Opinion: New SFI means more risk and more cost for farmers
© GNP The announcement of the 2026 Sustainable Farming Incentive has been met with a largely positive response, with the overwhelming feeling one of relief.
It is unbelievable that our expectations have fallen so low that an announcement detailing lower payments, fewer options and a new £100,000 payment cap is now seen as good news.
See also: Opinion – ‘disappointment, pessimism and distrust’ on ag policy
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It feels like Defra went through SFI with a fine-tooth comb looking for any excuse to reduce costs.
Many had been expecting a reduction of field-scale options such as winter bird food and legume fallow, but to see options like maintaining hedgerow trees and producing an integrated pest management plan removed completely is very disappointing.
The “easy wins” in the previous scheme are now gone.
Where the advice in the past had been: “Why not apply? You’re doing this stuff anyway”, it now takes much more careful consideration on whether it is worth the hassle.
For the options that remain, payments are still based on income foregone plus costs, leaving no profit for the farmer and therefore little incentive to increase participation.
Payment rates have failed to increase with inflation, despite costs increasing.
The motivation behind the £100,000 cap was an opinion that it was unfair for 25% of the money to go to only 4% of farmers.
But the farmers with the most land are the most important participants in the scheme as they have the greatest potential to deliver environmental gain.
They will now have no motivation to do anything once the new cap is reached and will be incentivised to revert established habitats back to production.
From a farmer’s point of view, we have to do more work, carry more risk and spend more money than in the days of BPS, and in return we get less reward
A cap per hectare, averaged across a whole farm, would have been a better and fairer way forward.
The rotational actions have also been changed by removing the option to increase the area after the first year.
This is frustrating as the nature of a rotation means the area won’t be the same year-on-year. It will result in farmers doing the work over a larger area and not being paid for it.
An ability to increase the area, even just by 10%, would make a big difference here.
Despite all the flaws of the scheme, it’s likely that more farmers will sign up as those who missed out the first time make sure they don’t miss out again.
The government will claim its changes to be a success, but a smaller total area of land is likely to be managed under the scheme, so fewer public goods will be delivered and there will be less benefit to the environment.
It is easy to imagine successive governments continuing to squeeze the SFI budget and there is a risk that over time it stops delivering for the environment and pressure comes to scrap it altogether.
When England moved away from the Basic Payment Scheme and began developing the SFI, there really was potential for a world-leading scheme.
The problem has always been that to develop successfully, SFI needed far more funding than the agricultural budget ever allowed.
A too-large proportion of that money was used in developing and administering the scheme, and a too-small proportion reached the farmer.
From a farmer’s point of view, we have to do more work, carry more risk and spend more money than in the days of BPS, and in return we get less reward.
This was never going to be a recipe for success.