The Government announced that the budget for SFI24 has been allocated and has, therefore, closed the scheme to new applications from 11 March onwards.
Applications submitted before this announcement will still be taken forward, subject to eligibility.
For those who have been offered an agreement, they will need to accept this within 10 working days of it being offered, or else it may be withdrawn.
If you had started an SFI application and not submitted it before applications were closed you will not now be able to submit it.
The only exceptions to this are:
- a small group of farmers who were blocked from submitting their applications due to a system fault
- or those who had requested ‘assisted digital’ support from the RPA to apply, and
- ex-SFI Pilot farmers whose Pilot agreement has already ended, but they haven’t applied for the full SFI 2024 offer on land which was in their Pilot agreement.
The scheme will continue, however Defra has said there will be a ‘reset’, with a ‘new and improved SFI on offer with details to follow in the Spending Review’. It is unclear when this will be launched.
The 14 endorsed actions that were shared in draft form in December 2024 will be reviewed as part of the work to develop a ‘reformed and more targeted SFI’.
Read the NFU's response in full.
HLS uplift
At NFU Conference, following NFU lobbying, the Secretary of State announced an uplift to HLS payments, worth £30 million. The individual option payments rates will be published soon. Agreement holders will be written to in April.
The Minister also announced that the standalone capital grants will re-open for applications in the summer with a budget of £45 million in 2025/6.
Spending limits will be reintroduced. In addition, the RPA is processing the 4,000 applications suspended when the scheme was paused.
It has come to our attention that the RPA has halted payments on some SFI23 agreements due to additional land eligibility checks. This affects land where there could be a historic feature with the following actions on the land:
- SAM3 herbal ley
- NUM2 legume ley
- IGL1 grassy field corners and blocks.
These actions are not eligible on historic features. The NFU has asked the RPA to honour SFI23 payments. This issue does not affect SFI expanded offer agreements.
The new Countryside Stewardship Higher Tier offer was published in December. A pre-application period for priority applicants started in January. Plans for a third round of Landscape Recovery will be announced in due course.
Key resources
- The Defra handbook for the Sustainable Farming Incentive scheme can be found at: GOV.UK | Sustainable Farming Incentive guidance for applicants and agreement holders.
- Defra has launched a FIND tool to help farmers search through the actions.
- Watch the ‘how to apply online’ video to help you through the application process.
- Defra has published an SFI limited area actions calculator to help calculate your eligible area across multiple agreements.
Timeline for applications
The application window is closed until further notice, except for a few exceptional circumstances.
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. Each action contains advice to help you deliver the actions.
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.
Area limits
Defra has limited the combined area of ten actions to 25% of the farmed land. This limit is applied across all SFI agreements attached to the holding that started from 26 March.
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
Defra has published an SFI limited area actions calculator to help calculate your eligible area across multiple agreements.
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.
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.
Once an agreement has started, it will not be possible to add new actions to that agreement. If you have rotational actions in your agreement, you can increase or decrease the area each year (see below). Removal of land or actions will not normally be allowed.
It is possible to have multiple SFI agreements on the same area of ground, provided the actions are compatible. This allows you to increase SFI actions over time.
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.
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 breach 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.
Endorsed actions
Currently, species rich grassland (GHR6) is the only SFI action that needs endorsement from Natural England to access it.
Further endorsed actions have been shared in draft form, however they are to be reviewed as part of the reformed and more targeted SFI that Defra will publish more information about after the Spending Review.
To secure endorsement you submit your SFI application, then Natural England or Historic England will contact you. The SFI agreement will not be offered until the endorsement is secured. To prevent delays to other SFI actions you can choose to apply separately for SFI actions which do not require endorsement.
Capital item applications and offers
At NFU Conference, the Minister announced that the standalone capital grants will re-open for applications in the summer with a budget of £45 million in 2025/6.
Spending limits will be reintroduced.
In addition, the RPA is processing the 4,000 applications suspended when the scheme was paused in Autumn 2024. No timeline for next steps has been shared.
The spending limits will not be applied retrospectively to these applications.
When the standalone capital item offer re-opens for applications, the spending limits across the four categories will be:
- £25,000 for water quality.
- £25,000 for air quality.
- £25,000 natural flood management.
- £35,000 for boundaries, trees and orchards.
Only one application per SBI is allowed per year.
Applications remain open for:
- Woodland Tree Health grants, which help protect tree health against devastating plant pests and diseases.
- Capital grant plans and management plans to help support the development of new CS Higher Tier agreements.
- Protection and Infrastructure grants and Higher Tier capital grants, help support delivery of high value environmental benefits, such as re-wetting peat.
The NFU will publish more detail on this as it becomes available.
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.
Where SSSI consent is required for moorland actions, (UPL1-10) or low input grassland (CLIG3), Natural England will ask for additional information, stocking information and how you will manage the land. It is advisable to talk to Natural England or an expert adviser prior to applying for consent.
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.