After the closure of the Sustainable Farming Incentive, what’s the plan now? – Inside track

On 11 March, the government abruptly closed the Sustainable Farming Incentive (SFI) to new applicants. The decision to close this Environmental Land Management (ELM) funding scheme, the only one that was open to applicants, with no notice has unsurprisingly been met with backlash. Whilst those in the scheme will continue their three year agreements, anyone that hadn’t quite clicked “submit” on their application is left without access to any ELM scheme.

Through ELM,schemes like SFI pay farmers to restore nature and for actions that mitigate climate change, supporting them to transition towards sustainable practices. With 70 per cent of UK land farmed, how our food is produced has a major impact on the natural world.

SFI is the entry level option amongst the three ELM schemes. Whilst a useful stepping stone for farmers entering agri-environment schemes for the first time, it has often been criticised for being unable to deliver the scale of change needed to meet climate and nature targets or provide adequate support for the lowest paid farmers.

Whilst a scheme with no budgetary constraints was inevitably going to have to be closed to new applicants at some point, the brusque manner of the announcement has further fuelled existing anger in the farming community. Relationships were already strained after the autumn budget’s inheritance tax changes.

The Department for Environment, Food and Rural Affairs (Defra) had assured farmers they would be given six weeks’ notice before any major changes were made to SFI but, without warning, the scheme was closed to anyone who had not yet submitted an application, without a timeline for when it will reopen.

Farming Minister Daniel Zeichner says now is the time for a reset, to ensure ELM delivers for farmers, nature and the public purse. Whilst the decision continues a chaotic approach to farming policy, leaving farmers in the dark about when schemes will reopen, there is a real need to reassess whether ELM is delivering  against the climate and nature targets. As Defra embarks on a reset, what should it do next?

A clear timeline for future funding is needed
Farmers need good information to plan their businesses for the long term, but they have no details on when future funding will become available. Though the government has said SFI will reopen after the spending review in June, this is too vague for farm plans. This is particularly important for those, like upland farmers, who do not make a profit from food production alone but also manage their land, and their budgets, around nature restoration.

Environment Secretary Steve Reed may be developing a long term Farming Roadmap but, in the meantime, farmers need details on when they can apply for more funding, how much funding will be available and if they will be eligible to receive it. This is essential to rebuild trust between the farming industry and the government, especially as ministers look to work closer with farmers on meeting environmental targets.

More ambitious payment schemes should reopen
Increasing value for money in the farming budget was cited as a key reason for closing and reassessing the SFI. This makes the next step for government obvious. It should reopen the other two ELM schemes: Higher Tier Countryside Stewardship and Landscape Recovery, both of which offer far to the taxpayer than SFI. This way, the government could pay farmers to take the more ambitious environmental actions that many of them already want to do.

There is demonstrable demand from farmers. The last round of Landscape Recovery was oversubscribed and one in five applicants to Higher Tier Countryside Stewardship were rejected due to lack of capacity, with thousands of farmers signing a petition calling for the scheme to be expanded.

Last year, the government committed to reopening Higher Tier Countryside Stewardship in 2025. The closure of SFI means that, until one of them reopens, there are no funding schemes currently available for farmers. The government needs to act fast to reopen the scheme and provide a clear plan of how large the three schemes will be going forwards that aligns with the climate and nature targets.

The farming budget needs protecting
The farming budget is vital to the UK’s security and stability. Through ELM schemes, the government supports farmers to use their land in the way that offers the most benefits for society, ie growing food, but also reducing flood risk and creating carbon-storing habitats, as well as allowing our beloved British wildlife and landscapes to thrive.

Independent analysis suggests the farming budget should be £3.1 billion a year for England to meet the interdependent needs of both farmers and the environment, rather than the £2.5 billion . At the very least, the existing budget must be protected. Supply chain could be used more actively to top up the public funding to the level required.

Climate change and biodiversity loss are the greatest threats to domestic food security, with wet weather, heatwaves and increased pests and diseases all causing recent shortages on supermarket shelves. Food production in the UK was significantly lower in 2024, with research suggesting the wet winter of 2023-24 reduced the UK’s ability to feed itself by nearly a tenth. Supporting farmers properly is essential to tackle this worrying trend.

In an uncertain world, the government cannot afford to leave farmers and the environment they depend on out of the funding equation. For a genuine and positive reset of ELM, ministers must be clear with farmers about their plans, reopen all the ELM funding schemes, including more ambitious ones, and they must protect the budget to give farmers certainty about the future.