The government has confirmed it will stop accepting new applications for the Sustainable Farming Incentive (SFI) scheme, a move which has sparked fury.
The sudden and unplanned nature of the scheme's closure, announced on Tuesday evening (11 March) without warning, is set to shake the industry's confidence even further.
Defra said that "every penny" in all existing SFI agreements would be paid to farmers, and outstanding eligible applications that had been submitted would also be taken forward.
The NFU called the unexpected announcement "another shattering blow" to farmers, warning that Defra was now a "failing department" as the "chaos has got worse and worse".
The post-Brexit agricultural scheme, launched by the previous Conservative government, has 50,000 farms taking part, with them delivering sustainable food production and nature recovery.
The largest of these schemes, SFI24, has more than 37,000 multi-year live agreements.
But the Labour government said that it had "inherited an uncapped scheme, despite a finite farming budget" and that "now is the right time for a reset".
"The highest ever level of participation in SFI means the maximum limit has now been reached," it said.
"Therefore, as SFI has reached its completion, the government is stopping accepting new SFI applications today."
Instead, the government said there would be a "new and improved" SFI on offer, with details to follow the Spending Review.
The NFU said the sudden announcement had bought into question Defra's transparency and its ability to deliver the post-Brexit agricultural transition.
"This is another shattering blow to English farms, delivered yet again with no warning, no understanding of the industry and a complete lack of compassion or care," said the union's president, Tom Bradshaw.
“We have had major concerns for years about whether there was the capability within Defra to deliver the agricultural transition post-Brexit.
"We have warned time and time again that large parts of the SFI were poorly designed and that the department was consistently failing to deliver it."
Mr Bradshaw said that there had been no consultation and no communication on the matter, adding that the government was overseeing "bad decisions, misdirection, promises broken and no transparency."
"There has been a total lack of the ‘partnership and co-design’ Defra loves to talk about. It is another example of the growing disregard for agriculture within the department," he said.
“The fact that ministers are actually trumpeting this as good news shows how desperately detached they are from the reality on the ground and how little they understand this industry."
The Country Land and Business Association (CLA), which represents thousands of farmers and landowners, called the announcement the "most cruel betrayal."
The body's president, Victoria Vyvyan said: "SFI was the most ambitious, forward thinking and environmentally friendly agricultural policy seen anywhere in the world - it promised a fairer future for farmers and a greener future for the world.
"Labour promised to support it, but at the first available opportunity they have instead scrapped it. It actively harms nature. It actively harms the environment.
"And, with war once again raging in Europe, to actively harm our food production is reckless beyond belief."
It follows the government's reform of agricultural property relief (APR) business property relief (BPR), announced in the autumn budget, which has triggered protests across the UK.
From April 2026, farms worth more than £1m will incur a 20% inheritance tax charge, with the industry warning that family farms would see a 'catastrophic' impact to their businesses and livelihoods.
On top of this, farmers are seeing ongoing cuts to BPS payments, low returns from retailers and worsening weather patterns.
Minister for Food Security Daniel Zeichner defended the government's SFI decision, saying it had "successfully allocated the SFI24 budget as promised."
He said: “This government is proud to have set the biggest budget for sustainable food produce in history, to boost growth in rural communities and all across the UK, under our Plan for Change.
“More farmers are now in schemes and more money is being spent through them than ever before. That is true today and will remain true tomorrow."
