Sustainable Farming Incentive (SFI): What’s changed in 2026?

Following last year’s unexpected closure of SFI24, many farming businesses have been waiting for clarity on what comes next. DEFRA has now confirmed the structure of the Sustainable Farming Incentive 2026 (SFI26), promoting this as a simpler and more predictable scheme for the year ahead.

The biggest change is a streamlined action list, reduced from 102 to 71 actions, focusing on the options that are deemed to deliver the best value for food production and the environment. DEFRA has also introduced a new £100,000 annual cap per farm business, alongside a rule of one agreement per business, aimed at spreading funding more fairly across the sector.

Eligibility requires a minimum of 3 hectares of agricultural land, with applications opening in two windows:

• June 2026 for farms of 3–50 hectares or those without an existing Environmental Land Management (ELM) revenue agreement. Further details on this are below.
• September 2026 for all farms.

DEFRA has confirmed that if you have an existing revenue agreement under previous versions of SFI, Countryside Stewardship Mid Tier (CSMT), old and new versions of Countryside Stewardship Higher Tier (CSHT), and Higher Level Stewardship (HLS), then you will not be eligible to apply within the first window.

Payment rates have been updated, with increases for some upland actions and reductions for others, such as herbal leys and winter bird food. SFI26 agreements will run for three years, offering greater flexibility than previous five-year commitments.

A key point for all applicants is that SFI26 is a budget-limited scheme, meaning application windows may close earlier than planned if the available funds are taken up. Because of this, submitting a well-prepared application promptly will be important, as the scheme will close as soon as the budget is fully allocated. DEFRA has also confirmed that it will provide clear updates as funding is committed throughout each application window, helping farmers monitor how quickly the budget is being used.

Need help?

If you’d like to discuss this in more detail, please get in touch with your usual Larking Gowen contact or email enquiry@larking-gowen.co.uk.

Andrew Whiting