Defra weighs SFI27 changes after backlash over 2026 scheme

Defra is considering changes to how farmers access the Sustainable Farming Incentive in 2027 after this year’s main application window filled within six hours and drew criticism from farming organisations.

In a new blog update, the department said it was “exploring alternatives to a first come, first served application process for SFI in 2027” and plans to open next year’s offer as early as possible.

The proposed rethink follows the rapid closure of SFI26 Window 2 on Tuesday 22 September, when applications exhausted the £233 million budget within hours of the scheme opening. Defra closed the window at 3.48pm.

The NFU said it had repeatedly warned Defra that the available funding would not meet demand and reported frustration, anger and disappointment among farmers following the closure.

NFU vice-president Robyn Munt said: “It should not be a case of first come first served when it comes to delivering for the environment and investing in the resilience of our farm businesses.”

She said the speed at which the window closed demonstrated the level of demand among farmers wanting to invest in environmental measures and farm resilience.

The Country Land and Business Association also criticised the process, arguing that insufficient funding had been made available to meet demand.

CLA deputy president Joe Evans said: “We have always been clear that in this round of SFI, there was insufficient budget allocated to enable farmers to continue delivering for the environment on behalf of society.”

He described the application process as “a scramble for thousands of farmers desperately trying not to be left behind”.

Window 2 originally opened with a £233 million budget, comprising £180 million initially allocated to the round, an additional £50 million announced by the Prime Minister in August and £3 million left unallocated from Window 1.

In its update the following day, Defra said ministers had allocated a further £20 million to Window 2, taking the total amount allocated through the second window to £253 million.

Across both SFI26 windows, £310 million has been allocated to new agreements, which Defra said would amount to £930 million of investment in environmentally sustainable farming over the next three years.

Around 12,200 applications were submitted during Window 2, with the average agreement value applied for standing at approximately £20,700.

More than 8,800 applicants have an existing Environmental Land Management revenue agreement due to expire on or before 28 February 2027, while more than 1,100 did not have an existing ELM revenue agreement.

The government had prioritised small farms and businesses new to ELM revenue schemes through an exclusive first application window earlier in the summer.

Defra said a quarter of previous SFI funding had gone to just 4% of farms making claims. SFI26 agreements were therefore capped at £100,000 a year, while payment rates for some actions were reduced in an effort to spread the available funding further.

Farmers who began an application but did not submit it before Window 2 closed will generally be unable to complete it.

Two limited exception groups can continue where they contacted the Rural Payments Agency before closure: farmers requiring assisted digital support and those prevented from applying because of a technical problem with the service.

The RPA is now processing applications in the order they were submitted, although some will take longer where additional checks are required.

Defra stressed that its Window 2 statistics remain indicative, with final agreement numbers, selected actions, areas and values potentially changing as applications are assessed.

Farmers can also continue to submit expressions of interest for Countryside Stewardship Higher Tier funding, including for woodland improvement, agroforestry, species-rich grassland and scheduled monument management.

Attention, however, is now shifting to SFI27 and whether the application system will be changed following the experience of this year’s round.

Defra has committed to offering SFI again in 2027 and said it will work with farmers and stakeholders as it considers improvements to the scheme. Details of any alternative to the first-come, first-served approach have yet to be announced.