SFI26 Window 2: Two-thirds of eligible farms could miss out

Tens of thousands of farmers in England could miss out on Sustainable Farming Incentive (SFI) funding when Window 2 opens next Tuesday (22 September).

Fresh analysis suggests the £230m funding pot could support only about 15,000 agreements – potentially leaving up to two-thirds of farmers without funding if demand reaches 40,000 applicants.   

Unlike the first round, which targeted small farms and those without existing SFI agreements, Window 2 opens to all eligible farmers and land managers, including existing holders.

See also: SFI 2026 options that support resilience on farm

Defra has confirmed the window will close once the budget is exhausted.

The £230m budget for Window 2 includes an extra £50m in drought support, alongside any unallocated Window 1 funds.

New analysis from farm software platform Soil Benchmark suggests as many as 40,000 farm businesses could seek funding through Window 2.

“If our estimates are borne out, roughly two-thirds of potential applicants could miss out,” said Tom Scrope, co-founder of Soil Benchmark.

The calculation assumes the full £230m is allocated to agreements and that average agreement values are about £15,000.

How Defra deals with demand exceeding the available budget remains unclear.

Reduced rates

To stretch the budget, Defra has removed the management payment, scrapped planning actions and slashed rates for popular actions like herbal leys, winter bird food and legume fallow.

Mr Scrope estimates these cuts will reduce average agreement sizes from £21,000 for SFI23 and SFI24 down to roughly £15,000 for SFI Window 2 – leaving enough funding for just 15,000 agreements.

Even after excluding the 6,900 Window 1 applicants and the roughly 25,000 farmers in SFI23 or SFI24 agreements that run beyond February 2027, more than 40,000 farm businesses could still be seeking funding through Window 2.

Richard King, partner and head of business research at Andersons, warns the application process risks becoming a “mad scramble, much like the rush for Oasis tickets”.

“We know that all the agents are poised with their fingers over the submit button. It will be interesting to see whether the IT computer system will be able to cope,” he added.

Mr King urged farmers to prepare immediately. “Make sure your land is registered correctly with the RPA [Rural Payment Agency], you’ve got the right codes and that the application is ready to go,” he said.

With many farms facing a severe cashflow crisis, the NFU says all eligible businesses must be able to access SFI26 funding this autumn.

NFU vice-president Robyn Munt said: “We recognise that budgetary pressures may constrain access to Window 2, but farm businesses willing to deliver environmental outcomes must not be left without a clear path forward.”

The NFU is also calling on Defra to provide further details on SFI27 and access to the Countryside Stewardship Higher Tier scheme, giving farmers “the certainty they need to invest in resilient businesses and continue delivering environmental benefits beyond next year”.

SFI ‘bun fight’

Shadow Defra secretary Victoria Atkins added: “The popularity of SFI in Window 1 shows how badly farmers needed the scheme. I’m afraid Window 2 is going to be a bun fight.

“It is also strange that agreements are capped at £100,000 per individual farm business. I struggle to see how the government can meet its own nature recovery and conservation targets in the years ahead.”

Defra said strong demand for SFI26 Window 1 funding demonstrated farmers’ appetite for a scheme that supports food production and sustainable land management, with a second application window opening on 22 September.