Defra closes the Sustainable Farming Incentive scheme to new applications

The agricultural industry has been dealt another blow today, one of which makes you question the Governments direction of travel with the farming sector in England. The announcement that the Sustainable Farming Incentive (SFI) scheme has closed to new applications is both concerning but worrying following the accelerated reduction in Basic Payment Scheme (BPS) monies.

The SFI scheme was launched as the scheme which would in part replace BPS but also enable farmers to farm in an environmentally sustainable way so it’s a shock to everyone that this announcement has been made, particularly as it’s so close to the recent NFU conference which announced a wave of new grants and environmental actions. It’s clear that the English Labour Government are trying to impose their reset of the industry without consultation.

Although the announcement was a shock, Defra have stated that any existing agreements will be honoured and those which have been submitted but not accepted will be processed providing, they are compliant with the scheme rules.

Defra are stating that the SFI scheme will be reformed in summer 2025 with the new scheme hopefully opening in 2026.

Charles Whitaker, Manager Partner of Brown&Co, has stated that this again highlights Labour’s attitude towards the agricultural industry and demonstrates their lack of understanding with regards to the challenges the industry is facing in order to produce or protect the environment. 

The reduction in BPS along with the inability to enter new environmental schemes is going to hit farmer’s bottom line. Farmers cashflow’s already affected by the 76% reduction in BPS is going to be hit further just at the point in time when many farmers were looking to apply for more environmental actions on their farms and estates. The importance of producing budgets is ever more imperative to fully understand the impact on your business along with understanding your cash requirements.

James Brown of Brown&Co has stated that early engagement in the budget process is key to ensuring that you understand your businesses sustainability potential and cash requirements. This will also aid in preparation for the bank should it be required.

Charles Whitaker reiterated the importance of Farmers getting in control of the future of their business and capital preservation despite the government actions.

It is clear from the announcement yesterday that there will be a significant amount of change within the industry and that a considerable amount of financial and environmental planning will be required to navigate through this transition of change.

Contact your local office for further information.