SFI 2026

The 2026 version of the SFI will be initially targeted at smaller farms and those without an existing Environmental Land Management (ELM) agreement.  This is what has been announced by Defra Secretary of State Emma Reynolds in her speech at the Oxford Farming Conference.  She confirmed Defra will open two SFI application windows in 2026.  An initial window ‘from’ June for ‘small farms’ and also those without existing Environmental Land Management agreements.  A further window will open ‘from’ September for ‘all farms’.  There is no information on what constitutes a small farm, but Defra has said it will publish clear definitions before the first window opens.

The decision has been made to favour smaller farms (and those that missed-the-boat) in the first round of the scheme.  Whilst this may be politically expedient, it seems to make little logical sense.  If the idea of SFI is that it is a scheme to buy ‘public goods’ from farmers, rather than income support, then it should not matter whether it is a large farm or a small farm that is delivering the desired environmental outcomes.    

The Secretary of State also announced that the scheme would be ‘simpler and more focused’.  This includes having fewer actions, with the Minister citing 90% of spending is currently on fewer than 40 of the 102 actions.  here is no indication of which actions might be removed.  There will also be other changes to the actions.  In an accompanying Blog post (https://defrafarming.blog.gov.uk/2026/01/08/the-new-sfi-offer-for-2026/) there will be ‘streamlining’ of the scheme through;

• limiting how much land can be put into actions that take land out of production.  Previously, there were 10 ‘limited area’ actions in SFI.  Defra has said ‘we are exploring whether more actions should be limited to a small proportion of the farm so they work alongside food production’
• reviewing payment rates for actions that take land out of production where uptake has been particularly high.

Accepting that the sudden closure of the previous round of SFI was a ‘mistake’ Ms Reynolds has said ‘there will be no more sudden unexpected closures’.  Clear budgets will be set before each window opens and regular updates will be given so claimants know when a window is close to being fully subscribed.  This will be similar to the Capital Grants offer last year, but claimants and agents will be well aware that the scheme was supposed to be available ‘all year round’ but the budget was used up in just 4 weeks as claimants ‘scrambled’ to get applications in.

In her speech to the OFC the Secretary of State said ‘Once these changes are in place, the main design of SFI will be stabilised for the rest of this Parliament. So you know what to expect in the years to come’.

In summary, we are probably not that much wiser than previously – waiting on more detail to come in almost every area.  Full scheme details have been promised before the first window opens, but with this not until June it could be some time yet before we get much clarity.

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