The government announced a widely-expected reset of the Sustainable Farming Incentive (SFI), the main “green payment” scheme for farmers in England that replaces EU-style subsidies, at the NFU Conference yesterday. The relaunch, almost a year after the scheme was pulled with little notice, aims to rebuild confidence after earlier changes and to simplify how farmers are paid for environmental actions.
Here’s what it means for domestic food production:-
1. A shift toward “food production + environment”
The scheme continues the post-Brexit policy of paying farmers for environmental outcomes, such as improving soil health, biodiversity and water quality, rather than simply paying them based on the amount of land they farm.
However, the redesigned scheme emphasises that these environmental actions should work alongside productive farming, not replace it.
This means that farms are encouraged to remain productive while adopting practices such as cover crops, hedgerow management or soil improvement and in theory it's a return to the old MO that should protect long-term yields by improving soil health and resilience.
2. Less complexity, clearer incentives
DEFRA reduced the number of eligible actions from 102 to 71 to make the scheme simpler for farmers to use, and implemented a £100,000 annual payment cap per farm, aimed at spreading funding more widely across the sector.
This should make it easier for smaller farms to participate. Large farms may receive less subsidy overall, which could affect investment decisions.
3. Limits on land taken out of production
Some environmental actions are capped at 25 % of farm area, limiting how much land can be removed from food production - an attempt to balance nature goals with maintaining domestic food output.
4. Additional productivity funding
Alongside the scheme, government also announced £120m for innovation and technology to improve farm productivity, with the intention that higher efficiency (e.g., precision agriculture or water management) could help offset environmental requirements.
Overall, the relaunched SFI is designed to maintain domestic food production while improving environmental sustainability. In the short term it may slightly change land use and farm economics, but the policy goal is a more resilient food system that produces food while restoring soil, biodiversity and water quality.
Image: NFU
