Shaped by industry feedback with the goal of improving the balance between profitable farming and environmental outcomes, SFI is making its promised and much-awaited comeback. CPM explores what the update means in simple terms.
“As we’re unsure of how long each window will be at the moment, it’s important to be prepared and ready to apply as soon as applications open.” LEWIS BUTLIN
By Janine Adamson
Just like Schwarzenegger promised in The Terminator, the Sustainable Farming Incentive (SFI) is back, albeit with varying tweaks to the motherboard. And while Defra absolutely shouldn’t be likened to Skynet, it could be argued that the journey so far has felt like an enduring battle of man against policy machine.
But despite such frustrations, this time, the update has involved gathering stakeholder feedback to help ‘refine and strengthen the policy within the scheme’. The result? A simpler SFI with fewer actions and less complexity, claims Defra.
Independent wildlife consultant, Marek Nowakowski, fears the proposed simplicity will be at the cost of wildlife delivery. “The revised scheme design continues to lack direction, steer and vision. It still doesn’t reward delivery and that may be why farmland wildlife continues to decline,” he states.
Among the headline grabbing refinements is a £100,000 annual agreement cap, which aims to allow more farms to benefit from the finite funding pot. Agrovista’s Lewis Butlin says with the equivalent budget not increasing from the days of BPS, it was inevitable the money would run out.
“In 2024 when countryside stewardship was integrated with SFI, 69 unregulated options were suddenly introduced. It was just too woolly and vague, and the true ethos of the scheme was lost. It could never function successfully long-term,” he continues.
“So the £100,000 cap does make sense. In reality, only larger farming businesses may suffer as a result, however, the watch-out will be those with multiple enterprises under one umbrella.”
Marek adds that while the cap seems a good idea, it doesn’t guarantee better delivery. “It may result in more farmers in SFI which looks good for Defra, but rewarding delivery should be the focus not just making it easier for more farmers to enter the scheme.”
From a top-line perspective, Hutchinsons’ Matt Powell believes the announced changes aren’t as drastic as many had initially feared. “We were anticipating stricter caps and there was an overall view that the government would make it far harder to achieve the funding. It’s been a relief in some ways.
“However, while the cap was partly imposed to avoid abuse of the system and fairer allocation, it’ll ultimately cause some larger businesses to take land back into production that historically delivered for nature in ELS & CSS, ultimately seeing habitat decline,” he says.
Delving into further detail, the new offer includes 71 actions (down from 102 in SFI24), having removed those with low uptake or that are perceived to deliver less for food production, the environment, or wider environmental targets.
Some payment rate reductions have also been introduced, alongside an area cap for enhanced overwinter stubble (AHW7). According to Defra, this is because initial payment rates were set too high, making it too attractive to take productive farmland out of food production.
Marek argues that this makes little sense. “I hope it was asked why there were some low uptake options, and whether there were factors that could be addressed. You’d assume they were originally there for a reason.
“For example, the low uptake and subsequent drop of species-rich grassland GRH6 (£646/ha) has been expressed as a tragedy by the ecologists and committed farmers I’ve spoken to. Unsown quality grassland habitats are naturally in short supply, so with low uptake and by removing GRH6 from SFI it puts them at significant additional risk.”
Lewis agrees that the removal process may have been a little overzealous. “We’ve lost payments for soil sampling, nutrient planning and IPM plans, which all yield tangible environmental benefits. While some growers will have already been undertaking these activities for compliance reasons, there will be others who’ll have been encouraged to engage because of SFI.
“I believe this is an odd amendment to introduce and losing these options in particular will be felt as a big loss.”
Conversely, Lewis adds that he can see why others may have been removed. “An example being the overwinter cover crop after maize (SOH4). The yield penalty was simply too much to make it worthwhile.”
Timing-wise, there are two application windows – June for small farms up to 50ha and those without existing ELM agreements, and September for all farms. For those looking to apply in June, the work has to start now, urges Lewis.
“As we’re unsure of how long each window will be at the moment, it’s important to be prepared and ready to apply as soon as applications open. Consequently, we’re undertaking a lot of pre-emptive work at the moment to support growers.”
In terms of the September window, he’s unsure this is the best timing for any prospective applicant. “Surely most farms work to the cropping cycle therefore agreements should be starting at the beginning of September, rather than this being when the application is submitted.
“We have no idea how long it may take to then be processed, so it’ll prove very confusing to keep track of which cropping year agreements refer to,” comments Lewis.
Matt highlights that this is further complicated by existing schemes and their expiry dates. “For those with CS mid-tier agreements expiring in December, and many SFI23 agreements running till June 2027, there’ll be a fear that the money for the September window will soon run out.
“As an industry we’ve been asking for the ability to apply early to avoid this risk, but that’s not been implemented yet. Weighing up where agreements are now and when it’s possible to apply for the next scheme isn’t as simple as the government seems to believe, especially now you can’t increase rotational actions.
“Apply early and there’s a real risk you’ll block yourself from another application; wait too long and this year’s pot may be allocated,” he says.
Lewis believes the lack of clarity doesn’t help with business planning, equally there’s a fundamental flaw in the duration of the agreements. “Three years of commitment isn’t long enough for most farm businesses – some SFI options such as herbal leys simply won’t yield results during that timeframe, and require much longer to deliver good.”
Marek agrees on both points. “There’s a distinct lack of detail, we have no confirmation on management, payments or outcomes. Farmers want to plan ahead so may make decisions in the absence of important SFI details – not very helpful.
“Habitats undoubtedly increase in value over time. In some cases, the three-year approach has fostered a culture of sowing cheap, because it doesn’t have to last very long. The implication of that is we’ve lost the value of quality native species mixes designed to persist for many years,” he stresses.
Prior to the latest announcement, Lewis says Agrovista was scenario planning for life after SFI, to help growers to understand which actions deliver benefits on-farm, even without the associated payment.
“If we scrutinise something like the multi-species winter cover crop (CSAM2), that achieves objectives such as weed suppression and improving soil health. These benefits yield for the farm business in their own right, meaning the SFI payment was an additional bonus.
“This tells us that whatever environmental actions are being undertaken, for long-term sustainability, they must fit that individual farming system regardless.”
Matt raises that opportunities do remain even if SFI proves to be a disappointment. “The government has reduced the margins from some of the most appealing options such as winter bird food (CALH2) and legume fallow (CNUM3), however the changes do mean some land may be brought back into production which can provide opportunities for contract farming or similar.
“Ultimately, it’s still achievable to integrate SFI to support current practices while also de-risking poorer areas of the farm to bolster productive cropped land and improve overall business margins. Working closely with your agronomist throughout this process can help to ensure decisions are well-informed, practical, and tailored to meet the business’ long-term goals.”
Taking a pragmatic stance, Lewis believes for many growers, SFI will be the least of their current woes. “The rises in fuel prices due to the geopolitical unrest couldn’t have come at a worse time. With so much fieldwork ready to take place, an 80p/l hike requires a 0.5t/ha yield uplift to offset the difference.
“Luckily, in most cases, there’s plenty of crop potential in the ground to foster some optimism. Now it’s all down to collaboration between growers and their agronomists/advisors, to get the most from their rotation,” says Lewis.
And despite his admitted scepticism, Marek still believes SFI will continue to play an important role in the future of farm businesses. “We’ve been told to expect a tightening of the schemes, less options, a reduction in some option payments, and shorter agreements; but no meaningful details yet.
“Critically there’s still no mention of quality delivery, so will there be actual meaningful change? This waiting game continues to make farm business decisions difficult and could result in inappropriate habitat choice and delivery,” he concludes.
This article was taken from the latest issue of CPM. Read the article in full here.
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