Assessing the impact of the Sustainable Farming Incentive on farm businesses

How are farmers feeling about the major changes occurring in domestic agricultural policy and what are their attitudes towards the new schemes on offer, such as the Sustainable Farming Incentive? What could be the economic impact on farm businesses? Our latest Horizon report contains detailed analysis to address these questions. 

Does the SFI make sense for you?

In this Horizon report, we focus on the huge shift that farmers are facing on the domestic policy front. Direct Payments are going and new environmentally focused schemes, such as the Sustainable Farming Incentive (SFI), are being rolled out. We know that many farmers are keen for more information and insight regarding the potential implications for their farm businesses.   

In collaboration with Harper Adams University, we’ve looked at:

  • How prepared farmers are to face life without Direct Payments
  • The plans they have made, if any, to deal with the removal of Direct Payments
  • Their attitudes towards the Environmental Land Management Schemes (ELMS) that are being introduced, particularly the SFI
  • Reasons which influenced whether or not farmers took part in the SFI pilot

Using AHDB virtual farms, we’ve modelled the economic impact of taking part in the SFI on farm businesses for the SFI pilot and the wider rollout (SFI 2022) and looked at:

  • The net payments for various standards by taking into account the costs involved
  • What this means for the farm business as a whole, including the effect of taking land out of production

Key messages

  • If farmers are already carrying out actions on-farm which are required under the SFI, it is beneficial to join the scheme because they will receive extra income 
  • If farmers are not carrying out the actions required but their farm set-up will allow them to do so with little additional cost, it is beneficial to join the scheme
  • For farmers where this is less apparent, it is worthwhile to carry out the calculations for their own farms to see if taking part in the scheme will be worthwhile for them

Read the full report

Further resources

Read the technical report covering farmers’ attitudes towards the change in English agricultural policy.

Examine the details behind the economic analysis of the SFI carried out using AHDB virtual farms in the accompanying technical note.

Explore our trade and policy webpages with all the latest information on the changing policy and trade landscape.

Discover our blog series which takes a fresh look at the changes farmers face in domestic policy.

Find out more about our Defra-funded Farm Business Review service.

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