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Sustainable Farming Incentive - Progress Update

Sustainable Farming Incentive - Progress Update

Sally Blowey of Stags Professional Services explains the further details recently released by DEFRA regarding the Sustainable Farming Incentive

In a progress update published on 30th June 2021, DEFRA have released further details on the expected early rollout of The Sustainable Farming Incentive (SFI) in 2022 which will be open to all Basic Payment Scheme recipients. The current pilot is only open to those who expressed an interest in early 2021, with more than 2,000 applications received. The lessons learnt from this pilot will roll into the 2022 application round and the scheme will continue to evolve before a full rollout in 2024.

The SFI is the first of three new schemes under the Environmental Land Management (ELM) Scheme to be launched by DEFRA. The SFI will reflect a fundamental change in DEFRA’s approach to checking compliance and monitoring agreements, with the focus on outcomes and improvement, rather than penalising shortcomings.

The SFI will pay farmers to manage their land in an environmentally sustainable way, above the regulatory requirements. Actions will be grouped into ‘standards’ enabling farmers to identify actions best suited to their land and business. The aim is to make it straightforward for everyone to take part.

Through the SFI, farmers will be rewarded for:

  • Maintaining and enhancing the natural environment
  • Reducing carbon emissions
  • Improving the health and welfare of farmed animals

Within each standard there are three levels for participants to choose from – introductory, intermediate and advanced. Each level will be more challenging than the previous and deliver greater environmental benefits.

The core elements of the Sustainable Farming Incentive that will be available in 2022 are:

  • Arable and horticultural soils standard
  • Improved grassland soils standard
  • Moorland and rough grazing standard
  • Annual Health and Welfare Review

Payments are moving away from the income foregone/cost incurred approach inherited from the EU and will be subject to ongoing review. The current indicative payment rates for the soil standards are:

  • Improved grassland soils (per hectare):

introductory: £26         intermediate: £44        advanced: £70

  • Arable and horticultural soils (per hectare):

introductory: £26         intermediate: £41        advanced: £60


Through the soil standards, farmers will be rewarded for management practices that improve soil health by improving soil structure, soil organic matter, and soil biology. Funding will be available for actions to: maintain and improve the condition and structure of soil; promote clean water; and improve climate resilience, biodiversity, and food production. This will contribute to a range of environmental and climate change outcomes, aiming to:


  • Reduce levels of sediment, nutrient, pesticide, and chemical pollution in water
  • Increase ground and surface water resources
  • Reduce flooding
  • Reduce compaction, erosion, and run-off
  • Reduce loss of water and organic matter
  • Reduce greenhouse gas emissions
  • Maintain or enhance carbon storage, water storage, and biodiversity


Annual Health and Welfare Review

As a first step on the Animal Health and Welfare Pathway, Defra will fund a yearly visit from a vet or vet-led team. This will aim to reduce endemic diseases and conditions within livestock, promote responsible use of veterinary medicines, improve welfare, increase farm productivity and build on the strong relationships that exist between farmers and vets.


The farmer and their chosen vet will agree a series of recommended actions after a detailed conversation about the farm, its practices, and any known health and welfare concerns or opportunities. The review will recommend actions to improve livestock health and welfare which will be a way of measuring yearly progress.


Testing will initially focus on identifying priority endemic diseases or conditions in cattle, pigs, and sheep. For cattle the initial tests will be for Bovine Viral Diarrhoea (BVD), which is estimated to cost the industry around £14 million per annum. Payments under the scheme are expected to cover the full cost of vet time and diagnostic testing.


Further standards are being developed and will be added to the scheme between 2022 and 2024. Standards currently being worked on are for hedgerows, waterbody buffering, low and no input grassland and farm woodlands.


If you would like assistance with applying for the SFI when the early rollout is launched or advice on the full range of grants currently available to farmers and land managers please don’t hesitate to get in touch with your local Professional Services team on 01884 235701.