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.

From 2021, the area-based Basic Payment Scheme (BPS) in England is being phased out over seven years. By 2028, farmers will no longer receive any BPS payment from the government. Instead, a selection of new payment systems, based on environmental outcomes and public goods, are going to be introduced.

The first to be introduced in England is the Sustainable Farming IncentivePolicy for the Sustainable Farming Incentive is still under development, as such the details around the new payment system are changing regularly. 

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

DEFRA received over 2,000 expressions of interest to take part in the Sustainable Farming Incentive Pilot

As at 15 October 2021, 938 farmers had submitted their applications to take part in the pilot

Latest information on the SFI wider rollout from DEFRA – December 2021:

- Revised set of four core standards (see below for detail) available from early 2022 to all farmers

- Other standards available from 2023 

Timeline of activity

2021 - Pilot year

Pilot starting November 2021:

2022 – Initial scheme rollout

  • Scheme open to all farmers who currently receive BPS - applications open from June 2022
  • Three standards available plus an annual health and welfare review for livestock
  • The arable and horticultural soils and improved grassland soils standards will only have introductory and intermediate levels initially. There are plans to introduce an advanced level from 2023 onwards.

Arable and horticultural soils standard

Level Payment per hectare per year Actions
Introductory £22
  • Test soil organic matter
  • Undertake a soil assessment and produce a soil management plan
  • 70% of winter cover to protect soil (includes any kind of winter cover including autumn sown crops)
  • Addition of organic matter to all of the land entered at least once during the 3-year agreement
Intermediate £40
  • Test soil organic matter
  • Undertake a soil assessment and produce a soil management plan
  • 70% of winter cover to protect soil (must include multi species green cover which covers at least 20% of the total land entered in standard)
  • Addition of organic matter to all of the land entered at least once during the 3-year agreement (includes multi species green cover used to fulfil winter cover requirement above)

See full details of the arable and horticultural standard

Improved grassland soils standard

Level Payment per hectare per year Actions
Introductory £28
  • Test soil organic matter
  • Undertake a soil assessment and produce a soil management plan
  • Minimise bare ground over winter to no more than 5%
Intermediate £58
  • Test soil organic matter
  • Undertake a soil assessment and produce a soil management plan
  • Minimise bare ground over winter to no more than 5%
  • Establish or maintain herbal leys (mixture of grasses, legumes, herbs and wildflowers) to improve soil health on at least 15% of the land entered

See full details of the improved grassland soils standard

Moorland and rough grazing standard

An introductory standard will focus on assessing moorland soils and habitats, and their condition. the standard has not been finalised yet.

Draft actions for introductory level:

Indicative payments £148 fixed per agreement per year, plus additional variable payment rate of £6.45/ha

  • Verify and record soil types, including peatland and associated vegetation
  • Evaluate public goods potential and condition of the moorland
  • Identify opportunities to maintain or enhance public goods

Draft actions for intermediate and advanced levels:

  • To follow later in the SFI rollout
  • In the period 2022-24, the introductory level of this standard should be seen alongside CS and HLS agreements, and other schemes such as Farming in Protected Landscapes. SFI will focus on assessment and planning for the future - while CS and HLS will continue to fund physical actions

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

2023 to 2025 – Full scheme rollout

  • More standards to be added into the Sustainable Farming Incentive scheme between 2023 and 2025
  • Will be decided on payment rates for these new standards, as set out in the payment principles document

Introduction of further standards 2023-2025 (subject to change):

2023 (indicative)

  • Nutrient management
  • Integrated pest management
  • Hedgerows

2024 (indicative)

  • Agroforestry
  • Low and no input grassland 
  • Moorland and rough grazing (all levels)
  • Water body buffering
  • Farmland biodiversity

2025 (indicative)

  • Organic
  • On-farm woodland
  • Orchards and specialist horticulture
  • Heritage
  • Dry stone walls

Further information

Trade and policy

Horizon: trade and policy blog

Webinar: Assessing the impact of the Sustainable Farming Incentive on farm businesses

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