£240m for new SFI scheme ‘insufficient’ says NFU

The NFU is warning that the £240m being made available by Defra for the new Sustainable Farming Incentive (SFI) in England is likely to run out quickly, leaving many producers in limbo.

The first window for SFI26 is set to open on 30 June and Defra has revealed that £60m of the £240m pot will be targeted at those applicants who have less than 50ha or are joining an Environmental Land Management (ELM) revenue scheme for the first time.

See also: What SFI26 offer means for farm businesses

The remaining £180m will be reserved for other applicants, who will get the opportunity to join SFI26 from September onwards – though Defra has added that should there be any unspent funds from the first window, they will be reallocated to the second window.

The £240m total funding pot will add to the £560m already committed, said a Defra statement, adding that a further £50m will be targeted at new Countryside Stewardship Higher Tier agreements this year.

Defra secretary Emma Reynolds said: “Under the previous SFI, a quarter of funding went to just 4% of farms, so we have redesigned it to be simpler and fairer, helping more farms grow, boost productivity and protect the natural environment they depend on.”

‘Insufficient’

While acknowledging that the SFI26 budget announcement provided some clarity, NFU vice-president Robyn Munt said the amount of money was insufficient to enable farmers to deliver on the government’s environmental ambitions.

The NFU has previously estimated that around £4bn/year would be needed to meet the government’s statutory targets, compared with the current £2.5bn annual budget for England.

“It is becoming abundantly clear that there is a significant gap between government and farmers’ ambition for ELMs and the funding to deliver it,” said Ms Munt.

She also pointed to growing concerns that, with over 13,000 Countryside Stewardship Mid-Tier agreements ending in December, the budget won’t stretch far enough to help those farmers move into SFI26.

“These are farmers who have spent years investing in hedgerows, looking after our waterways and creating habitats,” she said. “This contract with government must not be broken at such a critical time.”

IT restrictions

It is also understood there are IT restrictions at the Rural Payments Agency, which means farmers currently signed up to Mid-Tier agreements are unable to apply for SFI26 in advance of their existing agreements ending.

In its statement, Defra has confirmed  that it is trying to resolve this.

“The government is building new functionality into the SFI26 application service that will let these farmers apply for land currently in these expiring agreements before they end,” it said.

“The government expects this to be available from the start of Window 2 in September 2026.”

Country Land and Business Association deputy president Joe Evans said: “It is particularly important that farmers with agreements ending later this year are able to transition seamlessly into new agreements.

“With funding capped and application windows limited, there is a risk that some businesses will miss out, creating uncertainty at a crucial time.