SFI – scheme guidance and information

Environment and climate
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Our experts have analysed Defra’s guidance for the SFI (Sustainable Farming Incentive). You can submit an expression of interest for the latest ‘expanded offer’. Find out what you need to do.

Latest news

SFI23 will close for new applications at midnight on Monday 10 June. Any application that has already been started must be submitted within 60 days of starting.

For new SFI applications, applicants should read the guidance about the expanded offer for 2024. Applications will open fully later in the summer but to apply early, and access the new range of actions, applicants can complete an expression of interest survey. The RPA will then invite them to apply over the next few weeks.

SFI ‘expanded offer’

In May, the new SFI handbook was published for an ‘expanded’ offer covering 102 options. Initially, you’ll be able to apply for these through a controlled roll out which you register for on this expression of interest form. The offer will be widely available in late July.

Defra has also launched a FIND tool to help farmers search through the actions.

The extended SFI offer includes 57 options that were in Countryside Stewardship; only 8 of these have kept their 5 year term. The rest are 3 years in length. There are 23 new options covering precision farming, agro-forestry and stone walls.

Ten options have their total combined area restricted to 25% of the farm area. A further four are under review and may be included in the future.

Eligibility is no longer linked to BPS, allowing new entrants to access SFI.

The details for Countryside Stewardship Higher Tier will be published this summer, for applications to be made this winter.

Agreements will start from January. Higher Tier will take on many of the flexibilities in SFI including monthly start dates and an online application system.

As of 21 May, Defra has received 23,000 SFI applications.

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Key resources

What has changed?

The SFI (Sustainable Farming Incentive) offer was launched in 2023. The majority of farmers can apply directly online. Those farming on commons should express their interest with the RPA who can support them to get ready to apply.

Those that secured agreements in 2023 received an advanced payment in the first month of their agreement.

Timeline for applications

Currently, farmers can express an interest to apply for the expanded SFI offer. Applications will be through the rural payments service online. The roll out of common land agreements may take longer due to their complexity.

After you’ve created a new SFI application, you have 60 days to complete and submit it. If you have not submitted it in this timeframe RPA will withdraw it and you will need to start a new application.

The SFI offer and payments

You have free choice of which actions you take and how much you include in your SFI agreement. Some actions do have area constraints. Most actions can be on part of the field. A few, such as soil assessment and testing, are a whole field. Where the action is ‘whole field’, this is the available area of the field after incompatible areas have been removed. 

For each of the SFI actions, there are eligibility requirements, payment rates, and instructions on what you must or must not do. They are written in a way to be flexible for your farm, allowing you to use appropriate seed mixes for your soil, for example. The actions outline other actions that can be stacked on the same area; when you apply, the online system should identify this for you.

Additional payments

In addition to being paid for the SFI actions there is a management payment. The first-year payment, for agreements starting by March 2025, will be £40/ha for the first 50ha entered into agreement. After the first year, this will reduce to £20/ha. This is based on option area. There is only one payment per SBI. Your first SFI agreement will be used to calculate the payment. 

For common land (involving 2 or more people) these is an additional payment of £7/ha

Premium payments

Premium payments are being introduced. These are to encourage uptake of action with the biggest environmental impact or combinations of actions that deliver benefits at scale.

In 2024, 21 priority actions will get premium payments. For example, £765 per hectare for nesting plots for lapwing, and £1,242 per hectare for connecting river and floodplain habitat.

The actions include lowland peat, moorland grazing, and agroforestry. Most of these premium payment actions are new. Going forward the NFU expects premium payments to be apply to more actions or combinations of actions.

Capital items

Standalone Capital Grants are available with a rolling application window, meaning you can make applications at any time of year.

The Capital Grant 2024 offer provides standalone capital item agreements that deliver environment outcomes within four groups, boundaries, trees and orchards; water quality; air quality; and natural flood management. There is no limit to the value of capital items in these groups. There are 70 options available.

Future offer

In May, 102 SFI actions were published. This list may be added to later this year, for example, introducing an educational access action. This summer, more endorsed actions will be added covering actions for farmland wildlife and habitats on grassland, heritage, wood pasture, orchards, coastal habitats and waterbodies.

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Area limits

Defra has limited the combined area of ten actions to 25% of the farmed land. The actions limited are:

  • CIPM2: Flower-rich grass margins, blocks, or in-field strips
  • CAHL1: Pollen and nectar flower mix
  • CAHL2: Winter bird food on arable and horticultural land
  • CAHL3: Grassy field corners or blocks
  • CIGL1: Take improved grassland field corners or blocks out of management
  • CIGL2: Winter bird food on improved grassland
  • WBD3: In-field grass strips
  • AHW1: Bumblebird mix
  • AHW9: Unharvested cereal headland
  • AHW11: Cultivated areas for arable plants

An additional four actions are being kept under review and may be added to the list at a future date. These are:

  • AHW3: Beetle banks
  • AHW5: Nesting plots for lapwing
  • AHW12: Manage woodland edges on arable land
  • SCR1: Create scrub and open habitat mosaics

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Eligibility

You need to have management control of the land to deliver the actions to be eligible for SFI.

Then there are eligibility requirements for the SFI actions. Broadly, these require the land to be recorded on Rural Payments with the appropriate cover. For example, for SFI arable actions, the field needs to have arable crops recorded. In addition, you need to have management control to be able to deliver the required actions.

Tenants

Tenants can apply for SFI without seeking their landlord’s consent (subject to the terms of their tenancy agreement). The tenant needs to be confident that they will have management control for the three-year term of the SFI agreement.

Tenants on short-term rolling tenancy agreements can enter SFI, provided they expect to have management control for three years. Defra has a more lenient penalty regime which means if land has to be removed in year two, due to issues outside of your control, it will not lead to penalties. At most, you may need to repay monies received for the year in question.

Common land and shared grazing

Areas of common land or shared grazing will have their own agreement. The common will need to have its own SBI and meet the basic eligibility requirements. In addition, it will need to be set up as a single entity which has legal arrangements in place to manage the agreement, and have its own bank account.

There is a payment of £7/ha where the common involves two or more people.

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Agreement management

The length of the agreement will mirror the longest action included (usually 3 or 5 years). Some actions could be shorter than the length of the agreement. Agreements are managed online through the Rural Payments service, and there is a rolling application window. Agreements will start on 1st of the month. RPA support will be available for applicants who are not online.

Payments will be made quarterly, starting in the fourth month after your agreement starts. This will be for a quarter of the annual value of the agreement. 

You will be required to complete an annual declaration confirming that you have completed the actions. This declaration will be needed to release the final quarterly payment for the year.

Each year it will be possible to increase your delivery by adding land or actions. These will apply from the anniversary of your agreement, for the remainder of your three-year term. Removal of land or actions will not normally be allowed.

It is not possible to transfer the agreement to another person. If you do need to end your agreement on an area of ground Defra may ask for repayments. There will be no penalties applied to the remainder of the agreement.

Crop rotations

Within SFI some actions can be rotated. SFI does provide flexibility to vary the area claimed for year on year.

In the second and third years of your agreement you can enter a larger area than you entered into agreement for. Alternatively you can decrease the area claimed, as long as it is at least 50% of the first year area. So, if your agreement has 10ha in year one for a rotational action, in year two that area could be 5ha and in year three it could be increased to 11ha.

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Monitoring and compliance

Each SFI action has its own record keeping requirements. For example, you will need to create and maintain a soil management plan for the first of the soils actions as well as keeping your soil test results.

Defra says it wants to use different methods to assess agreement delivery, including remote sensing. The scheme moves away from inspectors to field officers. If they find something is not as it should be they have a role of being more supportive and advising how to improve delivery. Defra will not withhold payments on suspicion of any breach.

Where a breech is found, Defra can seek repayments. However, in most cases, Defra will only apply a reclaim to the area of the breach and it could be a one-year repayment, rather than multiple years.

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SSSIs and other regulations

It is your responsibility to make sure the relevant consents are in place. Therefore, if you have land you wish to include with an SSSI or a scheduled monument, you need to have consents from Natural England or Historic England respectively.

Some SFI actions cannot be carried out on land containing a SSSI, historic or archaeological features. An SFI HEFER (Historic Environment Farmed Environment Record) will be required for land to be included where there are historic or archaeological features. This is available online through a HEFER portal.

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Compatibility with other schemes

You can have different schemes on the same parcel of land provided you are not being paid for the same action twice (known as double funding). 

The scheme rules set out which SFI action is compatible with Countryside Stewardship or Environmental Stewardship options and SFI pilot standards, allowing them to be co-located. The Rural Payments service application system will calculate the available area in each for SFI action, removing areas with incompatible options or actions.

Land attracting private finance, such as carbon or natural flood management payments, can be entered into SFI. Defra will keep this under review.

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SFI22 agreements

All SFI22 agreements ended on 31 March 2024. These agreement holders may still be waiting for their final payments. Agreement holders will need to have submitted an exit declaration to release payments. Following the closure of the agreement there are three payments due:

  • the final quarterly payment
  • management payment; and
  • the final closure payment.

These payments are underway as of May 2024.

If your agreement was affected by wet weather, leading to an inability to deliver between October 2023 and end March 2024, then you should have notified the RPA. If you’ve not submitted your exit declaration and still need to notify RPA of wet weather issues, then you should complete an SFI query form.

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This page was first published on 03 January 2023. It was updated on 07 June 2024.


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