SFI26: Scheme Information Finally Available

DEFRA have today released further detail on the Sustainable Farming Incentive 2026 (SFI26), with (nearly) final scheme information now available ahead of applications opening later this month.

Whilst we are still awaiting final confirmation of some elements, this is the clearest picture yet of how the scheme will operate and what farm businesses should be doing now to prepare.

Application Windows Confirmed

DEFRA have confirmed that SFI26 will be rolled out in two stages:

Window 1 – from 30 June 2026 (they said June to be fair to them, but they couldn’t have stretched it much further!!)   Applications in this window will be open to:

• Small farms (generally under 50ha)

• Farms without an existing ELM revenue agreement

  
  

A limited number of eligible farms will be invited to apply from around 18 June to test the system ahead of full rollout.

Window 2 – September 2026

• Open to all eligible farms and land managers

  
  

As with previous guidance, there is a strong indication that budget availability will dictate how long each window remains open, so early preparation remains key.

What’s Been Published?

The information released now includes nearly final (but not completely final!!) versions of:

• Scheme terms and conditions

• Scheme rules

• Full list of SFI26 actions

• Application and agreement management guidance

  
  

These documents finally allow us to start reviewing options properly for clients now ahead of the application window opening.

Final versions are expected to be published in mid June.  

Key Rules and Limits to Remember

While much of this has been known for some time, the latest release reinforces several important constraints:

• Minimum farm size: 3 hectares

• One 2026 agreement per business – you can still apply if you have a 2023 or 2024 agreement. 

• Maximum value: £100,000 per year

• Agreement length: typically 3 years

• Rotational actions limited after Year 1 – you will no longer be able to increase the area from year 2. 

  
  

These limitations mean that getting the initial agreement structure right is critical, particularly where rotational options are concerned.

Our key message remains unchanged – make sure your application is well planned and not rushed at the end.   With tighter rules, capped payments, and restrictions on changing agreements later, the cost of getting it wrong at the outset is higher than before.

Need Support?

We have already been in contact with many of your directly, and this guidance means that we can now get started properly on drafting applications.   We will be in touch over the next couple of weeks to finalise your application if you qualify for the first application window.  

If we haven’t already been in contact about an application and you would like some support, please get in touch as soon as possible.  

Careful planning now will make a significant difference to both scheme income and overall farm performance over the next three years.

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Office

01454 614624

Sam Kelly

07777 696080

Jonathan Purton

07399 117257

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Capital Grants 2026 Update

DEFRA has now published the detailed guidance for the 2026 Capital Grants offer ahead of applications opening in July.

The biggest headline remains the increased funding pot, with £225 million allocated to Capital Grants in 2026, up significantly from the 2025 offer. However, we know demand is going to be very strong, so it is important to start work on your application now to ensure you are ready to submit as soon as the application window formally opens.

We would also strongly encourage businesses to ensure existing agreements and claims are fully up to date before the new window opens. Outstanding capital claims, incomplete agreements or mapping issues may restrict or delay new applications.

DEFRA has already indicated it will again provide updates as 25%, 50% and 75% of the budget is allocated once the scheme opens. Given how quickly funding was allocated last year, we would not recommend delaying applications unnecessarily.

DEFRA has confirmed that spending caps will broadly remain unchanged for the main categories:

• £25,000 for water quality (including fencing)

• £25,000 for air quality

• £25,000 for natural flood management

• £35,000 for boundaries, trees and orchards

We are currently working with clients on potential 2026 Capital Grant applications and reviewing projects to ensure they are application ready ahead of the expected July launch.

If we are not already in contact regarding a potential application and you would like assistance, please get in touch as soon as possible.

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Office

01454 614624

Sam Kelly

07777 696080

Jonathan Purton

07399 117257

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DEFRA Publish Further SFI26 Application Details

DEFRA have today released outline guidance for the new Sustainable Farming Incentive 2026 (SFI26) scheme, alongside confirmation that applications for the first window will open in June 2026.

Whilst the full scheme guidance is still to come, this publication gives us a much clearer picture of how the new scheme will operate and confirms a number of significant changes from previous SFI rounds.

Two application windows confirmed

As previously indicated, SFI26 will operate with two separate application windows:

Window 1 – June 2026

Open to:

• Small farms (less than 50 ha)

  
  

• Farms without an existing ELM revenue agreement.   This is defined as a farm business which did not have a live, RPA administered ELM revenue agreement on 1 January 2026 (SFI, Mid Tier, Higher Tier)   Stand alone capital grants don’t apply to this.  

Window 2 – September 2026

Open to all eligible farmers and land managers

DEFRA have confirmed that Window 1 may close early if the available budget is fully allocated, so don’t assume the window will remain open for the full period – get everything ready now so that an application can be submitted promptly when the applications open.  

Key changes to SFI26

The latest guidance confirms several major structural changes to the scheme:

• Only one SFI26 agreement per farm business

• A maximum agreement value of £100,000 per year (this can be in addition to any other SFI agreements you have in place).

• Minimum eligibility threshold of 3ha

• The offer has been reduced from 102 actions to 71

• Limits on certain options

• Removal of several low uptake or lower “value for money” actions

• SFI management payments removed

What to do now

At this stage, DEFRA are mainly encouraging businesses to ensure that the administrative side is fully ready before the June launch.

This includes:

• Checking Rural Payments maps are correct

• Reviewing SBI permissions and authorised users

• Confirming land parcels and business details are accurate

• Ensuring all contact information is up to date

In reality, you should also now be reviewing potential rotational plans and identifying which SFI actions remain financially worthwhile under the revised payment structure.

Some popular actions have been cut back

Whilst full guidance and payment schedules are still awaited, earlier DEFRA announcements already confirmed that a number of popular actions have either been removed entirely or seen payment reductions.

Examples include:

• Herbal leys – value reduced

• Winter bird food – value reduced

• Nutrient management plans - gone

• IPM plans - gone

• Soil management plans – gone

  
  

The direction of travel is fairly clear with a movement away from “easy entry” options and focus funding towards actions with clearer environmental outcomes.

Our initial thoughts

The biggest positive is simply that there is finally some certainty returning to the system after the disruption and abrupt closure of previous SFI rounds.

However, there are some fairly clear implications emerging already:

• Larger businesses are likely to feel the impact of the £100k cap

• Rotational flexibility is more restricted than before

• Some previously attractive low cost options may no longer stack up financially

For many businesses, SFI26 is likely to become far more about targeted integration into the farming system rather than maximising payment income.

The full action guidance and payment rates are expected before Window 1 opens in June, which should give a much clearer indication of where the strongest opportunities remain.

For businesses looking at SFI26 applications this year, now is the time to start reviewing:

• existing stewardship agreements

• rotation plans

• environmental priorities

• likely agreement values

• eligibility for Window 1 versus Window 2

If you are considering an application, please get in touch with us as soon as possible to get the process underway.  

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Office

01454 614624

Sam Kelly

07777 696080

Jonathan Purton

07399 117257

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