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Farming & Rural Business Community

Sustainable Farm Incentive 2023 – the journey continues…

Author: David Missen

Published: 20 Jul 2023

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In a surprising move, DEFRA announced on 21 June they would be closing the 2022 Sustainable Farm Incentive (SFI) scheme, which only opened late in 2022. Participants have been given notice of the cancellation and will be paid off when the scheme comes to an end.

The reason for this was stated to be that, with the launch of SFI 2023, there were now 23 available actions (largely taken from the existing stewardship options) over six standards.

This latest development extends the transition which this particular standard has undergone. As originally outlined in the pilot scheme, it was very much focussed on achieving objectives but without specifying what steps needed to be taken, so it was quite possible to utilise existing resources, such as uncultivable parcels, at no additional cost.

When the 2022 standard was introduced, it became more prescriptive but, at the lower level, still enabled compliance to be achieved within existing cultivations patterns – so, for example, the requirement to add organic matter, grow a single overwintered crop on part of the land and take steps to minimise bare land could have been met by many farms within existing operations and at minimal expense. At that point, the scheme looked very like an old “entry level scheme” (ELS) arrangement with broad and shallow commitments which most farms could meet without loss of production.

The 2023 scheme has taken this further, removing those simple requirements and replacing them with a range of actions which either include or are closely modelled on existing stewardship options – the soil standard now includes only a soil management plan and multispecies cover crops or herbal leys, all of which come with a cost and/or involve taking land out of production. Full details of all the new standards can be found here:

There are aspects of the 2023 scheme  which are attractive – the general management options might work for smaller units if they have the expertise to develop the plans without buying in much expertise, and the £20/ha administration charge will be useful, but generally SFI is now looking like a simplified set of stewardship options rather than the more radical “results focussed” scheme which the pilot scheme seemed to foreshadow. DEFRA have indicated that take-up has been disappointing so far – given the three versions of the key standard which we have already seen, this may not be surprising.

What is becoming clear is that the concept of a simple scheme which could be easily and cheaply achieved without loss of production seems to have been abandoned in favour of yet another version of Stewardship with an emphasis on “income foregone” in the pricing. Those who remember the replacement of ELS by the original stewardship product will recall that it was intended to include a “ranking” so that only the best schemes would qualify for funding. In the event, the paperwork was so complex that few farms applied, ranking was never needed and thousands of farms simply left the environmental schemes altogether.

Of course, one of the attractions of “income foregone” is that, where farming profitability is volatile, there is an argument in favour of going for the secure option. This may be relevant for those who rely on contractors and hence have machinery costs that are almost wholly variable. Where this is not the case, the decision to embrace SFI may be much more difficult.

*The views expressed are the author's and not ICAEW's.