SFI relaunch risks ‘car crash’ as funding fears mount

Defra’s relaunched Sustainable Farming Incentive (SFI) risks becoming a “car crash” if demand for agreements outstrips the funding available, a former senior government adviser has warned.

Geoff Sansome, Natural England’s former head of agriculture, said the £240m budget for new SFI agreements may struggle to meet demand when applications reopen on 30 June.

Pressure is expected to intensify as an estimated 18,000 Countryside Stewardship Mid Tier, Higher Tier and existing SFI agreements are due to expire over the coming year.

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

The first SFI26 application window will be backed by £60m and limited to farms under 50ha and those not already participating in agri-environment schemes.

A second application window worth £180m will open in September to all eligible farmers in England.

The funding sits alongside £560m already committed this year to existing SFI agreements.

“It’s a bit of a car crash coming,” Mr Sansome told Farmers Weekly.

“There’s probably 20,000-25,000 English farmers who aren’t in any agri-environment scheme who will be eligible for the first tranche of payments. I can’t see that £60m being anywhere near enough.

“If the only option for those expiring agreements is the SFI capped at £100,000 per individual farm business with only £240m available, you’re setting up a scheme where demand could far exceed the available budget,” he said.

NFU disappointment

Industry leaders echoed concerns about a widening gap between ambition and funding.

NFU vice-president Robyn Munt said farmers needed confidence that environmental schemes would remain properly funded and accessible.

But she added: “It is becoming abundantly clear that there is a significant gap between government and farmers’ ambition for ELM [Environmental Land Management] and the funding to deliver it.”

Environmental organisations also warned that limited funding could undermine progress on environmental delivery.

RSPB head of sustainable land policy Alice Groom said the limited SFI budget and well over £400m worth of expiring agreements risked more land leaving environmental schemes than entering them, an “entirely avoidable” outcome of poor scheme design and budget management over previous years.

Lack of long-term clarity

Mr Sansome also raised concerns about the lack of long-term certainty for farm businesses.

“Farmers need to know what happens next,” he said.

“It is possible to model future agreement expiries, budgets and environmental outcomes, but instead the industry is being given short-term visibility.”

While the SFI still contains valuable options for both farm businesses and the environment, he warned that continued uncertainty could erode farmer confidence in agri-environment schemes.

“Defra must plan forward and give farmers longer-term clarity, otherwise the industry will walk away, and both food production and the environment will suffer,” he said.

He also questioned whether existing administration systems are equipped to manage the transition.

IT system concerns

According to Mr Sansome, the Rural Payments Agency’s IT infrastructure, originally designed for direct payments, continues to struggle with the flexibility required for more complex environmental schemes.

He said land parcels can become effectively “locked” within existing agreements, making it difficult for farmers to plan future applications.

“The functionality to predict that a field will come free for a future option has not been there so far. This has to be a key priority for the RPA to sort,” he said.

Mr Sansome argued that many of the current challenges stem from earlier policy decisions, including the abandonment of the original three-tier ELM design and the incorporation of increasingly complex actions within the SFI.

“We need to learn from the mistakes and successes of past schemes,” he said.

“We are now living with the consequences of that, with many of the predicted issues materialising today.”

Defra has been approached for comment.