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The Sustainable Farming Incentive (SFI)

Thinking of options?

Put off by a 156-page handbook?

Want to wait until 2024?

This article is aimed at being as simple, but informative as possible to help you get your head around the Sustainable Farming Incentive (SFI) and how it relates to other grant schemes.


Core Principles

To start with – don’t be put off by the name. It’s just trending jargon. It’s really about Defra allowing farmers to be paid for either farming exactly as you are already; or adopting some alternative management practices on selected parcels of land to enable you to ‘fulfil the aims’ of any options chosen.

It also almost ‘bends over backwards’ compared to many previous schemes to be able to accept farmers into the scheme.

This includes such things as, although it is nominally a three-year agreement, you may well still be eligible if you just ‘expect’ to have control of the land for this long.

You are also able to make reasonable (and some may say generous) adjustments to your agreement annually.

Although the guidance has to be written in a slightly ‘rules are rules’ way to be legal. A quick ‘look under the bonnet’ should reassure most people that so long as any intentions are honest, any short comings will usually be dealt with in an entirely ‘common-sense’ way.

Failing to achieve the aims’ of any options will often involve nothing more than not being paid on the area of any shortfalls if they are substantial enough to be considered ‘shortfalls’. Additionally, in the time-honoured agricultural way – any failures can usually be corrected for at the end of the year and future payments shouldn’t be affected.

As a general rule, SFI options can be claimed alongside activities already being paid for via other stewardship schemes, but not for exactly the same management activity.

Payments are made quarterly in arrears. Defra are currently keen to make payments as soon as they can though, with the first payment being made within rather than after the first quarter of an agreement.

That summarises half of those 156 pages! The other half covers outlining what ‘the aims’ of each option are.

Deciding on Options and Grouping Options

As SFI and other schemes being offered to farms are aimed to be ‘alternatives to BPS payments’. It may be useful to consider how important BPS payments have been to your business and aim to replace as much of that income as is practical, via:

  • SFI options

  • Other land and environmental stewardship options

  • Budgeted income from efficiencies made or new enterprises enabled by purchasing equipment via any of the capital grant schemes available, such as the Farming Investment Fund.

One way of getting your head around all the SFI options and making decisions about what is useful for your business is to consider the various options in groups.

You can make up your own groupings, or consider groupings such as ‘field boundary options’, ‘field margin options’, ‘whole or part field options’.

SFI field boundary management options

HRW1 Assess and record hedgerow condition £3 per 100 metres – for each side.

HRW2 Manage hedgerows £10 per 100 metres – for each side.

HRW3 Maintain or establish hedgerow trees £10 per 100 metres – for both sides.

SFI field margin options

AHL4 4m to 12m grass buffer strip on arable and horticultural land - £451 per hectare.

IGL3 4m to 12m grass buffer strip on improved grassland - £235 per hectare

SFI whole or part field options

AHL1 Pollen and nectar flower mix - £614 per hectare.

AHL2 Winter bird food on arable and horticultural land - £732 per hectare.

AHL3 Grassy field corners and blocks - £590 per hectare.

IGL1 Take improved grassland field corners or blocks out of management - £333 per hectare.

IGL2 Winter bird food on improved grassland - £474 per hectare.

SAM1 Assess soil, test soil organic matter and produce a soil management plan - £5.80 per hectare and an additional payment of £95 per agreement.

SAM2 Multi-species winter cover crops - £129 per hectare.

SAM3 Herbal leys - £382 per hectare.

IPM2 Flower-rich grass margins, blocks, or in-field strips - £673 per hectare.

IPM3 Companion crop on arable and horticultural land - £55 per hectare.

IPM4 No use of insecticide on arable crops and permanent crops - £45 per hectare.

NUM2 Legumes on improved grassland - £102 per hectare.

NUM3 Legume fallow - £593 per hectare.

LIG1 Manage grassland with very low nutrient inputs (outside SDAs) - £151 per hectare.

LIG2 Manage grassland with very low nutrient inputs (SDAs) - £151 per hectare.

SFI additional payments available

SFI management payment £20 per hectare up to the first 50 hectares entered into land management based SFI actions (so not for ‘agreement level’ options such as Nutrient or IPM management plans), per SBI. (£1,000 maximum)

NUM1 Assess nutrient management and produce a review report - £589 per year.

IPM1 Assess integrated pest management and produce a plan - £989 per year.

MOR1 Assess moorland and produce a written record - £10.30 per hectare and an additional payment of £265 per agreement.

Additional common land payment (if a group of 2 or more people apply for an SFI agreement on common land) - £6.15 per hectare.

A few more points

  • Pages 14-18 of handbook summaries where options can and cannot be located.

  • All ‘plan options’ need to be completed within the first 12 months of the 3 year agreement.

  • SAM1, pays you to do what you need to do anyway under the ‘Farming Rules for Water’ in a slightly glorified way. MOR1 is the equivalent option for land above the moorland line.

  • The IPM plan (IPM1) can be as complex or simple as you want it to be. It does need to involve a person who is on the BASIS professional register and has the BASIS Certificate in Crop Protection though.

  • Similarly, the Nutrient Management Plan (NUM1) needs to involve a person who is on the BASIS Professional Register and is a FACTS Qualified Adviser. The annual payments offered include for an anticipated financial cost for this.

  • The hedgerow management options HRW1 and 3, effectively pay you for assessing hedges and managing hedgerow trees even if you are already being paid to manage hedges via stewardship option BE3. If not, then you can also add in SFI option HRW2 and get paid for hedge trimming that you’ll be doing anyway.

  • You can only apply for the management of hedgerow trees option if you have control of both sides of a hedge.

  • Currently, 4-12 metre buffer zones are additional to the protection zones required under cross-compliance rules or buffers required for other statutory reasons.

A brief example of how option payments can stack up

1,000 metres of hedges (all options taken for both sides) - £360 per year.

60 ha of soil management - £348 + £95 per year.

50 ha of overwinter covers - £6,450 per year

50 ha of companion crops - £2,750 per year.

10 ha of buffer strips - £4,510 per year.

A nutrient management plan - £589 per year.

An IPM plan - £989 per year.

SFI management fee for 50 ha - £1,000

In theory, all these options could be accommodated on 60 ha of land.

Total income - £17091 per year. Equivalent to £284.85 per hectare.

As with most things, you do have to do something to get paid. Even BPS payments required land to be kept in good agricultural and environmental condition.

Although some options will effectively pay you for things you may well be doing for no income presently; others will involve some expenditure. However, acceptable maintenance and input costs can vary widely, and establishment costs are often not annual – payments are.

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