Emerging Details of the 2026 Sustainable Farming Incentive Signal Significant Change

Ceres Rural is advising farmers and land managers to take early note of emerging changes to the 2026 Sustainable Farming Incentive (SFI), following announcements made at the NFU Conference, which signal a marked shift in both the structure and financial framework of the scheme.

Current indications suggest that the 2025 SFI offer will be limited to 71 actions, with a maximum funding cap of £100,000 per holding. In addition, it is expected that only one SFI agreement will be permitted per holding, reducing the scope for multiple or layered agreements that some businesses have relied on previously.

Another key change outlined is the removal of management payments from new SFI agreements. Alongside this, reduced payment rates are expected for several commonly used actions, including herbal leys, legume fallow, and winter bird food, where these options are entered into under new agreements.

The duration of commitments is also expected to change. Actions previously offered on a five‑year basis are likely to move to three‑year agreements, increasing flexibility but shortening the period of guaranteed income and requiring more frequent review of scheme participation.

Commenting on the announcements made at the NFU Conference, Greg Clark, Farming Consultant at Ceres Rural, said:

“While the Sustainable Farming Incentive will continue to play an important role in farm business income, these changes represent a clear tightening of the scheme. Fewer actions, lower payment rates for some options and shorter agreement lengths mean farmers will need to be increasingly strategic about how SFI fits within their wider business planning.”

“With details still being confirmed, now is the right time for farm businesses to review existing agreements, consider their future options, and ensure they are well positioned to respond once the final 2026 offer is published.”

Ceres Rural emphasises that these details are still emerging and have not yet been formally confirmed by Defra, and further clarification is expected over the coming months as the 2026 scheme is finalised.

• The revised SFI 2026 is expected to open through two application windows, with an initial phase for smaller farms and first‑time applicants in June, followed by a wider rollout in September.
• it has been indicated that Farms will be limited to one SFI 2026 agreement per holding, with annual payments capped at £100,000. Agreement lengths are set to reduce from five years to three, and the £50/ha management payment will be removed, with funding redirected into action payments.
• Rotational actions will remain flexible, allowing movement between fields, but total claimable area will be fixed at year‑one levels for existing agreements.
• Payment increases are expected for moorland grazing and shepherding, while rates for herbal leys, winter bird food and legume fallow are set to reduce, despite these being among the most widely used actions to date.
• Enhanced overwinter stubble options will be capped, with a maximum of 25% of eligible land entered in combination.
• Existing SFI agreements will continue unchanged, operating under the terms already agreed.
• Actions previously offered over five years will move to three‑year commitments, a change intended to improve flexibility, particularly for tenant farmers.

CS Capital Grants Scheme

In addition, Ceres Rural understands that the Countryside Stewardship (CS) Capital Grants scheme is expected to open in July 2026. While full guidance has yet to be released, the 2026 scheme is likely to be similar to previous rounds of funding – providing important opportunities for investment in on‑farm infrastructure and environmental improvements. Farmers and land managers are encouraged to begin planning potential projects early to ensure they are ready once the scheme opens.

An additional £225 million will be released in a new capital grant round scheduled for July 2026. This funding will back initiatives including hedgerow establishment, upgrades to slurry storage, natural flood‑management measures, and projects aimed at improving water quality.

Farmers and land managers are advised to seek professional guidance before entering new agreements or committing to capital works, to ensure proposals align with both business objectives and evolving scheme requirements.

Broader Funding Package