The latest on the Sustainable Farming Incentive

CLA Land Use Policy Adviser Cameron Hughes explains the key features of the first of three government environmental schemes in England as applications open

The Sustainable Farming Incentive (SFI) in England - the first of the three Environmental Land Management (ELM) schemes has been launched. The CLA’s policy team, and many of its members, have worked closely with Defra in the development and shaping of the new scheme, so it is an important milestone.

The past 12 months has seen the launch of many new schemes aimed at supporting farming, such as the Farming Investment Fund grant scheme and the Future Farming Resilience Fund. However, for many farmers and land managers, the Sustainable Farming Incentive will be the first taste of the much-talked about shift toward payments for public goods.

Information on what the Sustainable Farming Incentive might look like and pay for has been emerging over the last six months, with an announcement in March outlining the core details. Taking it back to its starting principles, the Sustainable Farming Incentive is designed to pay for environmental and climate benefits delivered from sustainable farming practices, and is built around a series of standards for different types of land and environmental features. Land entered into the standards has to be managed following a set of actions. The three standards that have been introduced this year should cover most land types, with further standards being added in the coming years, including ones for hedgerow and nutrient management.

Key features of the SFI

  • There are three standards available in 2022:
    • The arable and horticultural soils standard
    • The improved grassland soil standard
    • The moorland standard
  • Businesses that are eligible for Basic Payment Scheme (BPS) payments can apply
  • SFI agreements are for three years
  • There is a rolling application window (no deadline)
  • Payments for the SFI will be made quarterly
  • There will be opportunities to add new standards to an existing agreement as they are launched
  • There is no minimum or maximum application area
  • Simple online application process
  • Short time (weeks) between application and issuing agreement

Payment rates

Arable and horticultural soils

Level: Introductory

Payment: £22/ ha

Level: Intermediate

Payment: £40/ ha

Improved grassland soils

Level: Introductory

Payment: £28/ ha

Level: Intermediate

Payment: £58/ ha

Moorland

Level: Introductory

Payment: £10.30/ ha

Level: Additional payment

Payment: £265/ agreement

The Rural Payments Agency (RPA) conducted testing with a group of volunteers ahead of the launch, in an attempt to iron out any issues. It is confident all the systems work. The CLA put forward several volunteers, and early feedback has been that the online application process is easy and straightforward. The RPA has produced a helpful 10-minute video setting out how you apply, and if you do run into problems, the RPA is on hand to help.

The CLA is encouraging members to have a look at the Sustainable Farming Incentive and keep an open mind. It is voluntary, and it will not suit all businesses, but it is worth considering. As new standards are introduced in future years it could build into a valuable payment.

The Sustainable Farming Incentive is being introduced as the BPS is phased out. The first cuts in BPS became a reality in 2021, with a further 15% cut this year. In May, the government announced split payments for BPS from now on, with 50% of BPS payments being made from mid-July, and the remainder from December. However, it is important to recognise that the total amount will still be subject to the cuts. There will be further 15% cut each year in 2023 and 2024, with typical BPS payments being cut by a total of 50% by 2024. Therefore, it is important that members consider the impact that the removal of BPS will have on their business and plan for the future on this basis. The SFI scheme is one scheme among many, and we recommend members consider the requirements to determine whether the scheme fits with your business.

The CLA has been gathering member feedback on the SFI since its conception well over a year ago, and we are eager to hear member feedback on the scheme and whether or not it is working for you. Please contact CLA Land Use Policy Adviser Cameron.Hughes@cla.org.uk to share your views or to ask any questions about the scheme.

Sustainable Farming Incentive
GN30-21 Environmental Land Management: Sustainable Farming Incentive

Key contact:

Cameron Hughes
Cameron Hughes Land Use Policy Adviser