After rumblings that changes were coming to the Sustainable Farming Incentive (SFI), Defra announced last night that it had stopped accepting new applications.
It states that every penny in existing schemes will be paid out, and outstanding eligible applications that have been submitted will be taken forward. However, the government now says that all the money for SFI has been allocated.
Those involved in the SFI Pilot will be able to apply once the pilot agreement ends, including those whose agreements have already ended.
The government states that while there was underspend in the farming schemes set up by the Conservatives, efforts to encourage growers to take part have led to 50,000 farm businesses taking part, with more than half of all farmed land managed under schemes.
The largest of these, SFI24, now has 37,000 multi-year agreements.
The decision to close SFI is due to the fact that it is uncapped and there is a finite farming budget. Defra states that it is the right time for a reset.
Minister for Food Security and Rural Affairs Daniel Zeichner said: “This Government is proud to have set the biggest budget for sustainable food produce in history, to boost growth in rural communities and all across the UK, under our Plan for Change.
“More farmers are now in schemes and more money is being spent through them than ever before. That is true today and will remain true tomorrow.
“We have now successfully allocated the SFI24 budget as promised.”
Defra says that Environmental Land Management schemes will remain in place, including SFI, with a new and improved offering announced following the Spending Review.
‘Another shattering blow’
The response from the NFU was swift, highlighting that growers had been given no warning about the closure.
NFU president Tom Bradshaw said: “This is another shattering blow to English farms, delivered yet again with no warning, no understanding of the industry and a complete lack of compassion or care.
“We have had major concerns for years about whether there was the capability within Defra to deliver the agricultural transition post-Brexit. We have warned time and time again that large parts of the SFI were poorly designed and that the department was consistently failing to deliver it.
“Today’s terrible news was delivered with only 30 minutes warning to us before ministers briefed the press, leaving us unable to inform our members. There has been no consultation, no communication; there has been a total lack of the ‘partnership and co-design’ Defra loves to talk about. It is another example of the growing disregard for agriculture within the department.
“The fact that ministers are actually trumpeting this as good news shows how desperately detached they are from the reality on the ground and how little they understand this industry.
“It leaves us with little choice but to see Defra as a failing department. The chaos has got worse and worse and farmers are paying the price. Bad decisions, misdirection, promises broken, no transparency and yet more financial disaster for farming.
“When the Chancellor dramatically accelerated the end of the old schemes for all farmers, it was on the promise that they would all be able to access the new ones, which paid them for doing environmental work. But the door has now been slammed shut for thousands of farmers, creating haves and have nots based purely on timing.
“They say the money is spent, but because Defra refuses to be transparent we don’t know where it’s been spent, or whether it’s all been spent within this year.
“The awful dilemma now faced by many farmers is whether to turn their backs on environmental work and just farm as hard as they can to survive. This is a loss to both farming and the environment and cannot be what was intended.
“It is a bleak irony that we were set to reveal tomorrow that farming confidence in England and Wales has plummeted to its lowest level ever – lower than last year when those who are now Defra Ministers said it was a scandal and a disaster.
“If confidence was at rock bottom and investment through the floor yesterday, tomorrow it will be gone entirely.”
Response from the industry
Land agents Carter Jonas, also responded to the closure, with partner James Bradley stating: “We were working on more than 30 SFI 2024 applications for our firm’s clients to submit, demonstrating the direct impact that this will have on farms. In 2025 there is a significant change in BPS payment values and these agreements would have been pivotal to farm income and profitability in 2025 and beyond.
“At best, landowners will have to wait until a new scheme is announced, which we hope will be very soon. At worst, changes to eligibility criteria will prevent businesses from entering, or a reduction in the value of options will mean that what was already financially quite marginal becomes unaffordable for farmers, who will be best advised not to apply.
“Many of our clients’ confidence in Defra will be knocked again by this announcement because it makes long-term planning difficult. The stated six-week notice of closure for applications was not given, mirroring the Capital Grant Scheme in 2024, meaning that the goalposts have moved without warning.”
Katie Hilton, director and grant funding specialist at Cheffins, added: “This is hugely disappointing news for the industry. With many other types of funding schemes having disappeared, the Sustainable Farming Incentive is heavily relied upon by farm businesses to access much needed support whilst fulfilling the government’s environmental aims. Now, this has also been pulled without prior warning.
“Across our Eastern region client base there are many farmers that were still planning to access SFI but haven’t done so yet due to various factors around business planning. This doesn’t mean they don’t need the funding; rather they have been led to believe that the SFI’s open application window, loudly heralded by Defra as flexible and widely accessible, would remain so. Now, there is widespread dismay and anger at this latest action.
“The agricultural transition that was so clearly set in place to help farmers adjust their businesses post-Brexit is being systematically undone in one sudden blow after another, and without any clear government strategy for the farming sector in evidence.”
Simon Britton, head of agri-consultancy at Knight Frank, said: “The immediate closure of the Sustainable Farming Incentive (SFI) applications, without warning or consultation, is deeply frustrating for farmers who were planning on this financial support. Many now face unexpected cash flow pressures, while others with applications delayed by agency queries have been unfairly excluded. A scheme intended to provide stability during the transition has instead created further uncertainty, raising serious concerns about the government’s approach to agricultural policy.
“Looking ahead, we need more clarity on the next phase and intended direction of SFI. Early indications suggest it will be more targeted towards the environment and less favourable land for food production. A positive could be this will go some way in supporting struggling upland farmers but could mean arable and lowland livestock businesses need to reconsider their expectations. Until details emerge, farmers planning for the next 6, 12 or 18 months should discount SFI from their financial strategy and focus on building resilience through cost control and efficiency.
“The immediate priority for affected businesses is to review cash flow and adjust plans accordingly. Identifying cost efficiencies will be a priority, and exploring alternative options, such as the Countryside Stewardship Higher-tier scheme – may be necessary, though it comes with limited availability and longer lead times. Since the capping of the Basic Payment Scheme (BPS), cash flow has become a growing challenge for many farm businesses, and this latest disruption only reinforces the need for careful financial planning.
“At Knight Frank, we continue to advise farmers to focus on what they can control. Government policy remains unpredictable, but businesses that understand their cost base, manage cash flow effectively and improve efficiency will be best placed to navigate whatever comes next.”