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Preparation key for SFI26 funding agreements

Defra’s confirmation of funding for new SFI26 agreements provides much needed clarity for farmers planning their next environmental scheme application.

It has been announced there will be £240 million for new SFI26 agreements, including up to £60 million for Window 1, which opens on 30 June 2026 for small farms and businesses without an existing Environmental Land Management (ELM) revenue agreement. Any unused Window 1 budget will transfer to Window 2, due to open in September for all farmers and land managers.

This clarity on the SFI26 budget also confirms greater flexibility for farms with ELM agreements nearing expiry. This is a positive development, however, it does not lessen the need for preparation.

For many businesses, September will not be a second chance – it will be the main opportunity to apply. Those unable or unwilling to use the June window should use the summer months wisely, as early planning will be key to securing the best outcome.

Mapping, Rural Payments records and permissions should be checked early, including boundaries, land covers, parcel references and landlord or occupier consent. Corrections can take time and unresolved issues could prevent a timely September application.

The most practical development announced by Defra is the intention to help farmers with “soon-to-expire” (the definition of which we are yet to learn) ELM agreements access the full SFI26 offer. This includes land in SFI23, Countryside Stewardship Mid-Tier, legacy Countryside Stewardship Higher Tier and Higher-Level Stewardship agreements, where current rules would otherwise restrict entry because of incompatibility and double-funding risks.

From Window 2, Defra intends to allow applications on land covered by soon-to-expire agreements before those agreements end. If delivered, this should reduce the risk of a gap between schemes and give businesses more time to plan a smoother transition into SFI26.

Farmers should, therefore, use the summer to review existing actions, identify what will still be in place when current agreements end and assess which SFI26 options genuinely fit the holding for the full term. This is a strategic decision, not simply an administrative exercise.

The timing of an application is particularly important for businesses already participating in SFI24. Each business can only hold one SFI26 agreement, so entering SFI26 while an SFI24 agreement still has time to run may limit what can be included. Once SFI24 ends, the business may be tied to the SFI26 agreement already in place, without another opportunity to apply for additional actions.

For that reason, applying at the earliest opportunity will not always be the strongest option. In some cases, waiting for a future window may produce a better overall agreement, particularly where a current scheme is close to expiry and waiting allows a fuller SFI26 package to be included.

Rotational actions also require careful consideration, as the area entered at application will cap what can be claimed in future years. Entering small areas now does not create flexibility to increase them later, so rotations, cropping plans, forage requirements and contractor availability should all be considered before submission.

SFI26 remains an important opportunity to support soil health, nutrient efficiency, water protection, grassland resilience and lower-input farming systems. Defra’s announcement provides a more positive basis for planning, but the best outcomes will come from understanding existing commitments, preparing early and selecting the application window that best fits the business.

Ultimately, the priority should be to build the strongest agreement for the business, considering the long-term impact of the commitment rather than simply applying at the first opportunity. For some farm businesses, particularly those with schemes nearing expiry, waiting for the right application window may deliver a more valuable outcome. Given the complexity of the schemes and the options available, it is always worth seeking professional advice before making a final decision.

Article by

James Bush
Director

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