Tech Tuesday: SFI26: What's changed?

The Sustainable Farming Incentive (SFI) is undergoing a significant reset for 2026. Defra’s SFI26 aims to balance environmental restoration with robust food production through a more disciplined, capped, and streamlined approach.

1. New Application Windows

The no more rolling application process. This has been replaced by two distinct windows to manage the national budget:

• Window 1 (June 2026): Priority for small farms (3ha – 50ha) and those without an existing ELM agreement.
• Window 2 (September 2026): Open to all remaining eligible farmers.
• Note: Windows may close early if the budget is reached; early preparation in the Rural Payments service is vital.

2. Financial Limits & Caps

To ensure a fairer distribution of funds across family farms:

• £100,000 Annual Cap: Payments are now capped at £100k per farm business.
• Single Agreement Rule: Businesses are restricted to one SFI26 agreement at a time.
• Management Payment: The £50/ha transition payment has been removed for all new 2026 agreements.

3. Adjusted Actions & Payment Rates

The total number of actions has been trimmed from 102 to 71, focusing on high-impact practices:

• Rate Decreases: New agreements for Herbal Leys (CSAM3), Winter Bird Food (CAHL2), and Legume Fallows (CNUM3) will see significant reductions.
• Rate Increases: Upland farmers will see boosted rates for Moorland grazing and shepherding to reflect rising costs.
• Area Limits: A 25% land limit now applies to “limited area” actions, now including Enhanced Overwinter Stubble (AHW7), to keep land in food production.

4. Soil Health: From Planning to Action

The focus has shifted from “paperwork” to “physical improvement”:

• CSAM1 Removed: Payments for soil assessments and written management plans have ended. While no longer funded, soil testing every 5 years remains a legal requirement.
• Crop-Led Income: Payments are now tied directly to active soil improvement via:
  • Winter Cover Crops (CSAM2)
  • Catch Crops (SOH3)
  • Herbal Leys (CSAM3)

5. Flexibility for Tenants

To support those without long-term land security, most 5-year actions have been shortened to 3-year agreements, allowing for easier exit or rotation for tenant farmers.

Soil health payments may have changed but it is still vital to understand the land beneath your feet for optimum land management. For rapid, flexible and accurate soil testing, get in touch.