Still unsure whether to apply for the SFI?

With a delay in the 2023 Sustainable Farming Incentive (SFI) application process, and with more commercial options now available for your agricultural business,  are you considering applying for the SFI?

There has been an increase in the number of paid actions since the original SFI offer – there are now 23 paid actions across nine SFI standards which provide access to the £2.4 billion of government funds specifically designated to support the agriculture industry in the UK.

The SFI wants to encourage Sustainable Farming methods and improve the resilience of different systems. The five main objectives of the SFI are:

• – Creating a wildlife-rich habitat
• – Improving water quality
• – Improving flood resilience
• – Creating new woodland habitats
• – Reducing carbon emissions

UK farmers have historically focussed almost exclusively on food production so, do you see the new schemes as too big a departure from your roots?

To support farmers through the dramatic changes on the UK agricultural horizon, the Farming Resilience Fund was launched in 2022. The scheme gives Basic Payment Scheme (BPS) recipients access to 18 hours of free advice and business support from organisations across the UK.

One such organisation is AKC, a farm consultancy firm based in Erlestoke, near Devizes.  We spoke with AKC’s consultants: Jenna Copp and James Berry for their insights into the uptake of schemes and the future of UK farms.

One of the main reasons  for the low level scheme uptake is the lack of clarity and delays in the project which have not inspired confidence. DEFRA’s publications have not always been clear or easy to absorb and there is an overall lack of awareness of what the financial benefits are going to be.

Jenna also commented on the difference in the input from farmers required to take advantage of new schemes. “Historically, the BPS scheme was ‘easy’ for farmers. It was a single claim providing a straightforward lump sum payment. Now, it is much more complicated, and farmers need to research and engage with a greater number of schemes, which often have more associated costs.”

As a result of the reduction in BPS payments and the volatility with input and sale prices, AKC are seeing a large increase in clients requiring long term cashflow and budgeting advice, which can be included in the 18 hours of free advice granted through the Farming Resilience Fund.

Proper cashflow, budgeting and forecasting is crucial for farmers now – AKC have recently modelled a client’s business and believe that, even with all new relevant schemes being applied for they will not exceed more than 70% of the income that was historically being received from BPS. James Berry said “The SFI could be great for contract farmers and those looking for flexibility to change their agreements every year. Highly commercial farms on the other hand might look at some of the higher tier projects for maximum benefit.”

However, Jenna and James also believe that many farmers are already carrying out, and paying for certain activities that could be covered under the SFI such as Integrated Pest Management, Nutrient Management Plans, and growing Companion Crops. Are you a farmer missing out on payments for activities you’re already doing? Would it make sense to apply for the SFI?

The SFI 2023 standards cover:

• – Soil
• – Moorland
• – Hedgerows
• – Integrated Pest Management
• – Nutrient Management
• – Arable and Horticultural Land
• – Improved Grassland
• – Low Input Grassland

A large percentage of farmers with over 200 hectares may now need to update or invest in new machinery and technology, not just to maximise productivity and measure the benefit of entering new schemes, but also to comply with increasing regulation and reduce the time and stress of managing a more complex farming business. With regulatory bodies already clamping down on rural businesses across parts of the UK, recording activities accurately to confirm compliance within the schemes requirements is also now essential. However better record keeping also leads to enhanced Financial Data, Performance Reporting, Improved Audit Preparation, Future Business Planning, Reduced Costs as well as improved overall efficiency – so when did you last audit all of your farming equipment, including your office-based tools to ensure you have what you need to drive your business forward and maximise profits?

To incentivise the transition to a more sustainable way of farming, the Agri Tech and Farming Equipment and Technology Grants can offer significant financial assistance with a wide range of areas to help famers to:

• – Improve agricultural productivity
• – Contribute to improved animal health and welfare
• – Encourage more sustainable pesticide and fertiliser usage
• – Improve air and water quality
• – Reduce greenhouse gas (GHG) emissions in line with Net Zero targets
• – Reduce unsustainable use of abstracted water encourage sustainable management of woodlands

With an increasing number of UK farmers now embracing a wider view of farming technology to include Crop Management, Cashflow, Budgeting and Livestock Management solutions, now is a great time to review your current business tools, see what costs can be recovered under the grants and ensure you are prepared for the challenges that lay ahead for UK Farming.

With BPS payments due to end in 2027 and the new schemes becoming clearer, having the benefit of quarterly payments and potentially being more profitable than your current land use what should you do next?

Still unsure whether to apply for the SFI? Join our free webinar!