SFI: Whats known so far
Wed 12 Jan 2022
Last month (December), Defra finally set out how the Sustainable Farming Incentive (SFI) will work this year (2022).
We made our initial comment when the policy paper was published which was, broadly, welcoming of the fact that it had, at least, become available.
But, frustratingly, we still await the finer details ahead of the anticipated opening of the application window this spring.
The headline SFI details so far are:
- Agreements will be for three years & payments will be quarterly
- It will operate at land parcel level
- Agreement holders will need to have management control of the land
- It will be compatible with other private sector schemes
- Focus is on soils +…
SFI agreements will last for three years with participants having the flexibility to amend them every 12 months from the start date. This affords the opportunity to increase coverage - and ambition - over time, through adopting any future, additional SFI standards.
Farmers will be paid in quarterly instalments from the start date of the SFI agreement in an effort to assist with cashflow management throughout the year.
The scheme will operate at land parcel level, with farmers able to pick and choose which of their fields to include rather than having to enter their whole farm. With no minimum or maximum amount of land that must be entered, this provides a way of entering into the new scheme without the need to go ‘all in’ from the beginning.
SFI agreement holders will need to have management control of the land for the duration of their three year agreement. There is the provision to withdraw the land from the agreement at the 24 month mark with no penalty or recovery of earlier payments applied.
As a transitional measure in 2022, farmers having between two and three years left on their tenancy will still be able to enter land into the SFI.
However, those with less than two years left on their tenancy or having access under a licence arrangement should not apply, as the environmental benefit over any period less than two years is not deemed worthwhile.
As it stands, land that is already within a private sector scheme - such as carbon trading or biodiversity net gain credits - should be able to enter land into a SFI, subject to any rules and regulations of schemes in situ.
Last autumn, we correctly anticipated the 2022 SFI Standards having a particular focus on soils with payments being made for actions that go beyond good practice and regulatory requirements.
As published in December’s SFI paper, the arable and horticulture soils and improved grassland soils standard can be chosen at an introductory or immediate level.
We also understand advanced levels will be added in 2023.
The introductory or immediate levels for arable and horticulture soils standard sees farmers being rewarded with payments of £22/ha (introductory) and £40/ha (intermediate).
Summary of arable and horticultural soils standard in 2022
| Introductory Level | Intermediate Level |
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The improved grassland soils standard can again be chosen at an introductory or immediate level, with payments of £28/ha (introductory) and £58/ha (intermediate).
Summary of the improved grassland soils standard in 2022
| Introductory Level | Intermediate Level |
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The other environmental standard will be for moorland and rough grazing standard but this is not something to concern our client base in Leicestershire, Rutland and Lincolnshire.
This will be available to all farmers eligible for BPS with more than 50 pigs, 20 sheep or 10 cattle. The rates per review will be £684 for pigs, £436 for sheep, £522 for beef cattle and £372 for dairy cattle.
In addition to these three environmental ‘soil’ standards arriving this year through the SFI scheme, as published to date, there is also the annual health and welfare review.
This sees the SFI fund a yearly farm visit from a vet or vet-lead team. This will be available to all farmers eligible for BPS with more than 50 pigs, 20 sheep or 10 cattle. The rates per review will be £684 for pigs, £436 for sheep, £522 for beef cattle and £372 for dairy cattle.
With larger BPS percentage reductions kicking, the introduction of the SFI provides farmers with at least some ‘clawback’ to replace a proportion of that lost income.
It also provides farmers with the opportunity to start implementing environmental measures and familiarise themselves with the scheme at an early stage in the process, with the ability to then raise levels of ambition over the coming years.