An ‘expanded offer‘ under the revamped Sustainable Farming Initiative (SFI) has been largely welcomed – the previous 2022 version attracted far less praise and had a poor uptake. Feedback on the rigid, modular format was not good and thankfully the Department for Environment, Food & Rural Affairs seems to have taken this on board.

However, while it is good that DEFRA is listening, it is not so helpful to those who were brave enough to take up the initial offering; they have effectively had their contracts voided.

How it works: the SFI scheme seeks to provide simple options that fit in with existing cropping and help support removing difficult and unprofitable areas from production. Table summarises of options and payments on a 200ha mixed farm in mid Northumberland, with no existing CS scheme; cropping is a mix of winter and spring crops with 40ha of unproductive grassland let on licence for mowing. There are wet and unproductive areas in most fields and an objective to grow a cover crop before spring cereals to aid soil conditioning


Greater flexibility

Due to be launched this month, the new SFI prescriptions use a simpler approach. They are all stand-alone and last for three years, so tenants can act without landlords’ consent, and payments are made quarterly rather than annually as in previous agreements.

There are ‘whole farm’ offerings to stimulate soil testing, integrated pest management and hedgerow maintenance. The majority of the field-based prescriptions mirror those already available at recently increased rates under the Countryside Stewardship (CS) Scheme.

My Galbraith colleague David Hurst, an agribusiness consultant, has worked on an outline model on a 200-hectare arable/grass farm. This suggests that an SFI scheme could produce £31,500 per year in his theoretical example. Of this, about £3,800 would be from whole-farm options, with the field-by-field prescriptions making up the balance.

David believes that by carefully selecting relatively unproductive areas or aligning options with existing practice, an SFI scheme should have relatively little impact on the overall production of cash crops from the farms. In addition, the scheme offers £1,000 towards plan preparation as an incentive.

BPS transition

He suggests this is a relatively easy win and is packaged in a fairly user-friendly way, without some of the restrictions and potentially awkward timing issues found in CS schemes.

DEFRA has made it clear the latest changes are part of the emerging Environmental Land Management Scheme – aimed at replacing the Basic Payment Scheme subsidies to offer clear ‘public goods’ for public money.

However, the current transitional nature of ELMS means that there are considerable overlaps between a multiplicity of schemes. For example, farmers who are currently negotiating Higher Tier (HT) grants under CSS for January 2024 are faced with a dilemma – should they stick with a CSS based on an application made in April this year, or opt for various parallel prescriptions which are suddenly available through SFI?  Likewise, is there still merit in applying for a CSS Mid Tier scheme when many of the prescriptions are now available through SFI?

This dilemma is shared by Natural England advisers who are under pressure to conclude CSS HT offers in August, before SFI has actually been launched.

Mix and match

Depending on individual circumstances, the best approach may be to strip out the CSS HT prescriptions wherever possible and run them as a parallel SFI, but clearly to remain focused on those priority areas which are only available through the HT Scheme. The SFI options are generally more flexible and should allow more adaptable cropping as policy and indeed markets evolve over the next few years.

ELMS appears to be developing in a more user-friendly way, but there will inevitably be complications with running multiple schemes in parallel. One option might be to wait until the entire ELMS suite is fully developed, but there is no guarantee of when that may be and meanwhile, the opportunity to take payments for existing farming practices may be lost.

  • Natural Capital: Galbraith’s expert advisers guide our clients in realising value in all land uses – by assessing and measuring natural assets, furthering opportunities in biodiversity net gain, and ensuring stakeholders are rewarded fully for their investment in and contribution to delivering ecosystem services and net-zero outcomes.