Sustainable Farming Incentive (SFI)

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Sustainable Farming Incentive and Countryside Stewardship

With annual deadlines for the Mid-Tier Countryside Stewardship (CSS) and the new Sustainable Farming Incentive (SFI) now open, we look at the changing landscape for agricultural support in England and how farm businesses can get the best from the new system of payments.

The Basic Payment Scheme is being reduced year-on-year before it is eventually withdrawn completely by 2028 therefore farmers will need to look for alternative income streams to fill this gap.

Two options are the SFI and CSS.

Sustainable Farming Incentive Offer

Defra has announced reforms to what had been set out in its fledgling Environment Land Management (ELM) scheme, scrapping highly prescriptive standards that required a rigid set of multiple actions and opting instead for a more flexible “pick and mix” approach, designed to appeal to all farmers and land managers. 

By Summer 2024 there will be over 50 paid actions across multiple SFI standards, which provide access to the £2.4 billion of government funds specifically designated to support the agriculture industry in England. 

According to Defra, these new provisions will help to ensure food security and quality as well as protect soil health.

The SFI Offer, which is open for applications, promises to deliver a package that is both attractive and workable for farmers. 

The scheme includes set plans suitable for whole farm blocks as well as part-parcel plots and whole parcel prescriptions; these can all be broken down into rotational and non-rotational actions. 

The new standards and actions incorporate some of the options previously seen in CSS.  

Going forward there will be a single application platform, incorporating both SFI and CSS options, which will become the baseline scheme providing farm subsidy in the UK. 

What is also known is that the scheme now in place is not in its final form as up to 50 additional actions are expected to be added by the end of 2024.

What next for Countryside Stewardship?

This is the last year for CSS Mid-Tier and Higher-Tier applications; the current offers and existing agreements for these are expected to become a single SFI agreement or a combination of SFI and CSS Plus. 

Whilst the deadline for Higher-Tier applications remains in April, the deadline for Mid-Tier applications was 15th September 2023, and is expected to reopen in the Spring.

CSS is a five-year agreement compared to three years for SFI, which rules out the possibility of a coterminous agreement at present. 

A three-year agreement can be considered more favourable as it eases management decisions when planning rotations around actions, this could also benefit tenant farmers where five-year schemes were considered ‘too long’ for some tenancy agreements.

One of the key benefits of SFI is the quarterly payment structure as this improves cashflow; once an agreement for SFI has been accepted, the first payment will be made four months after the agreement start date and will be paid quarterly thereafter. This is a significant improvement on previous delivery of funds, where payments for BPS/CSS were made annually and were often late. There is also an expectation that payment rates will increase in the future in line with inflationary pressures in the industry.

CSS has a great many capital items available to all farmers, whether they have an agreement or not. For example, funding is available for the development of infrastructure, fencing, livestock management items, sprayer filling facilities and more. Defra has indicated that capital items, schemes and grants will all be considered as part of a ‘farm subsidy package’ that is available for farmers actively engaging with the offers.

Sustainable Farming Incentive summary

SFI is becoming a key source of agricultural funding in England and an appealing prospect due to its flexibility, regular payments and a growing list of actions that fit into most farm management practices. 

However, CSS still has plenty to offer and should be taken into consideration for those looking to maximise earning potential. It provides access to options that SFI does not yet cover and ones that may not be available in the future. In 2024there will be the opportunity to apply for SFI and CSS in a single application, making up 185 actions.

These include payments for historic farm buildings, in-field grass strips, enhanced over winter stubble (fallow) and woodland management. 

Another benefit of utilising both schemes is the ability to stack options and actions if they are compatible, provided that farmers are not being paid for the same action twice, known as double funding.

The SFI is not expected to replace BPS on its own, however there is the opportunity to access funds through use of these schemes as well as grant funding that will go a long way to replacing the loss of income felt by farmers. In certain circumstances it will surpass what was receivable as BPS.

For any questions or queries regarding the SFI or CSS please do not hesitate to get in touch.

SFI Offer Actions

Code	SFI Action	Annual Payment	CSS Option
Soils Standard
SAM1	Assess soil, test soil organic matter and produce a soil management plan	£6.00 per hectare and an additional payment of £97 per agreement	-
SAM2	Multi-species winter cover crops	£129 per hectare	-
SAM3	Herbal leys	£382 per hectare	GS4
Moorland Standard
MOR1	Assess moorland and produce a written record	£10.60 per hectare and an additional payment of £265 per agreement	-
Hedgerows Standard
HRW1	Assess and record hedgerow condition	£5 per 100 metres - one side	-
HRW2	Manage hedgerows	£13 per 100 metres - one side	BE3
HRW3	Maintain or establish hedgerow trees	£10 per 100 metres- both sides	-
Integrated Pest Management Standard
IPM1	Assess integrated pest management and produce a plan (this action applies to an SFI agreement, rather than a specific area of land (an 'agreement level SFI action'))	£1,129 per year	-
IMP2	Flower-rich grass margins, blocks, or in-field strips	£798 per hectare	AB8
IMP3	Companion crop on arable and horticultural land	£55 per hectare	-
IMP4	No use of insecticide on arable crops and pernament crops	£45 per hectare	-
Nutrient Management Standard
NUM1	Assess nutrient management and produce a review report (agreement level SFI action)	£652 per year	-
NUM2	Legumes on improved grassland	£102 per hectare	-
NUM3	Legume fallow	£593 per hectare	AB15
Arable and Horticultural Land Standard
AHL1	Pollen and nectar flower mix	£739 per hectare	AB1
AHL2	Winter bird food on arable and horticultural land	£853 per hectare	AB9
AHL3	Grassy field corners and blocks	£590 per hectare	-
AHL4	4m to 12m grass buffer strip on arable and horticultural land	£515 per hectare	SW1
Improved Grassland Standard
IGL1	Take improved grassland field corners or blocks out of management	£333 per hectare	GS1
IGL2	Winter bird food on improved grassland	£515 per hectare	-
IGL3	4m to 12m grass buffer strip on improved grassland	£235 per hectare	SW2
Low Input Grassland Standard
LIG1	Manage grassland with very low nutrient inputs (outside SDAs)	£151 per hectare	GS2 / GS5
LIG2	Manage grassland with very low nutrient inputs (SDAs)	£151 per hectare	GS2 / GS5
ADDITIONAL PAYMENTS
Additional common land payment (*if a group of 2 or more people apply for an SFI aggreement on common land)		£6.15 per hectare
SFI management payment (* up to the first 50 hectares entered into the relevant SFI actions, per SBI)		£20 per hectare

 

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