Sustainable Farming Incentive 2024: What farmers need to know

Defra secretary Steve Barclay has announced what he claims to be the biggest upgrade to UK farming schemes since Brexit.

The Sustainable Farming Incentive (SFI), the first component of Environmental Land Management (ELM), which rewards farmers in England for farming practices that help produce food sustainably and protect the environment, has been given a massive upgrade for 2024.

The updates, unveiled by Mr Barclay at last week’s Oxford Farming Conference, include increased payments for farmers, about 50 new actions, 50 updates to existing actions, and 21 “premium payments” for actions that have the biggest environmental impact.

See also: Hill farmers still ‘shortchanged’ by latest Defra offer

Defra says there will be a 10% increase in average payment rates to the SFI and Countryside Stewardship (CS) schemes, including existing agreements, but this will not apply to everything.

Some options will see big increases, while others will see no change at all or even shrink.

For example, the Farm Wildlife and Habitats on Grassland action IGL2 (winter bird food on improved grassland) has increased to £515/ha a year from £474/ha a year.

However, the native breed at risk supplement falls from £167/ha to £92/ha or £146/ha, depending on livestock numbers.

Farming organisations including the NFU, Country Land and Business Association and National Sheep Association have welcomed the increased payment rates and the variety of new actions on offer.

Summer launch

But they have raised concerns that the SFI 2024 application window will not open until the summer, with an announcement expected by Defra either at the Cereals Event or Groundswell in June.

With farm businesses facing reductions of at least 50% in their Basic Payment Scheme (BPS) payments this December compared with historic rates, there is widespread concern that the slow SFI rollout will hamper farmers’ ability to recoup lost income.

The Nature Friendly Farming Network UK says it is imperative that all eligible farmers apply for the SFI as soon as the window opens this summer – or they may face not receiving payments this year.

Those who have not yet submitted claims under SFI 2023 should do so without delay, it advises.

The new offer will continue to operate on a “pick and mix” basis and farmers with SFI 2023 agreements will be able to add SFI 2024 and CS options when these become available.

The requirement to be “BPS eligible” in order to apply for the SFI will be removed in the summer.

The SFI management payment of £20/ha, for the first 50ha entered into agreement, will remain in place for 2024. But Defra will review this offer from 2025 onwards.

What’s new

Much of the detail about the updated SFI offer will not be announced until the summer. However, several key changes have been revealed.

Farmers and landowners can be paid for taking a range of actions under the Defra scheme, including actions to improve soil health or provide nesting and foraging habitats for farmland wildlife.

The government says it has listened to feedback and introduced more “maintenance” actions, alongside improving existing actions, to reward farmers who are already protecting the environment, for example through maintaining grasslands, wetlands and scrub.

Farmers will also be paid more for existing actions to maintain habitats, for example with payments for CS option GS6: Management of species-rich grassland, rising from £182/ha to £646/ha.

The new SFI 2024 includes an expanded offer for grassland and moorland farmers. “Low” grazing levels will pay between £20/ha and £66/ha, depending on stocking density.

If moorland is grazed with a certain proportion of cattle or ponies, there will be a supplementary payment of up to £23/ha.

There will be additional payments of up to £50/ha to remove livestock from moorland at certain times of the year to avoid potential damage to sensitive habitats. The current Higher Tier CS option remains at £55/ha.

For upland farmers, the CS payment for rough grazing for birds remains at £121/ha.

Low-input grassland management in the SFI, at £151/ha, is now likely to be the default choice for rough pastures, as it is less restrictive and pays more.

There will be a new action for maintenance of dry stone walls, which pays £27 per 100m and will help farmers to maintain these vital features of the upland landscape.

New payments for public access to farmland, which have not been available since 2015, are being introduced.

Open access will attract a payment of £92/ha, while the creation of permissive footpaths will pay £77 per 100m and bridleways £158 per 100m.

Precision farming actions

For the first time, Defra will introduce payments for precision farming actions over three years, including robotic mechanical weeding (£150/ha a year), variable rate application of nutrients (£27/ha a year), and a no-till payment (£72/ha a year).

To improve soil health, alongside existing payments for winter cover crops (£129/ha), there will be a new action for multispecies spring, summer or autumn cover crops, paying £153-£163/ha each year under a three-year agreement.

There is a bigger offer for agroforestry, which involves integrating trees into food-producing businesses to help animal health and welfare and improve water resilience.

Woodland improvement increases to £127/ha, and a new supplement for the management of native woodlands will pay an additional £116/ha, bringing the total payment to £243/ha – a big increase on the current rate of £100/ha.

Other new woodland supplements will include management to improve structure and management of historic features in woodland.

New agroforestry actions, under which trees are planted in and around crops and pastureland, will pay between £248/ha and £849/ha, depending on the density of planting.

Premium payments

Defra has introduced premium payment rates for 21 “high priority” actions for 2024. This expanded package mainly focuses on improving water quality alongside species recovery and achieving net zero.

The list includes £765/ha for lapwing nesting plots and £1,242/ha for connecting river and floodplain habitats.

Responding to recommendations in Baroness Kate Rock’s 2022 report, a number of actions will be offered under three-year rather than five-year agreements to allow tenant farmers, who manage about a third of English farmland, more flexibility to access the scheme.

Food production fears

The NFU has raised concerns that the expanded SFI offer will not be “competitive or compatible” with productive farming.

The union has pointed out that many of the higher-paying options for arable farmers involve taking land out of production.

But Defra insists many actions within the SFI are about supporting sustainable food production, and its overall commitment is to help farmers to produce at least 60% of the food consumed in this country.

For example, there is some good evidence from research by the UK Centre for Ecology and Hydrology that taking some land out for flower-rich field margins can be helpful in promoting natural predators which then feed on crop pests.

Even accounting for land taken out of production, research shows this can have a net yield benefit as well as allowing reduced pesticide use.

Other SFI changes

Under previous agri-environment schemes under the Common Agricultural Policy, farmers faced penalties if they got things wrong.

But Defra is moving away from penalising mistakes and will instead offer advice to put things right.

Farmers can add more actions to their SFI agreements year on year, but they cannot remove options from their existing agreements.

They can, however, make a separate application for actions to run alongside their current agreements.

Single application process for SFI and CS Mid Tier

From this summer, the Sustainable Farming Incentive (SFI) and Countryside Stewardship (CS) Mid Tier schemes will effectively be combined, with a single application process and a rolling application window for both schemes.

Farmers will be paid each quarter rather than each year to reduce pressure on cashflow.

There will be a separate application process for CS Higher Tier, which requires more local and tailored advice.

Defra has set an internal target of doubling the number of farmers with CS Higher Tier agreements by 2025, which it says is really important for certain species’ recovery targets.

To date, about 8,000 farmers have applied to SFI 2023 and there has been a 94% increase in CS agreements since 2020.

More than 39,000 farmers in England now have some sort of agri-environment agreement.

This adds to the more than 50 Landscape Recovery projects (the third component of ELM) which aim to deliver large-scale environmental benefits around the country.  

Due to the complexity of the schemes, farmers and landowners may wish to take expert advice to ensure the best match for their farming systems.

Defra has produced a list of organisations offering advice across different counties.

Industry reacts to SFI expansion

David Exwood, vice-president, NFU

“It is imperative that SFI has sustainable food production at its core, with enough options that sit around productive farming.

“For this to happen, it is absolutely vital that there’s a better balance between policies that focus on enhancing food production as well as the environment.”

Martin Lines, chief executive, Nature Friendly Farming Network UK

“We welcome this significant expansion of opportunities to deliver nature-friendly farming.

“It is a step forward in building the resilience and functionality of our landscapes in order to deliver improved food security.”

Victoria Vyvyan, president, Country Land and Business Association

“There is a lot to like about SFI 2024. The increased payment rates and the variety of new actions show that the voice of the CLA has been heard.

“However, we are very concerned that farmers will have to wait until this summer, at the earliest, before the application window opens.”

George Dunn, chief executive, Tenant Farmers Association

“The Rural Payments Agency needs to be better geared up for providing bespoke advice to individuals looking to make an application to SFI in the coming months.”

Phil Stocker, chief executive, National Sheep Association

“The National Sheep Association welcomes the uplift in SFI and CS payment rates and also the expanded offers for grassland and moorland options and new agroforestry actions that can work alongside grazing animals.”

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