Government closes applications for SFI scheme in England

The Government has announced that applications to the Sustainable Farming Incentive (SFI) are now closed. As of March 2025, over 50,000 farm businesses have joined these schemes, reportedly covering more than half of all farmed land in the country.

According to figures released by Defra last month the action covering the most land area in SFI is: “Assess soil, produce a soil management plan and test soil organic matter” (SAM1 and CSAM1), covering 3,270,000 hectares.

This is 38% of the utilised agricultural area (UAA) of England. Only 3.4% of UAA is in SFI schemes that temporarily take land out of production.

The SFI has been very popular, with more than 37,000 multi-year agreements currently active.

Defra aimed for 70% or higher SFI uptake by farmers and land managers (Defra 2024) by the end of the agricultural transition period, which started on 1 January 2021 and will run to the end of 2027. The number of holdings in England is 102,000 (Defra 2024). Uptake is still well below this 70% target.

The SFI has encouraged farmers to adopt environmentally friendly practices, with participation levels leading to the full allocation of the program's budget.

While new applications are currently on hold, existing agreements remain in place, and the government plans to introduce a new and improved SFI in the future.

What changes have been announced?

Because so many farmers have joined the SFI, the Government has now reached the limit of its farming budget for this program. Our November analysis shows that the farming budget has been significantly eroded by farm input inflation.

This means they have stopped accepting new applications for the SFI as of 11 March 2025. However, all existing agreements will continue, and farmers who have already applied and are eligible will still be accepted into the program.

What does this mean for farmers?

• If you have an SFI agreement: Nothing changes. You will continue to receive payments as normal under the terms of your agreement. In many cases, this will continue for another three years
• If you have been offered an agreement but haven't accepted yet: You need to accept your SFI agreement offer within 10 working days of it being offered. If you don't, the offer may be withdrawn
• If you submitted an SFI application before applications closed but haven't received an offer yet: You will be offered an agreement, provided your application is eligible
• If you started an SFI application but did not submit it before applications closed: You will not be able to submit your application now. The only exceptions are for a small group of farmers who were blocked from submitting their applications due to a system fault or had requested 'assisted digital' support from the Rural Payments Agency to apply, and ex-SFI pilot farmers whose pilot agreement has already ended but haven't applied for the full SFI 2024 offer on land which was in their Pilot agreement
• If you have an SFI pilot agreement or your SFI pilot agreement has ended: If you are in the SFI pilot, you will be able to apply when your pilot agreement ends. If your pilot agreement has already ended but you haven't applied for the expanded SFI offer yet, you will still be able to apply. The Rural Payments Agency will let you know how to do this shortly

What are the next steps?

The Government plans to provide more details about a reformed SFI offer later this year, with information to follow the official government Spending Review.

Any new scheme is reported to be aimed at supporting farmers, benefiting nature, and targeting public funds effectively towards priorities for food, farming and nature.

However, until we see details of any new scheme, we have no sight of potential budget size or scope.