SFI Update Feb 2026

Defra has released details of the Sustainable Farming Incentive offering for 2026 – ‘SFI26’.  This includes opening dates, capping at £100,000, a reduction in the number of Actions from 102 to 71 and a change in some payment rates.  Below we summarise the details.

Eligibility and Application Windows

SFI26 will be rolled out in two stages.

• Window 1 – will open in June (no exact date has been given yet) for about 2 months, depending on budget uptake.  This will be for ‘Small Farms’- less than 50 hectares and also for those without an ‘RPA administered ELM revenue agreement’.  These are defined as;
  • previous versions of SFI
  • Countryside Stewardship Mid Tier (CSMT)
  • old and new versions of Countryside Stewardship Higher Tier (CSHT), and
  • Higher Level Stewardship (HLS).
• Window 2 – will open in September 2026 for all farms, again no exact date is given or end date, which will also depend on budget uptake.

Under both Windows there will now be a minimum threshold of 3 hectares.  This has been set following discussions with the sector and to reflect the recommendation made by Baroness Batters in her recent Farming Profitability Review.

Limits

• Capping:  Defra has said no SFI26 agreement can be worth more than £100,000.  This suggests that if a farmer already has an ELM agreement, the amounts will not be added together.  This amount is probably higher than we expected.
• One Agreement:  not surprisingly, each farm business can have only one SFI26 agreement – we expect this will be based on SBI number. 
• Rotational Actions:  in a change to previous rules, agreement holders will not be able to increase the area or value of rotational actions beyond what they included in Year 1.  They will still be able to move rotational actions between fields to match their crop rotation and they will also be able to reduce the area in Year 2 and increase again in Year 3 – as long as they do not go above the Year 1 level.  Interestingly the guidance says ‘area or value’ could this mean if payment rates increase, the area has to decline? 
• 25% Area Cap:  AHW7: Enhanced overwinter stubble will be added to the existing 25% area limit cap.  This now covers 10 actions.  These actions cannot be done (individually or in combination) on more than 25% of the total agricultural area of the farm.  This is to prevent too much land being taken out of production.

Payment Rates

Some of the payment rates have been adjusted, this includes both increases and decreases.  Defra has said the revised payment rates still follow the established approach used across SFI, based on ‘income foregone plus costs’.  The Annual Management Payment (£2,000 in Year 1 and £1,000 in Years 2 and 3) has been removed for SFI26 agreements.

Payment rates are being reduced for the following Actions:

• CSAM3: Herbal leys from £382 per Ha to £224
• CAHL2: Winter bird food from £853 per Ha to £648
• CNUM3: Legume fallow from £593 per Ha to £532

Defra has said these are being made because initial payment rates for these actions were set too high.  This made it too attractive to take highly productive land out of food production.  It has said it is recalibrating them to ‘reflect current margins and to support, not undermine, food production’.   Importantly these payment reductions will not apply to existing agreements, only to new SFI26 agreements.

Payments rates are being increased for some moorland actions;

• UPL1: Moderate livestock grazing on moorland – £35 per Ha (increased from £20)
• UPL2: Low livestock grazing on moorland – £89 per Ha (increased from £53)
• UPL3: Limited livestock grazing on moorland – £111 per Ha (increased from £66)
• UPL8: Shepherding livestock on moorland (remove stock for at least 4 months) – £74 per Ha (increased from £43)
• UPL10: Shepherding livestock on moorland (remove stock for at least 8 months) – £102 per Ha (increased from £48)

In contrast to the reductions, the uplift will apply to existing SFI agreements as well as new SFI26 agreements.  Defra has said this is to ensure upland farmers are properly compensated given recent increases in livestock prices.

SFI26 Actions

There will be 71 Actions available in the SFI26 offer, down from 102 available under SFI24.  Defra states it has removed those Actions which have low uptake or those that delivered less for food production, the environment, or its wider environmental targets and has prioritised Actions that offer strong value for money and contribute to the government’s Environmental Improvement Plan (EIP) targets for water quality and biodiversity.   As expected, all the ‘planning’ Actions have been removed  – Soil Management Plan, IPM Plan, Nutrient Management Plan.  In a Blog post Defra lists all the Actions, those that are available and those that have been removed, along with the payment rates, these can be found at – https://defrafarming.blog.gov.uk/2026/02/24/sfi26-details-definitions-and-what-to-expect/?unapproved=42628&moderation-hash=61e131cb4f1d707d4f00f1704ff303cf#comment-42628.

In an effort to make the scheme simpler, Actions with a 5-year duration will become 3-year Actions in SFI26.  This change will make these elements more accessible for short-term tenant farmers.  In addition farmers applying for the SFI26 offer will only be able to apply for a Base Action and its Supplemental Action together, in the same agreement, at the same time – previously Supplemental Actions could be added on.  This always seemed strange as it is unclear what happens when the Base Action finishes earlier; some Supplemental Actions were for 5-years when the Base was for 3-years.

Defra hopes that by introducing these changes it can ensure that more farms are able to participate and benefit in SFI and they will also help to meet the Environmental Improvement Plan goal of doubling the number of farms delivering for wildlife.  It has said the ‘core design of SFI will provide a stable framework for the rest of this Parliament, though we expect to make refinements and improvements where we can’.

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