An update for landowners on the Sustainable Farming Incentive

We recently published a guide for landowners on accessing funding through Environmental Land Management Schemes (ELMS). One of those schemes is the Sustainable Farming Incentive (SFI) which provides landowners with funding if they agree to take certain actions for the benefit of the environment and wildlife on their land. SFI agreements last for three years and there are several 'actions' which landowners can choose from.

SFI agreements are undoubtedly good for the environment and provide an alternative income steam for farmers after the phasing out of the Basic Payment Scheme (BPS), however, there has been some concern about how these incentives would fit alongside food production. Whilst environmental targets are high up on the government agenda, food security is obviously extremely important for the nation. The government wishes to retain current levels of food production with at least 60% of the food we consume being produced in the UK.

The government announcement and actions

On 25 March 2024, the government announced new measures to try and strike a balance between the environment and food production. Under the changes, SFI applicants will only be able to put 25% of their land into six SFI actions that take land out of direct food production.

The actions are:  

  • Flower-rich grass margins  
  • Pollen and nectar flower mix  
  • Winter bird food on arable and horticultural land  
  • Grassy field corners and blocks  
  • Improved grassland field corners or blocks out of management  
  • Winter bird food on improved grassland.  

It will not apply to SFI applications already submitted, agreements which have already been offered or existing SFI agreements but from 26 March 2024, applications will not be accepted where the amount of land entered into any combination of these six actions is above 25% of the farm's total land.

The expected impact

The Rural Payments Agency has received over 15,000 applications for SFI to date. Most of the land in the scheme continues to produce food and it is hoped that SFI payments will simply support farmers to continue doing this in a way that will also bring about improvements for the environment. It is expected that SFI will still help to act as a buffer against challenging market and weather conditions by giving farmers the option to enter the least productive areas of their land into the scheme and provide a higher chance of guaranteed income.

Other changes announced include a new annual UK-wide Food Security Index to capture and present the data needed to monitor levels of food security.

If you are interested in learning more about this topic or other matters concerning rural land, please contact our team of experts, listen to our podcast, Experts in the Field or visit our Farms, Estates & Rural Land web page.