Sustainable Farming Incentive decisions raise doubts over government’s ability to administer scheme

Earlier this week, Farming Minister Daniel Zeichner made the surprising decision to ‘retake’ the decision to close the Sustainable Farming Incentive (SFI) for some prospective applicants. This followed the news that Defra was facing a legal challenge over the sudden closure of SFI in March.

In a statement, the farming minister announced that those who started but did not submit an SFI application between 12 January and 11 March will be invited to submit an application, with around 3,000 prospective applications in this group.

While the choice of actions is understood to be the same, some key rule changes will apply to those that do proceed with an application:

• Agreements will be capped at an annual value of £9,300/ year (this does not include the management payment which is up to £1,000/year).
• The number of new SFI applications will be limited to one per single business identifier.
• Agreement holders will not be able to add more land to rotation SFI actions after the first year of their agreement.

The RPA and Defra are in the process of identifying how to implement the minister’s decision. There will be a six-week application period, though the start date for this is still to be confirmed. Those that started applications before 12 January will not be invited to submit applications, though the RPA and Defra may identify some exceptional circumstances.

The CLA supports this effort to partially make amends for the sudden and unexpected closure of the scheme; those who spent time and money on unsubmitted applications have not completely wasted their efforts. It is unclear how closely linked the decision is with the recent legal challenge, which may have been the primary driver that prompted the review.

The decision to cap the agreement value to £9,300/year is a limiting factor, with the minister claiming they took the median agreement value to be fair. The reality is that the mean SFI agreement values are much higher than this, and some hoped to submit applications of a much greater value.

The decision to re-open the scheme to a subset of applicants who will be operating schemes under different rules also creates extra unwanted complexity to a scheme that was supposed to be simple. This will be the fifth version of the SFI. Previously, there has been the SFI pilot (closed), SFI 22 (closed), and there are SFI 23 agreements and SFI expanded offer agreements running live at the moment. This is all ahead of the introduction of a sixth version of the scheme later this year or early in 2026, not to mention existing Countryside Stewardship and Environmental Stewardship agreements, all of which pose a challenge for farmers and advisers trying to grapple with different versions of agri-environment schemes.

For example, some businesses will have planned to apply, only for the scheme to close unexpectedly before re-opening in a limited fashion two months later. Though many will be grateful for the opportunity to submit at least some form of application, businesses will rightly feel messed around.

The farming minister has stated that these additional agreements will “need to be funded from other areas of Defra’s departmental budget”, though it is not clear where this will come from. At one extreme, Defra could need to find another £31m (although not all applicants will maximise the agreement value).

Looking ahead, there will be speculation as to how the new rules for this cohort of agreement holders will influence the design of the future version of the SFI. Ministers have already questioned the value of some aspects of SFI and have pledged that the future version of the scheme ‘will target public funds more effectively’. For the next version of the scheme, budget controls will be inevitable; however, capping agreement value at a relatively low level hinders the delivery of the government’s environmental targets.