Farmers left in the lurch as DEFRA’s flagship funding scheme abruptly closes

Five years after introducing the principle of 'public money for public goods' ,the abrupt closure of the SFI scheme raises serious doubts about DEFRA’s ability and commitment to genuinely supporting farmers through the transition to agroecology. How did we end up here, and what does this mean for nature-friendly farmers and the UK's broader environmental ambitions? 

Flagship nature-friendly farming scheme now closed to applications 

On 11 March DEFRA announced that it would no longer be accepting new applications to the Sustainable Farming Incentive (SFI) scheme. Existing agreements will be honoured, and applications already submitted will be processed. Anyone yet to submit has been shut out. Details of a revised SFI offer will be set out following the Spending Review, including when it will open for applications. 

SFI is one of three Environmental Land Mangement (ELM) schemes. Following this announcement, there are currently no ELM schemes open to applications.

What are the consequences for farmers? 

The impact of DEFRA’s mismanagement is severe, with SFI’s closure having wide-ranging consequences. Tenant farmers may have been banking on SFI payments to secure their tenancies; small farms and new entrants may not have had the chance to apply, as many lack the experience that larger-scale businesses have with funding applications. Many may have wasted thousands on farming advisory services preparing applications that are now redundant.

The timing couldn't be worse: recent changes to inheritance tax, ongoing uncertainty around government support, and one of the worst harvests on record have already pushed farmer confidence to an all time low. 

Why has DEFRA paused SFI? 

The closure of the scheme has blindsided farmers. The decision to close the scheme overnight has been defended by the DEFRA team, who claim that the budget has been “successfully allocated”.  In their statement, DEFRA reasoned that SFI needed to be paused: 

“Now is the right time for a reset: supporting farmers, delivering for nature and targeting public funds fairly and effectively towards our priorities for food, farming and nature.”   

However, the last minute decision exposes deep systemic failures in the SFI scheme's design. DEFRA had repeatedly assured farmers they would receive at least six weeks’ notice before any significant changes. This sudden reversal is a breach of trust, pulling the rug out from under thousands of farmers who were planning to enrol the SFI this year. 

How did this happen? 

DEFRA’s scheme has faced fundamental challenges from the start. Since pilots began in 2021, it has come under much scrutiny about whether it is offering value for money.  

Over time, the SFI has been diluted from its original iterations to make a scheme which prioritised uptake and flexibility, resulting in a scheme which conflated participation numbers with meaningful environmental improvement. With no clear spending caps in place, the scheme inevitably exhausted its budget prematurely, diverting limited funds away from tried and tested schemes which deliver the most significant environmental benefits, like Countryside Stewardship Higher Tier. The scheme clearly needed reform, but the timing, manner, and lack of transparency in this decision is a serious case of mismanagement from government. 

Understandably, this has provoked widespread dismay and condemnation in the farming sector. If clearer expectations on the maximum SFI budget had been set from the outset, DEFRA could have given more notice of the closure. This would have saved wasted effort (not to mention government-funded advice) on applications which will now not be considered. 

DEFRA ministers and the ELM team must learn from this error of judgement and consider measures to manage applications within future budgets, such as introducing caps on the amount of money allocated per agreement. 

Is the government justified in halting the scheme? 

Let’s be clear: the SFI scheme needed to be improved. However, the timing of this decision, the nature by which it has been taken, and the way that it has been communicated leaves farmers in the lurch. By refusing to admit that they’ve managed this poorly, the government has made a choice to save face, instead of owning up to the shortcomings of how this scheme has been delivered. 

A sudden halt to SFI applications benefits no one. The unexpected announcement has severely undermined farmers’ trust in the government. At a time when farmer confidence is at an all-time low, the government ought to be proactively looking for ways to remedy that relationship. A lack of transparency and clarity around funding means that farmers cannot plan their business and may mean that they decide not to participate in other agri-environment schemes. 

Will White, Sustainable Farming Coordinator at Sustain, said,

“A full five years into the farming transition, farmers looking to transition to more nature friendly forms of farming and be fairly paid for delivering public goods are now left wihout any schemes available to apply to.  Unless the government radically changes its approach, farmers' faith in ELMs will continue to erode. To restore trust, it is absolutely crucial that the next spending review provides meaningful support for nature-friendly farmers."

What should the government do now? 

The high level of demand for SFI has sent a clear message: farmers want to be part of the transition to nature-friendly farming. Sustain and its alliance members urge the government to do more to support nature-friendly farmers. 

• The Treasury should prioritise farming in the upcoming Spending Review, by increasing the annual agricultural budget to £5.9bn - the amount required to meet legally binding environmental targets 
• Expand plans for supply chain fairness reforms and introduce them with greater urgency, to ensure farming businesses remain viable 
• Provide a clear timeline for future ELM schemes application windows: this means sticking to the promised schedule for Higher Tier schemes in summer 2025, and allowing a wider range of farms to apply (applications are currently only open by invitation).  
• Increase transparency in communications from DEFRA. Going forward, farmers need clear expectations about what funding is available for each of the schemes. 
• Ensure delivery of ELMs is more strategic in future. For example, caps could be set on the amount of funding each applicant can receive, to ensure payments are distributed fairly. 
• Address financial barriers to the agroecological transition in the 25-year Farming Roadmap 

Take action: Sign the petition for a bigger nature-friendly farming budget.

Join the Food in Our Hands march on 26 April 2025.

If you are a grower or farmer on 5 hectares or less, respond to the survey about SFI.