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The Sustainable Farming Incentive: food vs the environment?

  • by JW

“Financially, it makes sense to enter unproductive areas of your farm into the more ambitious, higher paying actions of the SFI.” [AHDB consultancy]


The government is offering its SFI or Sustainable Farming Incentive to farmers – and as the AHDB consultancy points out, the Sustainable Farming Incentive basically “rewards farmers in England for carrying out actions that benefit the environment.”

The SFI is part of the Environmental Land Management schemes (ELMS) that are being rolled out in England under the concept of ‘public money for public goods’. All farmers who are eligible for the Basic Payment Scheme can apply. There is no deadline, so farmers can choose to apply at a time that suits them. The scheme will develop over the agricultural transition, and new standards will be brought in.

The NFU or National Union of Farmers provides a lot of guidance and information on the SFI scheme – but has recently been calling on Defra to publish details on new the SFI offer:

Four months after applications for SFI reopened, Defra has announced it has received more than 10,000 applications from farmers. The SFI opened for applications in 2023, with those having secured agreements in that year receiving an advanced payment in the first month of their agreement.

NFU Vice President David Exwood said he was “encouraged to see such positive engagement from the farming community with SFI”, adding that it was important for all farmers to be able to access the offer. “But we now need the detail behind the new SFI actions announced in January such as support for precision farming and uplands and moorlands, and a clear timeline for the application process. This will provide further clarity and allow farmers and growers to put together a comprehensive agreement for their farming businesses,” David added.

The AHDB consultancy has just published its analysis looking at food versus the environment – and the unintended consequences of the SFI:

Will it really pay to take farmland out of production and capitalise on high paying agri-environment actions? We consider the various considerations and implications at play...

While the aim is to produce food in an environmentally friendly manner, the debate of producing food versus looking after the environment has again raised its head. We have to look no further than the food versus fuel argument in biofuel production as a recent example of this clash of objectives. Even though the purpose of the new Environmental Land Management schemes (ELMs), such as the Sustainable Farming Incentive (SFI) is to produce food in harmony with the environment, there may be unintended consequences, not only for individual farm businesses but the industry as a whole...

Our analysis of the SFI has shown that, financially, it makes sense to enter unproductive areas of your farm into the more ambitious, higher paying actions of the SFI, as sacrificing crop area/productive land has a negative impact on a business’ bottom line. Furthermore, income from the SFI can act as a buffer against challenging market conditions. Yield mapping may be a good way to understand the condition and potential of your farmland. The SFI can make you money from your least productive land and, potentially, increase its productivity in the long-run.