Sustainable Farming Incentive (SFI)

2021-08-16T10:49:56+01:00July 15th, 2021|

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Farming Investment Fund (Round 1)

DEFRA Lump Sum Exit Scheme & Delinking

This briefing note seeks to provide our clients with details of the Government’s proposed Sustainable Farming Incentive (SFI).  The DEFRA’S agricultural policy is evolving constantly under their Agricultural Transitional Plan and 25 Year Environmental Plan and over the course of the past few months more substantial details of the SFI have emerged.

 It is currently anticipated from spring 2022 all those who currently receive payment under the Basic Payment Scheme (BPS) will be able to apply for the SFI.  The Government want the SFI to “allow farmers to take a fresh look at the land they farm, the natural assets that they have and decide what will work best for their own individual holding. It will recognise the value of some of the natural assets that were dubbed ‘ineligible features’ by the CAP”.

SFI will be paid in addition to the BPS to provide an additional stream of income.  The SFI is based on the DEFRA’s principle of “public money for public goods” and will provide income in exchange for farmers managing land in an environmentally sustainable way and actions not otherwise financially supported in the market place.  The SFI will form one of the categories of the proposed Environmental Land Management Scheme (ELMS) which will eventually replace BPS and Countryside Stewardship by 2027.  The other categories of ELMS will be “Local Nature Recovery” and “Landscape Recovery”.  Details of these categories continue to emerge and we will keep you abreast of developments.  The SFI is likely to be the category most applicable to the majority of farmers.

Initially SFI will be based around 4 core standards, however more standards (as well as capital grant support to assist applicants meet the standards) are intended to be added when the final SFI is rolled out fully in 2024.  The anticipated additional standards of the SFI may include:

  • agroforestry standard
  • hedgerows standard
  • arable and horticulture land standard
  • waterbody buffering standard
  • improved grassland standard
  • low and no input grassland standard
  • farm woodland standard
  • dry stone walls standard
  • heritage standard
  • farmyard infrastructure standard
  • orchards and permanent crops standard
  • peat soils standard

The initial standards of the SFI will be:

  • Arable & Horticultural Soils
  • Improved Grassland Soils
  • Moorland & Rough Grazing
  • Annual Health & Welfare Review


Improved Grassland Soils


Introductory – £26/ha

Intermediate – £44/ha

Advance – £70/ha

Arable & Horticultural Soils


Introductory – £26/ha

Intermediate – £41/ha

Advance – £60/ha

Description (Improved Grassland Soils / Arable & Horticultural Soils)

To reward farmers and management practices that improve soil health by improving soil structure, organic matter and biology with a view to:

  • reducing levels of sediment, nutrient, pesticide, and chemical pollution in water
  • increasing ground and surface water resources
  • reducing flooding
  • reducing compaction, erosion, and run-off
  • reducing loss of water and organic matter
  • reducing greenhouse gas emissions
  • maintaining or enhancing carbon storage, water storage, and biodiversity

3 levels of ambition to choose from which have different actions and payment rates.

Moorland & Rough Grazing

Payment: Under development by DEFRA

Description (Moorland & Rough Grazing)

Offered as a single introductory level and require farmers to assess the range of the habitats and features present on moorland, identifying pressures and risks.

Annual Health & Welfare Review

Payments: £269 to £775

Description (Annual Health & Welfare Review)

Available for all commercial cattle, sheep and pigs and funds yearly visits from a vet to provide diagnostic testing and advice on improving animal health and welfare.

Whilst development of SFI continues, it is anticipated that the Government will announce the final payment levels and the details of each initial standard in November 2021 with applications beginning in Spring 2022 and payments before the end of 2022.