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SFI24 on pause: What went wrong and what must happen next

England
Policy & Views
Defra
ELM
Environmental Land Management scheme
Farming budget
Government
policy

Defra has announced an immediate pause to SFI24 in England, with a revised version of the scheme not set to reopen for applications until 2026. Here, we explore the reasons behind this decision, what needs to happen next, and the key lessons for the future of nature-friendly farming.

What happened?

The Sustainable Farming Incentive (SFI) is part of the Environmental Land Management (ELM) Scheme, which also includes Countryside Stewardship (CS) and Landscape Recovery. 

The pause to SFI24 occurred because the funding ceiling had been reached. Any further acceptance of new applications would have taken the spend above what had been allocated. 

Farmers who have a live SFI scheme, an approved offer, a complete and fully-submitted application or took part in an SFI pilot project will have their agreements honoured and will receive the funding as per their agreements.

Farmers who had unfinished applications on the system at the time of the closure, or had not yet commenced an application, will not be eligible for SFI 24 funding.

What is the impact of this likely to be?

This leaves many farmers without agreements and with limited scheme availability. With the SFI24 paused and low levels of CS Higher Tier availability, there are significant risks that some farm businesses may choose to intensify land management, with negative consequences for nature, soil health, water and air quality.

The loss of SFI 24 also disproportionately impacts early adopters, new entrants and small-scale farmers. Early adopters may find their schemes expiring in the next 12 to 18 months with no current replacement, while those who are new entrants or farm small areas have only been eligible to apply for SFI schemes since July 2024.

While it's clear that SFI needs reform, we need a broad and accessible scheme that supports individual farms in adopting nature-friendly practices and incentivises straightforward land management actions.

Jenna Hegarty, Head of Policy, NFFN

While the SFI does need reform, the entire closure of the scheme risks significant and negative effects on farmers wishing to continue, or start their transition to, nature-friendly farming.

Removing it entirely for 12 months, without the standard six weeks’ notice, risks farmers’ faith in the transition and will undermine many farm businesses’ economic health as well as the Government's ambitious and legally-binding nature and climate objectives. 

What changes does the NFFN want the Government to implement?

We have three key key requests for the Government following SFI24's closure:

  • Urgently mitigate the the impact of the pause by introducing an interim support scheme no later than Autumn 2025 for farmers who are not currently in a scheme, or are exiting one without an immediate new agreement available. This should prioritise land management actions aligned with the revised interim targets in the Environmental Improvement Plan while providing a financial safety net for those facing business uncertainty.

  • Provide urgent clarity on the long-term vision for ELMs in England, along with a clear roadmap for its implementation.

  • Secure sufficient investment in the farming budget as part of the Comprehensive Spending Review in the summer to drive economic growth and support nature and climate improvements.

What lessons need to be learned?

We believe there are several key takeaways the Government must consider from this situation:

  • The political decision during the roll-out of ELM to shift from a broad 30:30:30 split across the three main schemes to prioritising the simpler, open-access SFI scheme had significant consequences. The original allocation would have ensured adequate funding for large-scale environmental interventions at a catchment or landscape level - critical for addressing the biodiversity and climate crises.

  • The Labour Government inherited an SFI scheme with no spending cap, a decision made to encourage high uptake. However, this resulted in SFI consuming a disproportionate share of overall funding, despite offering lower value for money compared to other elements of ELM.

  • The scheme design has led to disproportionately benefitting arable farms, which can access more of the higher-paying options, while grassland farms and upland livestock systems have had fewer opportunities to benefit. Future schemes must be structured to deliver fairer support across all farming systems.

  • The lack of robust control measures has led to an excessive uptake of popular (generally high-paying) options. For example, large areas of land have been dedicated to winter bird seed mix when only a small portion is necessary per farm, and permanent pasture was converted to herbal leys.

  • Certain actions under the SFI scheme, such as nutrient management planning and Integrated Pest Management planning, offer limited public benefit relative to their cost. While robust planning is an integral part of any farm business, using scarce public funds for these activities is questionable when other higher-impact interventions lack sufficient funding.

  • Since its launch in 2022, SFI has faced multiple mid-year and year-on-year adjustments, creating uncertainty for farmers. The underfunding of higher-ambition elements of ELM, particularly Countryside Stewardship (CS) Higher Tier, also led to certain options being included in SFI when they were better suited to more targeted schemes.

  • Some farmers have struggled with IT system errors when applying for SFI funding, while others have faced challenges integrating earlier SFI options with newly introduced ones. These issues have added complexity and frustration for applicants.

  • The handling of recent policy changes, particularly around SFI, has significantly impacted farmers’ confidence in Defra and the government’s broader agricultural strategy. This could have long-term consequences for engagement in future schemes and the success of the transition.

Despite these challenges, it is clear that a well-designed ‘broad and shallow’ scheme like SFI remains essential. By supporting individual farms in adopting nature-friendly practices, SFI plays a crucial role in improving farm business profitability and resilience. Incentivising simple but impactful actions - such as enhanced soil protection and flower-rich margins to support wild pollinators - ensures that SFI remains a vital component of ELM, helping to tackle biodiversity loss, build climate resilience, and support the long-term sustainability of UK farming.