Sustainable Farming Incentive (SFI): are you ready?

With farming margins under pressure for many and the previous scheme closing without warning in March 2025, it’s important to stay on the front foot if you want to access available funding.

The SFI was designed to be an easy-to-access scheme that rewards the delivery of environmental outcomes. However, demand has been high, and the offer has been scaled back since its initial launch.

The application window for small farms (and those without an existing agri-environment agreement) opened in June 2026. The scheme is expected to open more widely in September 2026 (still limited to those with management control of the land). At a glance, the scheme now includes:

• 71 actions (down from 102)
• 3-year agreements
• £100,000 annual cap per farm
• Greater focus on higher-value environmental actions

To avoid missing out, make sure you are ready. If you need support, speak to your agent early and ensure the relevant information is in place. Although a “traffic light” style warning system is expected ahead of any closure, it’s important not to be caught out.

With agreements capped at three years, it’s essential to cost the options and understand the inputs required to deliver each action. Although SFI payments are received quarterly, the cash-flow implications should be planned. When modelling this, remember that payments are fixed, whereas input costs may rise with inflation or wider market forces.

Opportunity cost matters too. What are you giving up by entering the scheme? For example, do you need the output you would normally achieve from ryegrass compared with a herbal ley? What is the practical impact of reducing fertiliser, and how might that affect performance elsewhere on the farm? While SFI options can be a better fit for more marginal land, you just need to weigh it all up.

There was a lot of excitement about “stacking” SFI options alongside other schemes, such as the Countryside Stewardship Scheme (CSS) and Biodiversity net gain (BNG), but that may now apply to far fewer businesses. It’s also sensible to plan for the worst-case scenario that there may not be an equivalent scheme available at the end of your agreement, even though I hope there will be.

If you are currently in a scheme that works well for you, be cautious about assumptions for this next round. As the recent reopening showed, several well-used options have been scaled back, so any future offer may not be as rewarding as it has been previously.

Finally, although I’m an accountant and naturally drawn to the numbers, the wider impacts of entering into SFI also need to be considered. Does it improve soil health, strengthen rotations, or reduce inputs—and therefore reduce risk? These benefits can be just as important as the payment itself when you’re thinking about the long-term sustainability of the farm.