Stride & Son Rural and Agricultural Services

We’re delighted to offer fully accredited professional rural and agricultural services as part of our wider estate agency services. From rural and agricultural valuations to crop and livestock valuations, rural planning, mapping and boundary disputes, land management and more, our team are on hand to support landlords and tenants to get the most from their rural and agricultural assets. In this blog, our rural team share some important updates on the Sustainable Farming Incentive and what it means to landowners and tenants.

Sustainable Farming Incentive (SFI) Update

As part of the Agricultural Transition Period, there has been much pending on the delivery of The Sustainable Farming Incentive. As Basic Payment Scheme revenue reduces rapidly, the roll out of a scheme that helps to replace this financial void, is essential. A clear understanding as to the extent or shortfall, the scheme will deliver, will provide greater certainty and direction, for farm businesses. The rollout has been a slow process, but we are now at a point where the majority of actions are available. Recent updates and announcements have provided further detail which has been summarised in brief below.

FAQs

Do you have to have claimed BPS to apply for SFI?

The initial requirement to have historically claimed BPS, in order to apply for SFI has now been dropped and eligibility is no longer linked to BPS. This is an important update as it allows new entrants to also now access SFI.

Who can apply?

In order to apply, an applicant must have ‘management control’ of the land, for the duration of the agreement.

What does this mean for tenant farmers?

The same applies for land let on a tenancy agreement. Subject to the terms of the tenancy, providing the Tenant has management control of the land for the length of the SFI agreement, tenants are welcome to apply. This also extends to short-term rolling tenancy agreements, so long as there is no reason to expect the rolling tenancy to terminate in the next 3 or 5 years (dependent on the term of the agreement). If this was the case, for reasons outside of your control, Defra have said that penalties will not be applied. Worst case scenario, but important to be aware of, is that payment of monies received might have to be paid back for that year.

Can I transfer from an existing agreement (Countryside Stewardship Mid-Tier or HLSELS)?

It had been previously announced that it would be possible to move easily, from an existing HLSELS agreement, over to SFI, this Autumn. This is still possible. However, the RPA still have to be contacted directly and there remains no automated process in place. DEFRA say that this will be available ‘in the future’; but there is no fixed time frame for the delivery of this, and it doesn’t look to be before 2025.

Who is eligible / what are the eligibility requirements to claim management payments?

The management payment is a payment that is available to all agreement holders. Year one of an agreement will receive an additional £40 per hectare, for up to 50 hectares entered into an agreement. This will provide an additional payment of up to £2000 (for agreements starting by March 2025). The remaining term of the agreement will receive £20 per hectare, for up to 50 hectares entered into the agreement. This will provide an additional £1000 per annum. It is worth taking into account that there is only one management payment available per business (SBI linked), and that the payment is based on the first agreement submitted.

Are there any limits on the total area an action can be applied in a new agreement?

From March this year, ten of the actions have been capped. These options can cumulatively, no longer be applied to over 25% of the farm and include:

CIPM2: Flower-rich grass margins, blocks, or in-field strips

CAHL1: Pollen and nectar flower mix

CAHL2: Winter bird food on arable and horticultural land

CAHL3: Grassy field corners or blocks

CIGL1: Take improved grassland field corners or blocks out of management

CIGL2: Winter bird food on improved grassland

WBD3: In-field grass strips

AHW1: Bumblebird mix

AHW9: Unharvested cereal headland

AHW11: Cultivated areas for arable plants

What is the process, to include an endorsed action into an agreement?

There is currently only one endorsed action available under SFI, and this is the action GHR6 (species rich grassland). It is understood however, that later in 2024, more endorsed actions will be available. The detail of these unfortunately, is yet to be announced. The process to include one of these options in an agreement, first requires the area to satisfy the action criteria. Generally, reference to the Priority Habitat Inventory is a good indicator to start. Providing this is the met, your SFI application should then be submitted, and you must then seek Natural England (or Historic England if appropriate) approval. Natural England or Historic England should make contact once an application is submitted. They will arrange a visit to assess the suitability of the option, ahead of making the decision whether to approve or disapprove the inclusion of the option in an agreement. An agreement including these options will not be offered until endorsement is secured. To prevent delay in receiving an agreement offer, multiple applications can be submitted, so a separate agreement could be compiled, that only includes actions requiring endorsement. A consideration here, however, is the order that applications are submitted, to ensure this does not consequentially result in a reduced management payment.

Find out more or arrange a chat with a member of our team today for more information, guidance or support on your rural and agricultural management needs on [email protected].