Farm unions and representative bodies held a meeting with Defra minister Daniel Zeichner last week to try and mitigate the damage caused by Defra’s sudden closure of the 2025 Sustainable Farm Incentive (SFI) scheme. The lobby sought urgent clarity on the future of SFI, and more transparency about the wider Defra budget, but there has been no response from Defra as yet.
Defra’s decision last week to suspend new SFI scheme applications in England with immediate effect – and with no prior notice – was greeted with dismay and incredulity by the industry.
Defra secretary of state Steve Reed justified the move by stating the Labour administration inherited an uncapped SFI scheme from the previous government, despite a finite farming budget. He says the highest ever level of participation in SFI, with some 37,000 multi-year live agreements now in place, means that the maximum limit has now been reached. ”Therefore, as SFI has reached its completion, the government is stopping accepting new SFI applications from March 11th 2025.” However, there was no previous indication of a maximum SFI budget constraint.
Mr Reed added that existing SFI agreements will be paid in full, as will outstanding eligible applications. He also promised a “new and improved SFI with details to follow the Spending Review”, but this time with a budget ceiling.
Chairman of the cross-party Environment, Food and Rural Affairs (EFRA) committee of the House of Commons, Alistair Carmichael, described the sudden announcement as “another very regrettable decision by Defra. The abrupt halting of new applications to SFI will leave many farmers with no prospect of support to replace direct payments.
“Farmers are already under immense pressure from a perfect storm of adverse conditions. For many farmers, this latest move by the government will only add to the uncertainty and insecurity of their livelihoods and threaten their financial viability. This decision on SFI only compounds the impression that the government either does not have a grasp of the realities that farmers face or is sanguine with the possibility of farms up and down the country going out of business, their land being sold off to other entities and British farmland being lost to farming altogether.”
NFU president Tom Bradshaw described the peremptory withdrawal of the current SFI as: “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.
“There has been no consultation, no communication; 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.
“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.
“It leaves us with little choice but to see Defra as a failing department. The chaos has got worse and worse and farmers are paying the price. Bad decisions, misdirection, promises broken, no transparency and yet more financial disaster for farming.
“When the Chancellor dramatically accelerated the end of the old schemes for all farmers, it was on the promise that they would all be able to access the new ones, which paid them for doing environmental work. But the door has now been slammed shut for thousands of farmers, creating haves and have nots based purely on timing.
“They say the money is spent, but because Defra refuses to be transparent we don’t know where it’s been spent, or whether it’s all been spent within this year.
“The awful dilemma now faced by many farmers is whether to turn their backs on environmental work and just farm as hard as they can to survive. This is a loss to both farming and the environment and cannot be what was intended.”
A farming roundtable organised by the NFU has met with Food Security and Rural Affairs Minister Daniel Zeichner to explain the crushing impact of Defra’s decision to close SFI applications and raise the urgent need for transparency from the department.
The latest lobby called on Mr Zeichner to allow the thousands of farmers who have begun SFI applications but who now find themselves unable to be paid for the work they have put in to compile the paperwork – and, in some cases, for the environmental work already started in expectation of an agreement – to be able to enter the current SFI.
It asked for more information about the future of the SFI scheme, and for the building of trust between government and industry through transparency about the agriculture budget and its allocations. The group also wanted impact assessments to show what the SFI suspension means for the agriculture transition.
Speaking after the meeting, Mr Bradshaw said: “The closure of SFI is a devastating shock for farmers and leaves businesses on a knife edge when they were already struggling with the impact of the changes to inheritance tax.
“We made it clear to the minister that this decision not only threatens the livelihoods of numerous farmers, especially upland farmers, commoners and tenants, but also undermines the ability of farm businesses to deliver environmental work. We also explained how it has crushed all trust in Defra.”
“Farmers need stability to plan for the future, invest in their businesses and continue their role as stewards of the countryside. The withdrawal of SFI leaves many facing the dilemma of whether they can afford to continue implementing environmental work, ultimately putting both food production and sustainability targets at risk,” Mr Bradshaw concluded.