Welcome boost to SFI budget

The total budget for the Sustainable Farming Incentive (SFI) in 2026 has been increased by £50 million to £290 million. This is welcome news given the current challenges farmers are facing.

As shown by our SFI stacking analysis, the SFI can play a role in stabilising farm business incomes and has a greater impact in years where finances are particularly challenged.

Given the number of challenges farmers are facing this year (e.g. high input costs, lower output, drought) the SFI may offer a buffer.

Our SFI cost benefit tool allows farmers to see which actions provide the greatest return for their business so they can make the best choice for their farm. 

What’s been announced?

There are two application windows for SFI26.

Window 1

This opened on 30 June for farms no larger than 50 ha and for those without Environmental Land Management (ELM) revenue agreements. The budget for window 1 was £60 million.

By 13 July 2026, 75% of this budget had been allocated.

Defra has stated that Window 1 will remain open no later than 11.59 pm on 28 August.

Following the rapid uptake in the first few weeks of the June application window, demand appears to have stabilised and is still open at the time of writing (17 August 2026).

Window 2

The second application window for SFI26 will open in September (exact date to be announced by Defra after Window 1 has closed). This window is open to all farmers and originally had a budget allocation of £180 million.

Following the Government’s announcement on 15 August 2026, the budget for Window 2 will be increased by 28% to £230 million, bringing the total budget for SFI26 to £290 million.

This announcement is part of a wider package providing drought support for farmers. In light of the difficult conditions farmers are facing this summer, there will also be more flexibility within ELM:

• Removal of grazing and cutting restrictions in an ELM agreement
• Permission to create firebreaks on land
• Allowing more time to establish actions where dry conditions have made planting seed mixes impossible

These are temporary adjustments and full guidance is available here.

The bigger picture

While a £50 million boost to the SFI budget is welcome, some will argue that more is needed given that a number of existing Countryside Stewardship Mid-Tier agreements are due to expire at the end of this year and farmers may potentially be looking towards the SFI.

Defra have said that farmers in existing agreements will not have to wait until their agreements end before they can apply for SFI26. This will apply to eligible ELM revenue agreements that expire by the end of February 2027. 

Preparing for SFI26 – What can farmers do now?

Farmers and growers can start planning ahead of the September window opening now. Our SFI cost benefit tool factors in the costs involved in carrying out SFI actions so you can see the net payment you are likely to receive.

This helps you to see:

• SFI26 actions giving you the highest net benefit from a financial perspective
• The opportunity cost/income forgone associated with land requiring actions

As a result, farmers can make the best choices for their farm businesses.