Sustainable Farming Incentive (SFI) 2023

On 21^st June 2023, DEFRA formally launched the 2023 Sustainable Farming Incentive (SFI) for England. Farmers and Land Managers will be able to apply for 23 standalone actions from August. The 2023 SFI offering includes payments for soil management, hedgerows, integrated pest management, nutrient management, moorland, farm wildlife and low input grasslands. 

This announcement is heralded by DEFRA as a major step forward in the Government’s plan to deliver nature recovery under the Environments Improvement Plan. Land Managers will benefit from what is described as a “pick and mix structure” of subsidy options to fit their own farming/land management systems. 

Payment rates are broadly in line with options available under Countryside Stewardship Schemes (CSS), but unlike CSS, the Agreements are relatively short term (three years), do not require Landlord’s consent, and the scheme is not competitive. 

The application process is designed to be much more simple with a smart online application tool. This will only show applicants the options available to them on their land. Applications will start to be accepted online throughout a controlled rollout period at the beginning of August. This will be followed by a rolling application window which will allow Farmers/Land Managers to apply at any time.

The 2022 SFI is now closed to applications and Land Managers who signed up for SFI in 2022 will be able to transfer to the 2023 offer. Details of how this transition will work are not yet available but we are told that these early adopters will be treated fairly in this process and it will happen in a streamlined manner.

We understand that DEFRA has indicated that it is exploring new actions which will be added to the SFI scheme in 2024. These include dry stone walling, agri-forestry, additional moorland activities, precision farming and tillage practices. Each year it will be possible to increase the amount of land and options entered into an individual scheme. However, the removal of land and actions will not normally be allowed. 

Payments will be made quarterly, starting in the fourth month after the Agreement starts. Agreement holders will be required to complete an annual declaration confirming that all of the relevant actions have been completed. This declaration will need to be completed in the final quarter of the payment year. 

SFI is compatible with other schemes, however you must not be paid for the same action twice (known as double funding). The online Rural Payment service application system will calculate the available area for each SFI action and will remove areas with incompatible options or actions. As we understand it, land attracting private finance such as peatland, carbon or natural flood management payments, can be entered into SFI. 

There are substantial opportunities for Farmers, Land Managers and Sporting Estates to generate additional income from SFI. However, understanding the complexities of the options entered into, along with a careful assessment of the impact the scheme could have on the existing farming/sporting and owners’ aspirations is very important to understand.

A summary of the SFI actions and the 2023

Article written by: Will Robinson – JM Osborne Rural & Sporting