Defra change course – where does this take ELM?

What is changing? 

One of the positive steps that Defra has taken is to bring forward more Sustainable Farming Incentive (SFI) standards than were initially planned for 2023. Farmers will now be able to access six new SFI standards that will cover hedgerows, nutrient management, integrated pest management, low input grassland, improved grassland, and arable and horticultural land. This is on top of the 2022 offer that included arable and horticultural soil, improved grassland soil, and moorland and rough grazing. There is a blog post about the announcement and you can read the full detailed document on GOV.UK. 

This 2023 offer should be seen more as a starting point for farmers, rather than something that has ambition baked in, but that works as long as there is a clear strategy and plan to ratchet up ambition over the next few years. That is yet to be laid out by Defra. For example, the three levels of ambition within each SFI standard have been dropped in favour of a blanket approach to stand alone actions, so there is currently no clear ‘ladder’ of ambition being offered.

At a glance, the payment rates look reasonable, especially if farmers choose to take up multiple actions on top of Countryside Stewardship (CS). There is also this new SFI management payment (to recognise the cost of entering the scheme) set at £20 per hectare for the first 50 hectares. Plus, farmers should be able to stack an SFI agreement on top of an existing CS one if the existing CS actions are not being applied for through the SFI. However, for many farmers, it is likely that they will still experience a shortfall on their old direct payment amounts as these phase out.

The second biggest change to ELM is that Defra will discontinue the move from CS to Local Nature Recovery (LNR), and instead, evolve CS into Countryside Stewardship Plus (CSP). There have been guarantees that this does not mean the different approach anticipated in LNR will be lost. In other words, the aim to create and encourage more local landscape scale collaboration will remain and Defra will expand the offer under CSP to include more capital items and more support under Catchment Sensitive Farming (CSF).

Through this expanded SFI offer and in combination with CS, there will be a total of 280 voluntary environmental actions that farmers can choose to take. 

Examples of payment rates under new SFI standards: 

• Arable and horticultural land: £614/ha pollen & nectar mix, £451/ha 4-12m buffer strip  
• Integrated pest management: £55/ha companion cropping, £45/ha no insecticides 
• Nutrient management: £102/ha legumes in sward, £593/ha legume fallow 
• Low input grassland: £151/ha (outside SDA), £98/ha (inside SDA) 

Farmers will also be able to access funding to work with a BASIS and FACTS qualified adviser to produce an integrated pest management plan (£989 per year) and nutrient management plan (£589 per year), respectively. 

What is missing? 

To pick out some key questions (and maybe concerns), a clear one is that lack of vision and plan to integrate and move towards a more ambitious scheme over the rest of the agricultural transition period. The approach to SFI is fairly atomised and there is no obvious way that farmers will be supported to transition to more whole farm agroecological approaches (at least not anytime soon.) 

The ability of farmers to stack multiple SFI standards onto one agreement, plus a CSP agreement too, is yet to be seen in practice. Until these schemes embed whole farm approaches into its design, it is crucial that farmers are incentivised and encouraged to stack environmental actions. 

Equally, we need more than assurances that Defra will introduce more whole farm type standards to SFI in 2024/25. This includes the organic farming and agroforestry standards, as well as public engagement. On top of that, farmers and others need to see some sort of plan on how the ambition of actions within standards with be ratcheted up. For example, adding more ambitious actions like diverse cover cropping and minimum tillage into the arable and horticultural land standard, or rotational/mob grazing into the low input grassland standard. Nor has there been any clear commitment to shift lower ambition standards out of the scheme and into the regulatory baseline, overtime, as they become the new norm. The evolution of the SFI scheme, and its standards, needs a strategy.

Furthermore, this ELM announcement will provide little assurance to smaller farm businesses that Defra is seriously looking at how to make the schemes workable for them. The SFI management payment might help, but there are more fundamental barriers to the structure of payment rates, the low ambition actions, and the atomised approach of the SFI scheme. There is still the 5ha barrier that needs to be removed this year too.

Finally, while Defra has said it will do some sort of monitoring of outcomes from this changed approach to ELM, it has yet to say what that monitoring will look like. This is vital to secure continued budget from the Treasury and maintain public support for agri-environment schemes. 

Summary 

Overall, Defra will hope that the combination of the SFI management payment, more SFI standards, and flexibility to do both SFI and CS at the same time, will see an uptick in the number of farmers who enter the SFI scheme. This is crucial, as numbers are currently low, and Defra need to start showing Treasury that the scheme is accessible while also delivering environmental outcomes. 

A number of questions remain on things like stacking SFI standards and CSP agreements, how Defra will increase ambition in the medium to long-term, and if issues will be resolved around small farm participation. 

For now, this announcement is a step in the right direction, maintaining the principle of public money for public goods we have called for, with more details to come through in the next few weeks. 

Looking ahead to 2024, we hope that Defra rolls out more standards to include one on organic farming, agroforestry, and public engagement. Similarly, we want to see a clear plan come to fruition over the next few months which lays out how Defra will ratchet up ambition over the next few years.