Land agents offer advice in light of SFI suspension

The abrupt closure of the Sustainable Farming Incentive (SFI) scheme to new applications has left many farmers in England grappling with unexpected cashflow concerns.

Defra says the scheme’s budget has been fully allocated, and while existing agreements remain unaffected, the sudden end to new applications has raised concerns about the stability of farming income in the short term.

See also: ‘Cruellest betrayal’ as Defra halts new SFI applications

Simon Britton, head of agri-consultancy at Knight Frank, advised farmers to act swiftly by reassessing their financial plans.

“The immediate priority for affected businesses is to review cashflow and adjust plans accordingly,” he said.

With the SFI no longer available to new applicants, many farmers are facing a loss of a vital income stream.

Mr Britton stressed the importance of focusing on improving operational efficiency and controlling costs to help offset the impact.

He also recommended exploring alternative funding sources, such as the Countryside Stewardship Higher Tier scheme, though he acknowledges that this may come with limited availability and longer processing times.

Until more details are provided in the summer about the next phase of the SFI, farmers are encouraged to remove any reliance on future SFI payments from their financial strategies.

Existing SFI agreement holders

For farmers and landowners with an existing SFI agreement, there is no immediate change. They will continue to receive payments under the terms of their current agreements, which, in many cases, may continue for the next three years.

Those who have been offered an SFI agreement but have not yet accepted it must do so within 10 working days of receiving the offer to avoid it being withdrawn.

Farmers who submitted an application before the scheme’s closure on 11 March but have not yet received an offer can expect to be considered, provided the application meets the eligibility criteria.

However, for those who began an SFI application but failed to submit it before the closure, their applications will not be considered unless there were system errors or technical difficulties preventing submission.

In these cases, affected farmers should contact the Rural Payments Agency (RPA) as soon as possible to resolve the issue.

Revised SFI scheme

Looking ahead, the government has confirmed that the current SFI agreements will remain valid, but the future of the scheme for new applicants is uncertain.

Defra plans to introduce a revised version of the SFI following the upcoming Spending Review, which is expected to place more emphasis on environmentally focused measures.

Farmers will need to be patient as they await further details, with the scheme possibly reopening for new applications in 2026.

David Eudall, economics & analysis director at AHDB, shared his insights on the situation.

He said: “The sudden timing of this change has come as a shock to the industry.

“Many farmers were planning to use the SFI to manage financial risk, and now, with the closure, that adds to an already challenging financial situation.”

He added: “The farming budget had already been significantly eroded by farm-input inflation, and this move places even more uncertainty on the future.

“Farmers are now in a more uncertain situation, particularly with volatile commodity prices and rising input costs.”

Mr Eudall said the AHDB will continue to monitor developments closely, promising to provide more detailed analysis as the situation unfolds.

Next steps

With the SFI’s future uncertain, Knight Frank and other consultancy firms such as Carter Jonas recommend farmers remain proactive and seek expert advice.

As government policies continue to evolve, they say it is more critical than ever for farmers to focus on managing their cash flow, controlling costs, and improving operational efficiency.