Defra's sudden announcement that the Sustainable Farming Incentive (SFI) will close for new applications has caused a huge earthquake, but what happens next?
The SFI has proven to be very popular, with more than 37,000 multi-year agreements currently active, covering over half of all farmed land in England.
The post-Brexit scheme has encouraged farmers to adopt environmentally friendly practices, with participation levels leading to the full allocation of the program's budget.
But the sudden and unplanned nature of the scheme's closure, announced by Defra on Tuesday evening (11 March), has left the industry with plenty of questions.
In this article, levy organisation AHDB explains what changes have been announced and what the next steps are for farming businesses.
What changes have been announced?
While new applications are currently on hold, existing agreements remain in place, and the government said it would introduce a "new and improved" SFI in the future.
Because so many farmers have joined the scheme, the government said it had now reached the limit of its farming budget for it.
AHDB analysis shows that the farming budget has been significantly eroded by farm input inflation, which, in turn, means Defra has now stopped accepting new applications.
However, all existing agreements will continue, and farmers who have already applied and are eligible will still be accepted into the program.
What does this mean for farmers?
If you have an SFI agreement, nothing changes. You will continue to receive payments as normal under the terms of your agreement. In many cases, this will continue for another three years.
If you have been offered an agreement but haven't accepted yet, you will need to accept your SFI agreement offer within 10 working days of it being offered. If you don't, the offer may be withdrawn.
If you submitted an SFI application before applications closed but haven't received an offer yet, you will be offered an agreement, provided your application is eligible.
If you started an SFI application but did not submit it before applications closed, you will not be able to submit your application now.
The only exceptions are for a small group of farmers who were blocked from submitting their applications due to a system fault or had requested 'assisted digital' support from the Rural Payments Agency to apply.
This scenario also covers ex-SFI pilot farmers whose pilot agreement has already ended but haven't applied for the full SFI 2024 offer on land which was in their Pilot agreement.
If you are in the SFI pilot, you will be able to apply when your pilot agreement ends. If your pilot agreement has already ended but you haven't applied for the expanded SFI offer yet, you will still be able to apply.
What are the next steps?
The government said it planned to provide more details about a reformed SFI offer later this year, with information to follow the official government Spending Review, in late spring.
AHDB said: "Any new scheme is reported to be aimed at supporting farmers, benefiting nature, and targeting public funds effectively towards priorities for food, farming and nature.
"However, until we see details of any new scheme, we have no sight of potential budget size or scope."
