Background to the Sustainable Farming Incentive

The Sustainable Farming Incentive is a new government scheme that rewards environmental land management. Find out more about the new policy and keep checking back for updates as the scheme develops.

The area-based Basic Payment Scheme (BPS) in England is being phased out. By 2028, farmers will no longer receive BPS payments. Instead farmers will have access to new payment systems based on environmental outcomes and public goods.

In England the Sustainable Farming Incentive (SFI) is underway. A pilot version of this scheme began towards the end of 2021, followed by a wider rollout in 2022 which had three standards on offer. SFI 2023 has 23 individual actions available for farmers. Policy for the SFI is still under development and continuously evolving as part of Defra's co-design approach. 

Main objectives of the Sustainable Farming Incentive

  1. Maintaining and enhancing the natural environment
  2. Reducing carbon emissions
  3. Improving the health and welfare of farmed animals

Latest information

Applications for the Sustainable Farming Incentive (SFI) 2023 opened in September 2023.

A key difference between SFI 2023 and previous versions of the scheme is that farmers can choose from individual actions rather than sign up to a package comprising a set of actions which all need to be completed to qualify for payment.

A management payment of £20/ha for the first 50 hectares entered into the scheme is available to cover participation costs. 

There are 23 individual actions that farmers can choose from. This is not a final list - further actions will be made available as the scheme develops.

Up to 50 new actions are expected to be launched in Summer 2024, including precision farming and agroforestry actions.

SFI 2023 actions

CodeActionAnnual payment
Actions for soils
SAM1 Assess soil, test soil organic matter and produce a soil management plan £6.00/ha plus additional payment of £97 per agreement
SAM2 Multi-species winter cover crops £129/ha
SAM3 Herbal leys £382/ha
Actions for moorland
MOR1 Assess moorland and produce a written record £10.60/ha plus additional payment of £272 per agreement
Actions for hedgerows
HRW1 Assess and record hedgerow condition £5 per 100m - one side
HRW2 Manage hedgerows £13 per 100m - one side
HRW3 Maintain or establish hedgerow trees £10 per 100m - both sides
Actions for integrated pest management
IPM1 Assess integrated pest management and produce a plan £1,129 per year per agreement
IPM2 Flower-rich grass margins, blocks or in-field strips £798/ha
IPM3 Companion crop on arable and horticultural land £55/ha
IPM4 No use of insecticide on arable crops and permanent crops £45/ha
Actions for nutrient management
NUM1 Assess nutrient management and produce a review report £652 per year per agreement
NUM2 Legumes on improved grassland £102/ha
NUM3 Legume fallow £593/ha
Actions for farmland wildlife on arable and horticultural land
AHL1 Pollen and nectar flower mix £739/ha
AHL2 Winter bird food on arable and horticultural land £853/ha
AHL3 Grassy field corners and blocks £590/ha
Actions for farmland wildlife on improved grassland
IGL1 Take improved grassland field corners or blocks out of management £333/ha
IGL2 Winter bird food on improved grassland £515/ha
Actions for buffer strips
AHL4 4m to 12m grass buffer strip on arable and horticultural land £515/ha
IGL3 4m to 12m grass buffer strip on improved grassland £235/ha
Actions for low input grassland
LIG1 Manage grassland with very low nutrient inputs (outside SDAs) £151/ha
LIG2 Manage grassland with very low nutrient inputs (SDAs) £151/ha

See full details of these standards in the SFI 2023 hand book

Annual health and welfare review

Offer initially available to farmers in England who are:

  • Keepers of cattle, pigs and sheep with more than 50 pigs, 20 sheep or 10 cattle
  • Currently eligible for BPS

 Defra will fund a yearly visit from a vet, or vet-led team. Other details include:

  • Time-limited offer for three years
  • Includes diagnostic testing for priority diseases, bespoke advice on health, welfare biosecurity and responsible use of medicines
  • Farmer and vet to agree a series of recommended actions that can be monitored on a yearly basis
  • Testing will focus on identifying priority disease and conditions in cattle, pigs and sheep:
    • Cattle: Bovine Viral Diarrhoea (BVD)
    • Pigs: Porcine Reproductive and Respiratory Syndrome virus (PRRS)
    • Sheep: Parasitic resistance to anthelmintic treatments
  • Payment rates per review:
    • Pigs - £684
    • Sheep -£436
    • Beef cattle - £522
    • Dairy cattle - £372

Further information

Trade and policy

Assessing the impact of the Sustainable Farming Incentive on farm businesses

Defra updates on the Sustainable Farming Incentive on GOV.UK