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Sustainable Farming Incentive (SFI) Update August 2022

The Sustainable Farming Incentive

With the Sustainable Farming Incentive (SFI) now open for applications, farmers are considering ways to mitigate their reducing Basic Payment Scheme (BPS) payments.  However, at first glance, the SFI payments will top up the initial losses but will be far from replacing past subsidy in the long run.

Having had several meetings in anticipation of submitting a SFI application on behalf of farmers, it is apparent that many are already carrying out the majority of actions and requirements to meet either the introductory or intermediate levels of the standards that are available this year.  Those farms that are farm assured are already a step ahead, especially in respect of record keeping.

From our initial meetings, farmers are willing to enter into the scheme to top up their annual subsidy but it remains to be seen how viable the payment rates will be once BPS has ceased.  Given the requirements and environmental objectives of the SFI, farmers need to see the SFI as a comparison to environmental stewardship schemes, not as a replacement to the area-based payments of BPS.

The quarterly payments of SFI may assist in the annual cash flow of farmers, especially if the advanced levels of future standards can be met.

With arable soils, improved grassland soils and moorland standards available this year, we can expect to see arable land and improved grassland land standards added, along with hedgerow and woodland standards in the coming years.

It is worth noting that the SFI can be applied for on land in a Countryside Stewardship agreement, but the SFI standard area will be reduced accordingly.  Payment will not be made twice for the same outcome from either scheme.

Date: 16/08/2022