What we know so far: The 2026 updated Sustainable Farming Incentive (SFI) Scheme

The Sustainable Farming Incentive (SFI), designed to reward environmentally sustainable farm practices, is set to return in a revised form in 2026 following the closure of the current SFI offer to new applications in March 2025. Details are still unclear, but the Farming Minister, Dame Angela Eagle, speaking at the Environment, Food and Rural Affairs (EFRA) committee on 16th December, gave some early indications as to the form the new scheme might take.  

• The Minister has suggested that there will be a simplified application process, although this is promised by Defra in almost every new agri-environment scheme. 
• The Minister confirmed that she expected the scheme to go live no earlier than April 2026, which corresponds with the new financial year. This suggests that budget constraints will remain a challenge, and there may be limited funding available for new applications.  
• The scheme may be targeted towards smaller farms, with the Minister raising concerns that a disproportionate share of funding in the current scheme goes to a small number of large businesses. Caps or limits on funding may be introduced as a result.  
• The Minister has also advocated for a less “piecemeal” approach, and she also stated that Defra believed that it had provided too much funding for some actions such as herbal leys. The new approach remains unclear, but we could see more actions becoming area-limited, or the area limits and payment rates reduced, or even a return to seeing applicants subscribing to ‘packages’ of actions rather than individual options. 
• The Minister has also suggested that there will be more transparency regarding uptake and the remaining budget for the scheme in an attempt to avoid the sudden closure of the scheme as in March 2025.  

Further to the Farming Minister’s comments before Christmas, on Thursday 8 January, Environment Secretary Emma Reynolds spoke to the Oxford Farming Conference, and confirmed that there would be two application windows for the SFI scheme: the first from June prioritising smaller farms and those without an existing agreement, followed by a second round from September for wider applications. 

Whilst much of the detail regarding the new scheme is still unclear, these comments do give an early indication of the route Defra are considering for the new scheme. Budgets are likely to remain tight, and so applicants will need to be prepared to apply early and have a good idea of what actions will suit their holding.  

We will continue to watch developments closely and provide updates as more detailed guidance and application windows are announced. In preparation for the scheme opening, we would strongly encourage those interested in applying to make sure their RPA maps are up to date. This will prevent any delay when the application window opens.

If you want to be added to the list to be notified when the scheme opens, or want help with your RPA mapping, please get in touch with our Rural Professional team.