SFI 2026: What Farmers and Rural Property Owners Need to Know

The Sustainable Farming Incentive ('SFI') has had a turbulent few years. After an abrupt closure to new applications in early 2025, the scheme is now relaunching with the first application window now imminent.

What Is SFI?

Put simply, SFI pays farmers and land managers to farm in a more sustainable way. 

Rather than receiving money simply for owning or occupying land — as was the case under some previous schemes  — farmers are now paid to take specific, practical actions that benefit the environment and support long-term food production. Those actions might include improving soil health, protecting and restoring hedgerows, reducing the use of pesticides and chemical fertilisers, creating habitats for farmland wildlife, managing moorland more sensitively, or protecting watercourses from pollution. Each action has its own payment rate, and farmers can choose the combination that best suits their land and their farming system. 

Crucially, SFI is designed to sit alongside food production, not replace it — the expectation is that farmers continue to grow food whilst also delivering these wider benefits. 

When Does SFI Open and For Whom?

The 2026 scheme is phased across two windows. 

Window 1 opens on 30 June 2026 and is reserved for smaller farm businesses — those with up to 50 hectares and for farms that do not already hold an Environmental Land Management revenue agreement. Before the full rollout, a small number of eligible Window 1 farmers will be invited to apply from around 18 June, to test and refine the application service in a controlled way. 

Window 2 follows in September 2026 and will be open to all eligible farmers and land managers.

To be eligible, applicants must now hold at least three hectares of agricultural land — a new threshold introduced with the aim of ensuring that funding is directed towards active farming businesses rather than developers or passive landowners.

The 2026 offer is considerably leaner than its predecessor, having been reduced from 102 to 71 available actions. The actions that have been retained span fourteen themes, including soils, hedgerows, moorland, buffer strips, farmland wildlife, and organic farming, with Defra having prioritised options that demonstrate genuine value for money and contribute to water quality and biodiversity targets.

Obligations Under SFI

Entering an SFI agreement is a meaningful legal commitment. The agreement is legally binding between the participant and Defra. 

Participants must maintain management control of all land entered into the agreement for its entire duration — typically three years — and must submit an annual declaration each year to confirm compliance with the agreement's obligations, within the final two months of each agreement year. Supporting evidence of compliance must be kept for at least seven years from the end of the agreement.

Payments Under SFI

Payments are made quarterly — participants do not need to submit a separate claim. Each farm business may hold only one SFI 2026 agreement, and annual payments are subject to a cap of £100,000. Notably, the management payment that previously contributed towards the administrative costs of participating in the scheme has been removed for the 2026 offer. Payment rates have been rebalanced across the scheme: upland and moorland actions have seen increases, whilst some widely-used arable options — including herbal leys and winter bird food — will attract lower rates for new agreements, though existing agreement holders retain their current rates.

Selling or Leasing Land Subject to an SFI Agreement

Where land that forms part of an SFI agreement is sold, leased or otherwise transferred, the seller/ landlord/ transferor will cease to hold management control of that land and must promptly notify the Rural Payments Agency in writing. The Rural Payments Agency will not in that scenario usually allow you to transfer the SFI agreement and the affected land parcels may need to be removed from the agreement. Depending on whether the required actions and annual declarations have been completed for the relevant year, the outgoing agreement holder may be required to repay some or all payments already received in respect of that land.