Sustainable Farming Incentive update

The first of the new environmental land management schemes, the Sustainable Farming Incentive (SFI), will be launched later this year. Further details on the scheme were announced by the Government recently, including how the SFI can be combined with other environmental schemes including Countryside Stewardship.

We are becoming used to a steady drip of information from Defra about the new agricultural policy. This is frustrating for those who want all the information in front of them to aid decision-making. But it does allow for the details to be clarified and refined as new schemes are developed, not least in response to feedback from the CLA and farmers on the ground.

The latest raft of information from Defra on the SFI means that the full details and requirements for the scheme are finalised, including the payment rates and standards.

There were also some important new pieces of information. For example, we now know that application windows will be rolling, starting in June 2022. This means that farmers will be able to apply to the scheme at any point in the year depending on what suits there circumstances. Payments are likely to be made quarterly in arrears, so the first payments are likely to be made at the end of this year for those who sign up as soon as the application window opens.

The other important clarification was on how SFI agreements can be combined with other environmental schemes. The Local Nature Recovery scheme is the successor to Countryside Stewardship and will be available in 2024.

Until then many farmers are looking to Countryside Stewardship (CS) as part of their transition strategy, given the scheme offers a guaranteed income stream for 5 years amid much other uncertainty.

CS saw a dramatic increase in applications last year, following a review of payment rates and improvements to administration of the scheme. The application for new CS agreements (which will start in January 2023) is now open, so farmers are actively considering whether to enter.

We know from our recent series of Agricultural Transition Roadshow events that many CLA members were struggling to make decisions without knowing how or if it is possible to combine SFI and CS agreements on the same land. Defra had previously said that it would be possible to combine the two schemes on a farm, provided that the relevant management options or standards were not incompatible, and that the same thing was not being paid for twice (double funding).

Given that both schemes have similar environmental objectives, there is inevitably some overlap between them. This left plenty of room for interpretation so it is good to see that some more detail has now been provided by Defra here.

The guidance includes a list of eligible options which can be present on land entered into the SFI soils standards (Arable and Horticultural Soils standard and Improved Grassland Soils standard). Any land in CS options not in this list cannot also be entered into an SFI standard. The farm can still enter the SFI but the parcels or land area in ineligible CS options will be excluded from the SFI agreement.

Defra have also confirmed that a number of rotational arable options in the CS scheme will be ineligible for the SFI. Again, this means that the amount of land in the CS option will be removed from the total land area in the SFI standard. IN the case of rotational options, however, the location of the ineligible land will change each year.

This clarity should aid members who are deciding between SFI and CS, or who are already in CS and considering the SFI.

Although we expected many of these overlaps to be ruled out due to the double funding rule, it is still frustrating for those members already in CS to not be able to enter into SFI. We have been in discussions with Defra about finding ways round this, to enable members to access the new schemes and not disadvantage those who are already taking positive action for the environment on their farms.

We encourage any members who have questions or concerns about the list of eligible and ineligible CS options to get in touch.