Government slashes SFI options and caps payments at £100,000 in reset
Ministers have unveiled a streamlined Sustainable Farming Incentive (SFI), cutting the scheme from 102 actions to 71 and introducing a £100,000 annual payment cap, in what is being presented as a reset of farm policy.
Defra Secretary Emma Reynolds confirmed the overhaul in her speech to the NFU Conference today (24 February), alongside a wider £345 million funding package aimed at boosting productivity and accelerating innovation.
The reworked SFI will open in June for small farms and those without a live Environmental Land Management (ELM) revenue agreement, with a second application window for all farmers in September.
Around 97% of farms already claim below the new £100,000 cap, according to Defra, which argues the limit will spread funding more fairly and prevent larger agreements from absorbing disproportionate sums.
The government describes the revised offer as “simpler, fairer, more stable, and shaped by farmers”, following months of engagement with industry groups after concerns were raised over complexity and access.
Addressing delegates at the conference, Ms Reynolds said she was “determined to give British farming the foundation it needs to grow”.
“We want farm businesses that are productive, profitable, and resilient,” she said.
The SFI changes sit within a broader package that includes £70m for the Farming Innovation Programme to convert research into practical tools, and £50m for the Farming Equipment and Technology Fund to support investment in productivity, animal health and slurry management.
Ministers say the measures contribute towards a commitment to invest at least £200 million in agricultural innovation by 2030. However, questions remain over the longer-term size and stability of the overall farming budget.
A further £225m will be made available through a new round of ELM capital grants opening in July 2026, supporting projects such as hedgerow planting, slurry storage infrastructure, natural flood management and water-quality improvements.
The Secretary of State also confirmed plans to consult on making Animal Health and Welfare Reviews — vet visits — mandatory for cattle, sheep and pig farmers in England, alongside a new poultry biosecurity grant scheme to help tackle avian influenza.
Industry bodies broadly welcomed the SFI reset, though with differing emphases.
NFU President Tom Bradshaw said it was “encouraging to hear the Defra Secretary reaffirm her commitment to working in partnership with farmers and growers”.
He added that the reformed scheme “appears to strike the right balance between simplifying the process and maintaining flexibility”, while warning that “the resilience of our food system can’t be taken for granted”.
The Country Land and Business Association (CLA) supported the retention of 71 actions but cautioned that the £100,000 cap “has risks”, suggesting it could limit the ambitions of businesses delivering significant environmental outcomes.
The Tenant Farmers Association welcomed the tighter controls, arguing the revised structure should prevent non-active landowners from capturing an outsized share of funding.
Chief executive George Dunn said the 71 options “should provide a broad scope of opportunity for individuals to participate” and added: “What has been proposed by Defra will provide sufficient headroom for hard-working, active farmers to take part in the scheme.”
However, he stressed the importance of clarity around the total available budget, particularly ahead of the September window when demand is expected to be highest.
The Nature Friendly Farming Network described the announcement as “extremely welcome news for many English farmers”, but argued that funding still falls short of what is required for a full transition to nature-friendly agriculture.
With applications reopening in stages and the cap reshaping how payments are distributed, the success of the reformed SFI will hinge not only on its design, but on whether ministers can deliver the longer-term certainty the sector has repeatedly demanded.
