introduce an SFI27 scheme in 2027.

Alternatively, businesses may wish to explore other government support schemes, such as Countryside Stewardship Higher Tier, or consider a range of other environmental funding opportunities that may be available.

Countryside Stewardship Higher Tier (CSHT) continues to develop and may offer an appropriate route for holdings managing priority habitats and environmental features. One route could be through entry into full CSHT agreements. These can take time and will need input from Natural England. Applicants may need to complete preparatory work, including a feasibility study and implementation plan. Further information can be found here. Businesses can also contact ruralpayments@defra.gov.uk with CSHT in the subject header to submit general questions on CSHT (businesses are recommended to include their SBI number in correspondence).  

Businesses can also consider engaging with the Higher Tier Expression of Interest process for single-focus agreements. They permit applicants to register their interest in the following agreements:

• Scheduled monument management
• Species-rich grassland
• Agroforestry
• Woodland Improvement

The CLA is currently engaged in ongoing communication with the Rural Payments Agency to understand how the process works for applicants. We ask that any members who are willing to share their experience of the process please reach out to Harrie.Mort@cla.org.uk so that we can understand how the CLA can improve the route into CSHT.

Outside government schemes there is funding available through a range of agreements for environmental management. These vary in considerably in their type, rewards and risks:

• Offset markets – creating credits for sale to offset carbon or nature impacts based on standards such as the Woodland Carbon Code, or Biodiversity Net Gain.
• Business funding – corporates and other businesses often wish to fund environmental management as an alternative to costly engineering work. For example, water companies are increasingly investing in catchment-based approaches to improve water quality and reduce treatment costs. Similarly, businesses may wish to demonstrate their environmental responsibility through funding projects.
• Charities – charities such as the Woodland Trust, Wildlife Trusts and other national and local charities often have funding for environmental projects of all scales.
• Supply chain initiatives are also expanding as businesses seek to demonstrate environmental outcomes, reduce carbon emissions and improve sustainability credentials.