Sustainable Farming Incentive closure: questions and answers

Defra announced the closure of the Sustainable Farming Incentive scheme to new applicants with immediate effect on 11 March 2025. Below, we answer the most pressing questions for farmers and explain why this announcement is so significant for the environment and agricultural sector.

• The SFI is one of the three Environmental Land Management (ELM) schemes, the others being Countryside Stewardship (CS) Higher Tier, and Landscape Recovery.
• The SFI was designed to be a universal scheme available to all eligible farms with the flexibility to choose the actions that are most appropriate for each business. The rolling application windows and quarterly payments were significant innovations.
• The scheme had a difficult rollout, with a pilot in 2021, an aborted version in 2022, a limited rollout of 23 actions in 2023, and then finally, the SFI 2024 expanded offer launching in June last year.
• SFI 2024 was a big step forward, incorporating the previous CS Mid Tier scheme and the SFI 2023 offer, with new actions and some CS Higher Tier actions.
• SFI 2024 had a choice over 100 actions, including 10 limited-area actions on up to 25% of the land entered, and endorsed actions that require input from Natural England or Forestry Commission. Most actions are a three-year commitment, but there were 10 actions under five-year agreements.
• A further 14 endorsed actions were expected to be added in summer 2025.

• The scheme was closed on 11 March 2025. It applies to new submissions only, all existing agreements will be honoured and applications awaiting approval are not affected.
• Defra stated the reason for the closure is due to the SFI budget limit being reached.
• The industry was informed of the Defra decision at the point of closure. 

• For those with one or more of the 37,000 agreements in place there is no change, and you should continue as planned.
• For those with applications submitted you will need to wait for approval and sign agreements within the 10-day limit.
• For all others there is no access to the scheme, other than for a few who have requested digital support or have been affected by technical issues.

• There are no published figures on the numbers affected, and it will depend on how many were planning to apply. But based on the Basic Payment Scheme (BPS) applicant numbers of 80,000 holdings, or the total 102,400 holdings in England, it is likely that more than half have not applied yet.
• It will also affect those who planned to put in an additional application for some of the new actions.
• There is an assumption that these applications will mainly come from smaller businesses but it will include those of all sizes.

• A new scheme will be developed over the coming months.
• It will not be available for application until 2026.
• Its funding level will be dependent on the June 2025 Spending Review.
• This means that those farms not already in SFI will likely have a minimum 12 month wait from now to access any funding.
• The new scheme is also likely to be very different with fewer available actions, more capped actions and more targeting. There is an intention to focus on farms that can deliver more for the environment and those that have less profitable farming – what that looks like in practice is still to be determined.

• It could have significant impacts on businesses that were relying on the SFI income as part of their business plan. The CLA is keen to hear from you if you are affected and how it will change your business. Please contact your regional team or cameron.hughes@cla.org.uk.
• The first important step is to assess the impact on the business plan and cashflow, for this year and for future years.
• It is unlikely that the new scheme will work in the same way with the same actions so future business planning is more difficult and would be sensible to be modest in expectations.
• There may be ways to cut costs, such as delaying machinery purchases or reviewing labour or other expenditure, but these are not without their own drawbacks.
• There may be options to raise funds to cover any gaps, such as changing sales patterns, but these are also not without consequences.
• Discussion with an adviser or banks may be necessary.
• If your mental well-being is being affected by the changes, there are a number of farming charities out there, such as Farming Community Network, which can provide support and advice.

• Quite simply, the CLA is aghast at the decision and the way it has been implemented. The SFI was always billed as the universal element of ELMs, to support the transition to more sustainable farming practices and environmental delivery. It is a core part of ELMs designed to reward farmers for delivery of public goods and its success depends on the collective small actions to make a big difference.
• The CLA is working with Defra to highlight the problems and working on possible measures to mitigate some of the impacts.
• We are continuing to work with politicians across the House of Commons, to highlight the intense pressure that is being put on farming by not only this but the latest series of policy decisions.