The Sustainable Farming Incentive: what’s changed?
NRM
Agriculture
Environment
In June 2023, Defra announced the new 2023 Sustainable Farming Incentive (SFI) offer.
The introduction of the SFI schemes will replace the Basic Payment Scheme (BPS) system, which is being phased out by 2027. The new scheme gives an opportunity for government to reward farmers for producing food in a more sustainable way alongside environment goods and services.
Since its launch, the SFI scheme has undergone significant improvements. Previously, actions were grouped into standards, and all actions within a standard had to be completed to receive payment. In the updated scheme you have the freedom to choose which actions to include in your agreement.
The early SFI rollout and pilot scheme that launched in 2022 allowed Defra to work with farmers like you to test the standards and contribute to a co-design approach, with the aim of improving the scheme over time. The 2023 improved offer is partly an output of that process and, whilst applications for SFI are temporarily closed, the new and expanded offer will be open for a controlled rollout from August. This blog aims to summarise the details outlined in the SFI handbook and highlights how the SFI can provide an income whilst supporting the environment and productivity in a sustainable way.
Freedom to mix and match
One issue with the 2022 standards was the lack of flexibility it offered. The 2022 standards restricted the number of new actions which could be carried out on the same area of land, whilst the 2023 SFI allows multiple actions to be taken on the same parcel of land. Defra has confirmed that those with existing SFI 2022 agreements can also fully benefit from the improvements made to the new offer and will write to existing 2022 agreement holders to explain how.
The feedback from many farmers involved in the 2022 SFI pilot was all about picking and mixing options and having the freedom to decide which parcels of land to apply those options to. This flexibility extends to parcels of land under other environmental land management options such as countryside stewardship. Essentially, multiple options can be applied to either the same area of land or a different area but within the same land parcel, and there is no minimum land area requirement.
Introduction of new schemes
Defra has been busy so far this year! The department has also introduced three additional scheme options and bought forward many actions that were planned for 2024.
There are a total of 23 actions available, covering various aspects such as soil health, moorland assessment, hedgerows, integrated pest management, nutrient management, farmland wildlife, buffer strips, and low input grassland.
The aim is that a more diverse, wide ranging list of land/crop management options will help meet the ambitious target of a more sustainable food system in the space of challenging environmental and climatic conditions. Moreover, you can add additional actions and eligible land to your agreement each year. Payment will be received every three months as actions are completed.
New payment options
A new SFI management payment has also been introduced to all land based SFI options. Defra has recognised that there’s an initial cost to entering the SFI. To facilitate some of the costs, an annual management payment of £20/ha is offered for up to 50 hectares of land entered into the scheme, with a total cap of £1,000. The payment rate for low input grassland in the uplands and lowlands is now the same.
Many of the new SFI options are there to help reduce input costs, such as nutrient management and integrated pest management options. It’s all about optimising, increasing efficiencies and, therefore, lowering reliance on inputs to produce our food and reducing the risk to the natural systems we rely on.
New actions for soils and moorland standard
New actions for the ‘soils and moorland standard’ have been introduced and will replace the original actions in the SFI 2022 standards for soils and moorland.
The three grouped actions covered in the 2022 SFI soils standard (additions of organic matter, single species winter cover, and minimising bare ground) will not be available in the 2023 offer. The reason for this is that the benefits are not realised unless they are grouped together with other actions and completed on a required percentage of land. As standalone pick and mix actions, the benefits are minimal.
The new SFI does include mandatory requirements which often change depending on the action(s) you have decided to take. Some of the actions are categorised as being static or rotational. Rotational means that you can move some actions around the land area during the agreement, whilst others are static actions which must be done on the same parcels of land within each year of the agreement. However, you can now choose which action to take on areas of eligible land or hedgerow as Defra will no longer insist on particular action combinations.
When digging into the detail of each action, we can see that it’s possible to have both a Countryside Stewardship (CS) or Environmental Stewardship (ES) agreement and an SFI agreement simultaneously, allowing you to combine SFI actions with other scheme options. However, it is not possible to be paid twice for carrying out the same action on the same piece of land.
| Introduced 2022 | 1-Introductory level Actions | SFI Actions 2023 | 2Actions – Summarised |
| Arable & Horticultural Soils Standard | Soil assessment: across 20% of land in agreement per year. Measure SOM along with standard nutrient analysis. Assess biological indicators and review soil structure. | 3Soils | Soil assessment: test for soil organic matter and produce a soil management plan. Multi-species winter cover crops. Herbal leys. |
| Arable & Horticultural Land Standard | Provide resources for wildlife, alleviate compaction, follow an NMP, in-field buffers around trees, introduce a mosaic of habitats, use precision applicators, encourage natural predators for pest management. | Nutrient management standard | Assess and review nutrient management and produce a review report. Legumes on improved grassland. Legume fallow. |
| Improved Grassland Soils | Soil assessment: across 20% of land in agreement per year, measure SOM along with standard nutrient analysis, alleviate compaction, maintain include diverse swards, manage soil erosion risk by livestock & permanent pasture. | Integrated pest management standard | Assess integrated pest management and produce a plan. Flower-rich grass margins, blocks, or in-field strips. Companion crop on arable and horticultural land. No use of insecticide on arable crops and permanent crops. |
| Improved Grassland land standard | Better management of grazing land and historical features within grassland, leave field margins uncut, in-field buffers around trees, follow an NMP, introduce a mosaic of grass/scrub habitats. | Low/no input grassland standard | Manage grassland with very low nutrient inputs (outside 3SDAs). Manage grassland with very low nutrient inputs. |
| Moorland | Survey the soil, vegetation, historic and archaeological features. Identify public goods the moorland provides. Identify opportunities to maintain or enhance the public goods your moorland provides. | Hedgerow standard | Assess and record hedgerow condition. Manage hedgerows. Maintain or establish hedgerow trees. |
| 4Moorland | Identify, assess, and record the soil, vegetation, historic and archaeological features across the moorland area. | ||
| Farmland wildlife on improved grassland | Take grassland field corners or blocks out of management. Winter bird food on improved grassland | ||
| Farmland wildlife on arable and horticultural land | Pollen and nectar flower mix. Winter bird food on arable and horticultural land. Grassy field corners and blocks. | ||
| Buffer strips | Establish and maintain a 4m to 12m grass buffer strip on arable and horticultural land. Establish and maintain a 4m to 12m grass buffer strip on improved grassland. | ||
Summary of actions
Table 1: Summary of SFI actions
1 – The complexity of actions increases if you sign up to intermediary or advanced agreements. Summarised is the introductory level. Click here to check what actions are involved at the intermediary or advanced level.
2 – Click here for the full explanation of all of the 2023 SFI options.
3 – The new SFI 2023 soil agreement replaces the 2022 SFI agreement for grassland soils and arable and horticultural soils.
4 – the new moorland agreement combines the actions specified in the 2022 SFI standard.
Focus on soils in SFI actions
The SFI actions for soils are designed to improve soil health, structure, organic matter, and biological function. By completing an initial soil management plan and testing the organic matter content, you can identify areas of land where the soil is at risk of functional decline, and therefore needs to be managed differently.
NRM assesses organic matter content to help you establish a baseline and identify a new, optimal direction of travel. Defra doesn’t specify which analytical method should be used, but we recommend choosing one method at one lab and sticking to them to clearly assess progress over time.
The other two SFI actions for soils are the establishment of either multi-species winter cropping or herbal leys. The thinking behind these options is simply that variety above ground equals variety below ground. This diversity leads to more resilient soils that support long term productivity, improving water quality and protection against the changing climate. Understanding the condition of your soils leads to effective planning.
Focus on nutrient management planning
Supporting farmers to better use nutrients from organic sources has been recognised as an option in the new offer. The SFI will now pay for a FACTS Qualified Adviser (FA) to visit the farm, review how nutrients are used, and provide guidance on where improvements can be made.
Better nutrient use starts with routine soil analysis, spring soil nitrogen measurements, and a better understanding of the nutrients contained in livestock and organic manures. Without these fundamentals, nutrients can’t be managed in a cost effective and environmentally sensitive way. By taking advantage of independent advice, nutrient use efficiency on every farm can be increased. NRM has the expertise required to provide the data and insights to help support these management decisions.
Other support
There’s good news for tenant farmers. If that’s you, the new scheme means that you don’t need permission from your landlord, and even if you farm land which is on a shorter rolling tenancy contract, you can still participate.
The application process is presented as being clear and straightforward for first time applicants. If land meets the eligibility criteria and the actions selected are compatible, you will be granted an agreement. It’s as simple as that, and there is no competition involved.
The agreement will come into effect starting from the month after it is accepted. A controlled rollout will begin for scheme application from August, and those interested should contact the RPA, who will guide them through the next steps and assist in the application process. Initially, applications will be managed in a controlled manner to ensure that everyone receives the necessary support and services required.
How NRM can help
NRM offers expert analytical services to help you meet the scheme obligations, such as testing soil organic matter to help you understand the characteristics of your soil for better management. Considering local agronomic and environmental conditions will help determine the most effective transition towards sustainable management approaches encouraged through the SFI.
To find out more about our services, contact us or speak to your agronomist.
References
Sustainable Farming Incentive (SFI) Handbook for the SFI 2023 offer (publishing.service.gov.uk)
Guidance for existing SFI 2022 standards agreement holders – GOV.UK (www.gov.uk)
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