After months of uncertainty following the abrupt closure of the Sustainable Farming Incentive (SFI) in March 2025, English farmers have finally been given clarity. Defra has announced a reformed SFI offer for 2026, and for the first time in a while, it appears that feedback from the farming community has genuinely been taken on board.
The announcement has been closely examined across the industry, and while caution is still sensible, there are real reasons for measured optimism. Many of the long-standing frustrations around access, fairness, and complexity appear to have been addressed, particularly for small farms that have often struggled to benefit from previous schemes.
You can read Defra’s full announcement on the official Defra Farming Blog:
https://defrafarming.blog.gov.uk/2026/01/08/the-new-sfi-offer-for-2026/
What Has Changed in the New SFI Offer?
The Sustainable Farming Incentive has been redesigned around three clear principles: simplicity, fairness, and transparency. These principles directly reflect concerns raised by farmers over recent years, and practical improvements are visible in the new structure.
A More Streamlined, Practical Approach
Defra is reducing the number of available SFI actions while retaining enough choice to suit different farm types and systems. Importantly, the emphasis has shifted towards actions that work alongside food production, rather than replacing it.
This matters. One of the strongest criticisms of earlier environmental schemes was that too much productive land was being taken out of use. Defra has acknowledged this concern and is reviewing limits on how much farmland can be allocated to non-productive actions. Where ten actions were previously classed as “limited area”, further caps are now being considered to ensure environmental benefits complement, rather than compete with, farming.
Payment rates for high-uptake actions that remove land from production are also under review, helping rebalance the scheme towards productive, sustainable farming rather than land withdrawal.
Small Farms and Fair Access Finally Being Prioritised
This is arguably the most significant shift in the 2026 offer.
It has been publicly acknowledged by Farming Minister Dame Angela Eagle that 25% of SFI funding was going to just 4% of farms under previous arrangements. That imbalance clearly wasn’t working for the wider farming community.
The reformed scheme explicitly aims to widen participation, with small farms given priority access. This reflects a growing recognition that sustainable farming at all scales is essential if national environmental targets are to be met.
The government has set a goal of doubling the number of farms providing year-round wildlife resources by December 2030, compared with 2025 levels. That target simply cannot be achieved without meaningful support for smaller operations.
Clear Application Windows and Transparent Budgets
One of the most welcome changes is the introduction of two clearly defined application windows in 2026.
June 2026 Application Window
Priority access for small farms
Open to farmers without existing Environmental Land Management (ELM) agreements
Budget allocation to be announced in advance
September 2026 Application Window
Open to all farmers
Separate budget allocation
Regular updates on subscription levels
Defra has committed to providing advance notice as budgets fill up and has given assurances that application windows will not be closed without warning—a direct response to the frustration caused by the sudden suspension of SFI in March 2025.
Why Sustainable Farming Now Matters for Farm Viability
England’s agricultural transition represents a fundamental shift away from land-based subsidies towards payments for environmental outcomes. With the Basic Payment Scheme now reduced to a maximum of £600 for 2026 and 2027, environmental schemes such as SFI have become central to farm viability.
Sustainable farming is not about choosing between food production and environmental care. It is about protecting soil health, improving water quality, enhancing biodiversity, and building resilience, while maintaining productive agriculture.
Soil Health and Long-Term Productivity
The business case for soil health has been clearly stated by government ministers. Healthy soils retain more water, require fewer inputs, and support more consistent yields over time.
Evidence from working farms using cover crops, reduced tillage, and organic matter improvements shows measurable gains in soil structure and crop resilience. These are not theoretical benefits—they are being delivered on farms across England today.
June 2026: A Key Opportunity for Small Farms
The June application window represents a significant opportunity for small farms that have historically struggled to access environmental funding.
While Defra has yet to publish a final definition of “small farms”, the Tenant Farmers Association has stressed that eligibility must reflect differences between sectors and prioritise active, working farms.
Several realities underpin this prioritisation:
Limited administrative capacity on smaller farms
Cash-flow pressures following the SFI closure
High environmental value delivered by diverse, small-scale systems
Wider rural economic benefits, including local employment and skills
What Farmers Can Do Now
Although full scheme details will be published closer to the application dates, preparation can start now.
For Small Farms (June Window)
Review field boundaries, soil types, habitats, and water features
Gather baseline soil tests, field records, and photographs
Identify SFI actions that complement existing systems
Subscribe to updates from the Defra Farming Blog
For All Farmers (September Window)
Review previous SFI or Countryside Stewardship actions
Consider how new limits on land removal may affect plans
Assess how SFI fits alongside other schemes and capital grants
Official guidance will be published here:
https://www.gov.uk/guidance/funding-for-farmers
Additional Funding Supporting Sustainable Farming
SFI does not sit in isolation. Other schemes supporting sustainable farming include:
Countryside Stewardship Higher Tier
https://www.gov.uk/government/publications/countryside-stewardship-higher-tierCapital Grants
https://www.gov.uk/guidance/capital-grants-2024Farming in Protected Landscapes
https://www.gov.uk/guidance/farming-in-protected-landscapesFarmer Collaboration Fund
https://www.gov.uk/government/publications/farmer-collaboration-fund
The Future of Sustainable Farming in England
The reformed SFI is more than a funding scheme. It is a central part of England’s long-term agricultural transition. With around 70% of UK land under agricultural management, national goals for biodiversity, carbon reduction, and water quality depend on how farms are run.
Nature-friendly farming has been repeatedly shown to support both environmental recovery and business resilience, a point reinforced by organisations such as The Wildlife Trusts.
By prioritising small farms and simplifying access, the 2026 SFI offer signals recognition that farm size diversity strengthens the resilience of the agricultural sector.
Challenges That Still Remain
Despite the positive changes, challenges remain. The gap between the June and September windows may create timing issues for establishing certain habitats, and questions remain around budget allocation between windows.
With approximately 44,500 existing SFI agreements covering around half of England’s farmed land, further uptake will be needed to meet national targets. The success of the reformed scheme will depend on continued transparency and adequate funding.
Moving Forward with Confidence
The new SFI offer for 2026 represents a genuine reset for sustainable farming support in England. By prioritising small farms, simplifying processes, and restoring trust through transparency, Defra has laid stronger foundations for farmer engagement.
For many farm businesses, particularly smaller operations, the June application window offers a valuable opportunity to secure funding that supports both environmental stewardship and long-term viability.
Staying informed through official channels such as the Defra Farming Blog, the Farming Advice Service, and NFU guidance will be essential:
Sustainable farming is a collective effort. With clearer rules, fairer access, and genuine responsiveness to farmer feedback, the reformed SFI has the potential to become a scheme that works for farms of all sizes.
Last updated: January 2026. Always refer to official Defra guidance for the most current information.
