Sustainable Farming Incentive closed for new applications until 2026

What has been announced?

On 11 March 2025, the government announced with immediate effect that it is no longer accepting applications for the Sustainable Farming Incentive (SFI) until a revised scheme is opened in 2026.

The SFI is one of the three key elements of the Environmental Land Management schemes (ELMS) which were introduced to replace the Basic Payment Scheme in England and Wales post-Brexit. As many farmers and land managers know, the SFI was designed to pay farmers and land managers for implementing changes on their land which the government says will "reward and support sustainable food production while protecting and enhancing nature". The SFI is the largest part of ELMS, with over 37,000 live agreements currently in place.

The government has now announced that from 11 March 2025 it is no longer accepting SFI applications and will not be doing so until a "new and improved" SFI scheme is opened in 2026. For those who are already within SFI agreements, the government has confirmed that it will continue to make payments in accordance with the terms of those agreements. The government has also summarised what this means for those who made an application before the announcement but who have not yet received or accepted an offer: essentially, offers will still be made to those who have submitted an eligible application, and will need to be accepted within 10 working days of the offer being made.

It is understood that the key reason behind DEFRA's decision to close the SFI to new applications is that the current budget for SFI has already been allocated and therefore, until the government's Spending Review takes place in summer 2025 and the scheme is reformed, the ability to make applications has been paused. The government has said that details of the revised SFI scheme will be announced in summer 2025, presumably after the Spending Review has taken place.

What is the potential impact on the agricultural sector?

Tom Bradshaw, the NFU President, has said that the closure of the SFI is "another shattering blow to English farms delivered, yet again, with no warning, no understanding of the industry and a complete lack of compassion or care". He went on to say, "What we have now is the haves and the have nots", meaning those who have managed to already enter into and benefit from the SFI, and those who are now unable to until the scheme reopens next year.

This announcement has come at a time of great uncertainty and concern for the farming community, in light of various other pressures and changes including the changes to APR and BPR and the reduction in delinked payments. We anticipate that this announcement will mean that those who are not already in an SFI scheme will have to look to other ways of generating income in the short to medium term – whether that is through a renewed focus on intensive farming or investment into diversification projects.

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