SFI 2026 Offer Explained at the NFU Conference
- Oakbank Team
- Feb 24
- 4 min read
Updated: Feb 26
Defra has unveiled new details of the Sustainable Farming Incentive (SFI) 2026 scheme in England. Announced today at the NFU conference, the SFI 2026 offer will reopen with some significant changes, including more restricted options and a £100,000 payment cap on agreements.
At the Oxford Farming Conference in January, Environment Secretary Emma Reynolds already signalled fewer, more targeted options, highlighting that 90% of SFI spending went on fewer than 40 of the 102 available actions. Today, we know that there will be:
An annual payment cap of £100,000 on new agreements
Fewer available actions (71 in total). This is a substantial reduction from 102 options that were part of the 2024 SFI scheme, but most of the removed actions had low uptake or viable alternatives. Actions which will not be available include CHRW1 (assess and record hedgerow condition), AHW1 (Bumblebird mix), CIPM1 (assess integrated pest management and produce a plan), CMOR1 (assess moorland and produce a written record), CNUM1 (assess nutrient management and produce a review report), PRF3 (non-mechanical robotic weeding), SOH4 (winter cover following maize crops), CSAM1 (assess soil, test soil organic matter and produce a soil management plan), SOH2 (multi-species spring-sown cover crop).
One SFI 2026 agreement per farm business
No increase in rotational actions above Year 1 area. Farmers will still be able to move rotational actions between fields and change areas
Enhanced overwinter stubble (AHW7) added to 25% cap actions. These actions cannot be done (individually or in combination) on more than 25% of the total agricultural area of the farm
Adjustments to payment rates (increases will apply to existing SFI agreements, but reductions will not be retroactive):
CSAM3: Herbal leys from £382/ha to £224/ha
CAHL2: Winter bird food from £853/ha to £648/ha
UPL1: Moderate livestock grazing on moorland – £35/ha (increased from £20/ha)
UPL2: Low livestock grazing on moorland – £89/ha (increased from £53/ha)
UPL3: Limited livestock grazing on moorland – £111/ha (increased from £66/ha)
UPL8: Shepherding livestock on moorland (remove stock for at least 4 months) – £74/ha (increased from £43/ha)
UPL10: Shepherding livestock on moorland (remove stock for at least 8 months) – £102/ha (increased from £48/ha)
No offer of SFI management payment
Change to 5-year actions - these will become 3-year actions in SFI 2026
These measures have been welcomed by farmer groups such as the Tenant Farmers Association, but will limit the ambitions of some businesses to deliver on a larger scale, especially as many major Mid-Tier schemes are due to end in December. Overall, this funding alone is likely to fall short of what is required for an effective transition to nature-friendly farming.
Farmers can now start planning for the June and September application windows. At Oakbank, we will continue to support our clients with practical advice and to monitor updates as official guidance is released - call us to discuss any questions you might have.
SFI 2026 Application Windows
June 2026 - window of priority access for small farms and those without existing Environmental Land Management (ELM) revenue agreements
September 2026 - second window opens for all farms
What is a "Small Farm" in SFI 2026?
Small farms, eligible for the June 2026 application window, are defined as holdings between 3ha and 50ha registered with the Rural Payment Agency (RPA).
50ha also aligns with the previous SFI Management Payment threshold, but the Management Payment will not be part of future agreements.
England: FETF and Capital Grants Update
The Farming Equipment and Technology Fund (FETF) 2026 will open for applications on 17 March with up to £50 million. Read the FETF 2026 summary here.
New round of Environmental Land Management (ELM) Capital Grants will open in July, with up to £225 million
Wales: Sustainable Farming Scheme (SFS) Update
Meanwhile in Wales, a different but related agricultural support overhaul is underway. Wales launched its new Sustainable Farming Scheme (SFS) on 1 January 2026, set to gradually replace the Basic Payment Scheme (BPS) over the next few years. Key features of the Welsh SFS include:
Universal actions - farmers must undertake 12 "Universal Actions" - common practices including soil testing, habitat maintenance (e.g. hedgerows) and IPM, to quality for the base payment
Optional and collaborative actions - beyond the universal layer, farmers can opt into additional environmentally ambitious actions and collaborative projects to unlock further payments.
Transition period - the Welsh Government has set a transition period from 2026 to 2028 during which farmers can either join SFS or stay on tapering BPS support. BPS payments will reduce by around 40% in 2026 for those on the old scheme. By end of 2028, SFS will fully replace BPS.
Scotland: Farm Support Transition and Greening
In Scotland, the agricultural policy in a transition phase, retaining the Basic Payment Scheme with enhancements and interim measures as the “Four-Tier Future Support” framework takes shape. Recent updates include enhanced greening for 2026. Delivered mainly through Ecological Focus Area (EFA) options such as cover cropping and hedge management, Greening is part of BPS payments (~30%) for undertaking management practices that help environmental outcomes. From 1st January, the framework has been updated, with four new actions, and extended to any holding with over 15ha of arable land.
The 2026 EFA reforms are part of a broader Agricultural Reform Programme (ARP) aiming to realign farm payments with environmental and climate objectives. The 5% EFA requirement is expected to rise to 7% in 2027 as Scotland phases in more ambitious greening targets.
