Defra forecast SFI could close on opening day, documents reveal

Defra had forecast that its Sustainable Farming Incentive (SFI) could close on the day it opened, months before the scheme shut within six hours and left almost 2,900 applications unfinished.

Newly released government documents show that officials had modelled the possibility of funding being exhausted almost immediately, raising questions over how the department prepared for the surge in demand.

The forecasts, produced in April and May 2026, examined several scenarios for the scheme's second application window, including the possibility that it would need to close on its opening day in September.

Despite those projections, the window closed at 3.48pm on 22 September, after receiving 12,204 applications worth almost £264 million.

A further 2,859 applications had been started but not submitted when the scheme closed, although it remains unclear how many applicants intended to complete their submissions.

The findings were obtained by Farmers Guide through an Environmental Information Regulations request, with Defra publishing its response on Tuesday (20 October).

The documents reveal that officials had considered low, medium and high levels of demand, examining how quickly different funding allocations could be exhausted.

Under its highest-demand forecasts, Defra anticipated that the scheme could close shortly after opening in September.

The department acknowledged that its modelling included scenarios that could result in closure on the first day, although the projections were calculated on a monthly rather than daily basis.

One particularly striking forecast, based on an overall SFI budget of £300 million, predicted that 12,200 applications worth £245 million would be submitted before the second window closed.

In reality, 12,204 applications were received, just four more than that projection, although their combined value was almost £19 million higher.

Defra said its modelling had not included the final overall SFI26 budget of approximately £310 million, but had examined a scenario involving a £300 million limit.

The second application window initially had £233 million available, with a further £20 million announced the following day, bringing its allocation to £253 million.

That meant the total value of applications submitted exceeded the eventual budget by almost £11 million.

Defra explained that applications were allowed to exceed the available funding to account for potential reductions in agreement values over their three-year duration, including changes to land parcels, the removal of actions or agreements ending early.

The disclosure has also raised questions about what ministers knew before the scheme opened.

As part of the information request, Farmers Guide sought copies of any briefings or advice provided to Defra ministers between 1 August and 22 September warning that demand could exceed the available funding or result in a same-day closure.

Defra confirmed that it held information covered by the request but refused to release it, citing an exception under the Environmental Information Regulations relating to internal communications.

The department argued that disclosure could discourage officials from having frank discussions during policy development, although it acknowledged the public interest in government transparency and accountability.

The refusal means the contents of the relevant internal communications remain unknown, including the precise warnings or advice ministers may have received.

Figures released alongside the forecasts illustrate the extraordinary pace at which farmers submitted applications.

By midday on 22 September, almost 4,000 applications worth £91.4 million had been received.

By 3pm, the total had reached 10,420 applications worth more than £231 million, before rising to almost £264 million when the window closed.

The findings follow repeated warnings from farming organisations that the available funding would be insufficient to meet demand.

Following the September closure, NFU vice-president Robyn Munt said the speed at which funding was allocated came as no surprise, arguing that the union had warned Defra for months about the scale of demand.

"The rapid uptake of the scheme comes as no surprise. We have made the demand clear to Defra for some time," she said.

She added that the closure demonstrated farmers' appetite for delivering environmental improvements and investing in the resilience of their businesses.

The uncertainty is particularly significant for farmers approaching the end of existing environmental agreements.

Official government statistics show that approximately 72% of applications submitted during the second window came from farm businesses with existing agri-environment agreements due to expire by February 2027.

Meanwhile, the Rural Payments Agency is continuing to process applications received before the window closed.

In an update published on 15 October, Defra confirmed that around 2,500 agreement offers had been issued from approximately 12,200 applications submitted during the second window, with 36% of those offers having started.

The department also confirmed that some farmers who experienced valid technical problems would be given an opportunity to complete or amend their applications, subject to eligibility conditions.

This includes certain farmers who started an application but were unable to submit it because of a technical issue reported by 29 September.

The government has defended its handling of the scheme, pointing to additional funding allocated in response to high demand and the need to maintain budget controls.

During a House of Lords debate on Monday (19 October), ministers reiterated that £310 million had been allocated across both SFI26 application windows.

Defra is now exploring alternatives to the first-come, first-served application process for SFI in 2027, following widespread criticism of September's closure.

However, the newly disclosed forecasts are likely to bring renewed scrutiny of the decisions taken before the window opened, particularly how the risk of funding running out on the first day was assessed and communicated to ministers.