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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