Review of The Sustainable Farming Incentive

The recent announcement confirmed that the 2022 SFI application window is now closed and those that signed up for the SFI 2022 will be contacted by the Rural Payments Agency (RPA) to have their options explained.  DEFRA reiterate their commitment that the early adopters will not lose out as the scheme develops further. It is expected that the early adopters will fully benefit from improvements in the 2023 offer.

One key difference between the 2022 SFI Standards and the 2023 SFI Actions is the ability to ‘Pick and Mix’ from the 23 Actions on offer; the 2022 version provided ‘packaged’ Standards with differing ambition levels but with the requirement to carry out all Actions within the Standard to receive the payments. This proved harder for some land managers than initially envisaged and the payment rate was not attractive in many cases.

There will also be the ability to ‘stack’ different SFI Actions on the same parcels of land and to also have CSS Options in the same parcel if these Actions and Options are compatible and not offering the same aims. For example, SFI Action ‘AHL2 – Winter bird food on arable and horticultural land’ cannot be in the same place as CSS Option ‘AB9 – Winter Bird Food’.

The online application tool will calculate what land is eligible for the area-based SFI Actions chosen for each parcel. Although this may seem easier than old style agreements, it is vital that the digital maps are up to date since the land use code declared under the BPS 2023 application will be used. Prior to August it is key for land managers to double check the field boundaries and land use codes and notify the RPA of any changes required.

Common land will have an additional payment of £6.15 per hectare land entered into its own SFI Agreement. The payment is available to single entities involving a group of 2 or more people entering common land into the SFI and aims to offset the cost of administrating an SFI agreement on common land.

The additional annual ‘management’ payment of up to £1,000 will continue to be on offer for each farm business. This is to recognise the management and administrative costs of entering into and then managing an SFI agreement. The exact payment will be based upon £20 per hectare on the first 50 hectares entered, this does exclude land under IPM1 and NUM1 (details below).

The application window, when fully open, will be rolling rather than a fixed application deadline; agreements will usually start on the 1^st day of the month once accepted, and payments will be made quarterly rather than annually. An annual declaration will be made, but applicants can complete an ‘upgrade request’ on the 1^st and 2^nd anniversary of their current agreements. This is a positive change compared with the current rigid CSS system; however, applicants will not generally be allowed to permanently ‘downgrade’ existing agreements unless a specific set of circumstances are met; agreements will be reviewed on a case-by-case basis. The SFI 2023 has an element of flexibility compared with CSS in that areas of rotational Actions can be amended in years 2 and 3; the year 1 area can be increased or reduced (as long as the amended area is at least 50% of the area initially entered).

The RPA claims there will be a change of approach to inspections, suspected breaches, and breaches which will be a far cry from the old system, with land managers given the opportunity to remedy issues and an indication of improved communication with ‘inspectors’, now known as an ‘Authorised Person’. There will be offers of guidance and advice on how to remedy a breach before determination of the issues. There will be no additional financial penalties and ‘Authorised Persons’ are keen to work with landowners to get the best out of each agreement; however, this new approach has obviously yet to be seen in action.

As previously mentioned, the online application process promises to be a simpler exercise; however, some applicants are likely to prefer to rely on an expert advisor to assist. Correct mapping will be imperative to maximise the eligibility of the land and the removal of the annual BPS application means this is no longer a routine annual exercise.  

Although we welcome the flexibility of how to complete the action and the guidance - i.e. ‘it is up to you how you complete this action, as long as you do it in a way that can be reasonable be expected to achieve these action aims’ - it will be a matter of interpretation as to whether the action’s aims are met. It will be more vital than ever to provide evidence showing what has been done to complete the action (for example, seed receipts, field operation records, expert reports or additional surveys, photographs, etc.)

Unlike Countryside Stewardship agreements, it will not usually be possible for SFI agreements to be transferred to another person. The RPA will consider on a case-by-case basis instances whereby there is a ‘change of circumstances’ both within and outside your control and will make an individual decision. However, they will need to be notified in writing of the change of circumstance as soon as reasonably practicable and preferably within 8 weeks of being able to do so. 

During these summer months, many farmers or farm managers are busy with harvest or livestock management and then into establishing the next crops, time is precious, especially when there is a CSS application deadline. It is not just a question of reading the 150 pages of the recent Handbook, but also the extensive Countryside Stewardship Guidance online and the Environmental Land Management Update (January 2023) publication which sets out further details of future schemes. The Government’s aim is that SFI 2023 is a simple offer. However, from our initial review of the Handbook and consideration of the various Actions available, in particular the interaction with other schemes, we beg to differ.