After a rocky start, the Sustainable Farming Incentive (SFI) is looking more attractive – and with good reason, says Charles Mayson
When the government’s Sustainable Farming Incentive (SFI) opened for applications, the response was distinctly underwhelming.
Reluctance to sign up was partly because the SFI compared unfavourably with the Basic Payment Scheme. There was also a deep-rooted suspicion of Defra’s ability to deliver something that was simple-to-understand and easy to navigate.
But the the past few months have seen more acceptance that the BPS is finally disappearing into history.
The money available under the SFI might be less than the BPS, but it can still make a meaningful contribution to a business.
Another reason take-up was initially low was because returns in some sectors were buoyant – even though costs had rocketed.
But the SFI can still bolster annual revenue by as much as £6,000 on a 120ha (250-acre) arable farm.
Farmers have always argued that fair and adequate commodity prices are preferable than a reliance on subsidies – and this may have switched the focus of some producers away from support payments.
A wheat price of, say, £250/t has meant a certain bullishness in the sector – prompting some farmers to believe the SFI isn’t worthwhile. But such returns never last – which makes it prudent to take advantage of whatever is on offer.
The SFI is flexible and you don’t have to put all your land into it. Agreements last for three years, during which you can add more land or shift from ‘introductory’ to ‘intermediate’ levels – although you can’t downgrade in the other direction.
There is also an additional ‘management’ payment of £20/ha on the first 50ha of land, which could earn an extra £1,000. Payments are quarterly and begin as early as the first day of the month after your application, which will help with cashflow.
Any government policy will be a blunt instrument, so there will always be faults. But the broad direction of the SFI is laudable, with its focus on enhancing soils, reducing pollution and conserving nutrients.
The SFI is taking us in a direction where the nation’s farmers can produce food and look after the environment. We should be able to do both simultaneously. There are choices at an individual farm level, but overall it’s not a contest between the two.
Existing standards cover arable and horticultural soils, grassland soils and moorland. Six more will cover hedgerows, improved grassland, low-input grassland, arable and horticultural land, integrated pest management, and nutrient management.
There is also the promise of fewer inspections. Rather than the over-zealous threat of penalties, Defra says visits will be made by advisers whose brief is to help farmers deliver what they’ve signed up to.
We’re still in the honeymoon phase of SFI, so let’s hope these advisers do indeed prove to be collaborative. We certainly don’t want to go back to the bad old days when inspectors could lack empathy and be unduly harsh.
Mix and match
In this new post-BPS world, farmers will increasingly have to ‘mix and match’ revenues from different public and private sources. In doing so, the first consideration is whether the actions you want to take will fit your farming system.
Longer term, you can still make big changes to your strategic direction – such as committing to a big tree-planting scheme, entering the market for biodiversity net gain or going into renewable energy. Meanwhile, looking at the SFI makes sense.
We could have a new government next year and – with pressure on public spending – it is not impossible the SFI budget will get chopped. But my instinct is that it will survive for a few years roughly in its current form.
Some farmers still argue that it is better to wait and see what’s on offer next year or the year after before committing to the SFI. But there’s only one ball you can play and that’s the one that’s coming towards you. Right now, that’s the SFI.
Charles Mayson is founder of agricultural advisers CXCS.
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