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In March, Defra announced that new SFI applicants will only be able to put 25% of their land into six of the SFI actions which take land out of direct food production.
At NFU Conference, the Prime Minister announced a doubling of the management payment to a maximum of £2000 for the first year of the agreement. The wider SFI/CS offer should be available to apply from July 2024.
At the Oxford Farming Conference, the Environment Secretary Steve Barclay outlined how SFI will continue to evolve.
Across SFI and CS, payments will be increased on average by 10%. Higher payment rates will be applied to existing agreements. More options will be available to apply for, or to add to an existing SFI agreement, from summer 2024.
By the end of March, Defra has said it received 15,000 SFI applications.
The NFU’s Senior Countryside adviser Claire Robinson has also answered your top questions on how SFI 2023 will work. Read: SFI 2023 – your top 10 questions answered.
Key resources
- The Defra handbook for the Sustainable Farming Incentive scheme can be found at: GOV.UK | Sustainable Farming Incentive guidance.
- The RPA has produced a YouTube video on how to apply for SFI 2023.
- You can watch Defra’s webinars for livestock and grassland farmers and organic farmers, and arable and horticulture growers.
- Listen to Defra’s latest podcast on SFI where the NFU’s Senior Countryside adviser Claire Robinson talks to Defra Sustainable Farming Incentive lead Jonathan Marsden.
- The RPA also answers some common questions on SFI in its most recent podcast.
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
Farmers can apply for SFI through the Rural Payments Service online. The only time an expression of interest is required is for common land.
In January 2024, Defra announced that at least 16 new actions will be available in SFI and is exploring another 41 CS actions to be available in SFI. These include dry stone walls, more moorland activities, precision farming and no-till farming practices. The expectation is that these will be available to apply for from July for agreements starting in the autumn. Existing SFI agreements will be able to add new actions at their annual review point.
In June 2023 Defra published the handbook for the SFI. There is additional guidance on how to apply online. This also provides solutions to issues you may experience with the online process.
The Defra handbook for the Sustainable Farming Incentive scheme can be found at: GOV.UK | Sustainable Farming Incentive guidance.
Defra has published a video on how to apply online: SFI 2023 - How to apply for an SFI agreement (YouTube). Supporting written guidance is expected shortly.
The SFI offer and payments
You have free choice of which actions you take and how much you include in your SFI agreement. 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.
Below is a summary of the 23 actions you can be paid for under the SFI. In the SFI Handbook, the requirements for each are set out. There is supporting guidance, in the form of ‘how to’ guides.
The actions contribute to:
- Soil health – three actions
- Moorland management – one action
- Hedgerow management – three actions
- Integrated Pest Management (IPM) – four actions
- Nutrient management – three actions
- Arable and horticultural land – four actions
- Improved grassland – three actions
- Low input grasslands – two actions
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. This could be reviewed at the end of the year and could fall back to the original rate of £20/ha. This is based on option area. There is only one payment per SBI.
For common land (involving 2 or more people) these is an additional payment of £6.15/ha
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
Defra will combine the SFI and CS offer from the summer of 2024. This will allow applicants to select appropriate actions from both schemes. Actions will vary in length from three to five years. There will be a single online application for SFI and CS Mid Tier.
The full details of the combined offer have still to be worked through, along with the action requirements before the scheme can go live to applications.
Actions and payment rates
The January 2024 announcement increased some of the SFI payment rates, including SFI pilot payments. The announcement says these apply ‘from the start of the current SFI agreement year’ and they will be backdated to the start of the current agreement year. As SFI22 is closing, the payments have not been updated for these agreements.
Defra has also announced that new applicants will only be able to put 25% of their land into the following six actions:
- Flower-rich grass margins: IPM2
- Pollen and nectar flower mix: AHL1
- Winter bird food on arable and horticultural land: AHL2
- Grassy field corners and blocks: AHL3
- Improved grassland field corners or blocks out of management: IGL1
- Winter bird food on improved grassland: IGL2
The changes will not apply to SFI applications already submitted, agreements which have already been offered or existing SFI agreements.
Soil actions
SFI action |
Payment rate/ha |
| Test soil organic matter and produce a soil management plan | £6 /ha + £97 per agreement |
| Multi-species winter cover crops (arable) | £129/ha |
| Herbal leys (grassland) | £382/ha |
Moorland actions
SFI action |
Payment rate/ha |
| Assess moorland and produce a plan | £10.60/ha + £272 per agreement |
Hedgerow actions
SFI Action |
Payment rate/ha |
| Access and record hedgerow condition | £5/ 100m one side |
| Manage hedgerows so there's a range of heights and widths | £13/ 100m one side |
| An average of 1 tree per 100m | £10 per 100m – both sides |
IPM actions
SFI action |
Payment rate/ha |
| IPM (Integrated Pest Management) assessment and produce an IPM plan | £1129 per SBI |
| Flower-rich grass areas (arable) | £798 |
| Companion crop | £55/ha |
| No use of insecticide | £45/ha |
Nutrient Management actions
SFI action |
Payment rate |
| Nutrient Management assessment and plan | £652 per SBI |
| Legumes (improved grassland) growing during spring and early autumn | £102/ha |
| Legume Fallow (arable) that flowers during late spring and summer | £593/ha |
Arable and Horticultural Land actions
SFI action |
Payment rate/ha |
| Pollen and nectar flower mix – flowing spring/summer | £739 |
| Winter bird food (arable) | £853 |
| Grassy field corners and blocks (arable) | £590/ha |
| 4m-12m grass buffer strips on arable land | £515 |
Improved Grassland actions
SFI action |
Payment rate/ha |
| Grassy field corners and blocks (grassland) | £333/ha |
| Winter bird food (grassland) | £515 |
| 4m-12m grassy buffer strips on grassland | £235/ha |
Low Input Grassland actions
SFI action |
Payment rate/ha |
| Very low nutrient inputs | £151/ha |
Read our deep dives into the SFI options:
Eligibility
As a farmer, you need to be eligible for BPS in either May 2022 or May 2023. For common land, one of the people eligible to use the common must have been eligible for BPS in May 2022 or 2023. The NFU expects this to change in the summer, removing the link to BPS.
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 £6.15/ha where the common involves two or more people.
Agreement management
These are three-year agreements, 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. For agreements starting on 1 October 2023, 1 November 2023 and 1 December 2023 they will receive their first payment in the first month of their agreement. Then payments will revert to the original payment cycle, with the second payment falling in month seven of the agreement.
See: Defra promises ‘accelerated payment’ for SFI agreements
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.
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.
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.
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). Land in receipt of BPS payments can be included in SFI.
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.
SFI22 agreement holders
Defra has promised a smooth transition into the new offer. Agreement holders will need to apply for a new agreement to access the full flexibility and range of actions available in the new offer. If you want to access SFI22 early, before the end of the six-month termination period, then you need to register your interest with the RPA.
SFI23 does not include actions for adding organic matter, having 70% of your land with winter cover, or no more than 5% bare ground on grassland. Existing agreements will receive a closure payment recognising the reduced offer.
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