Suatainable Farming Incentive actions cut and capped but Defra pledges new funding to improve farm productivity at NFU Conference in Birmingham

Emma Reynolds addressed the farming sector at the NFU Conference on 24 February

Emma Reynolds addressed the farming sector at the NFU Conference on 24 February

Image: NFU

The NFU has welcomed the government’s promises of partnership, clarity and stability following a string of changes to the Sustainable Farming Incentive, announced by Defra at the NFU Conference.

Speaking at the event in Birmingham, Defra secretary Emma Reynolds confirmed that Sustainable Farming Incentive (SFI) actions would be limited to 71, with funding capped at £100,000 per farm in order to make the system fairer and simpler.

Reynolds pledged £345 million in funding to help improve farmers’ productivity and drive “cutting-edge technologies”.

Building on her announcements at the Oxford Farming Conference in January, the Defra secretary said the government was responding to farmers’ calls.

Reacting to the announcements, NFU president Tom Bradshaw said: “The reformed SFI scheme announced today appears to strike the right balance between simplifying the process and maintaining flexibility, while still retaining preferable actions for farmers and growers…

“What is pleasing is that Defra has taken the NFU’s feedback on board in a number of areas where we were concerned about early plans for the new SFI.

“The Secretary of State said today that the ‘government is serious about partnership’ and is ‘committed to giving [the industry] clarity and stability’. I welcome that but key to this must be transparency around the farming budget, as well as a long-term plan for food and farming.

“The resilience of our food system can’t be taken for granted, underlying profitability is essential to driving the investment needed and the resilient food system that society needs.”

Under the new arrangements, SFI is designed to be simpler, fairer, more accessible to small and medium-sized farms.

The key aspects of the revised SFI scheme are as follows:

  • 71 actions, reduced from 102, taking out schemes with low uptake.
  • Agreements to be capped at £100,000 per year. For context, 97 per cent already fall below that threshold.
  • Applications to open in June for small farms and those without a live Environmental Land Management (ELM) revenue agreement.
  • Small farms are defined as holdings of 3-50 hectares registered with the Rural Payments Agency (as of 1 January 1 2026).
  • A second application window to open to all farmers in September, with further details to follow.
  • £225mn (50 per cent more than last year) made available for ELM capital grants from July, supporting investments such as hedgerows for biodiversity and natural flood management.

In addition, Reynolds announced £120mn in productivity grants for 2026. This includes £70mn for the Farming Innovation Programme (to help farms cut emissions, strengthen resilience and boost productivity, including through investment in greenhouse production) and £50mn for the Farming Equipment and Technology Fund (to help farmers invest in equipment to improve productivity).

She also confirmed that the first meeting of the new Farming and Food Partnership Boar, announced at The Oxford Farming Conference, will take place in March.

Concluding her speech, Reynolds said: “In January [at the Oxford Farming Conference], I promised partnership, clarity and confidence. Today I’ve shown how we’re taking forward those promises…

“These are not isolated actions. They are part of a determined effort to give British farming the foundation it needs to grow. We want farm businesses that are productive, profitable and resilient.”

Energy concerns

In a question from the floor, Martin Emmett, chair of the NFU’s Horticulture and Potatoes Board, asked whether electricity standing charges from April will see horticulture businesses face cost rises of up to 60-80 per cent, with Bradshaw stressing the likelihood of retail price inflation.

Reynold responded that Defra is “raising those concerns across government”, adding that she knows there are “great opportunities” to produce more fruit and veg in the UK.

Listen to Nina Pullman’s interview with Emmett in the next episode of the Fresh Produce Journal Podcast for insights on energy cost rises and the government’s horticulture sector growth pla

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