Professional services


How to make the Sustainable Farming Incentive work for you


EXPERT VIEW


Details are fi nally emerging of ways the government will pay farmers to look aſt er the environment, says Honor Eldridge


B


rexit created a unique op- portunity for the govern- ment to reform farm sup-


port. Now outside the confi nes of the Common Agricultural Policy, the UK has seized the opportuni- ty to create a new system that will require farmers to do more in re- turn for their money. The government’s new ap-


proach will pay farmers to deliv- er clean air, clean water and oth- er ecosystem services. Known as “public money for public goods”, it will reward farmers for looking af- ter the environment and tackling the climate crisis.


It represents a profound shift in policy – and analysts have spent many years discussing how it might work. While Defra’s vi- sion for the new Environmental Land Management (ELM) scheme is clear, the details are still only trickling out.


Does it stack up? A further glimpse of what it will involve emerged last month when Defra published details of its pi- lot Sustainable Farming Incentive (SFI). In time, this will form the entry level of the ELM scheme and reward farmers for basic environ- mental improvements.


The pilot SFI outlines nine in- itial standards, each containing three levels – introductory, inter- mediate, and advanced – includ- ing payments. The intermediate level of the improved grasslands standard, for example, will pay £62/ha.


This allows farmers to start


seeing how the new system stacks up fi nancially against the current system of basic payments and countryside stewardship. But re- member, it is a pilot scheme and revisions are likely before fi nal terms are unveiled next year. Defra offi cially launched the


JULY 2021 • MIDLAND FARMER 43


SFI pilot in February 2021. It re- ceived more than 2000 expres- sions of interest, indicating the level of interest among growers and livestock producers. Those farmers are now being invited to join the pilot itself.


Measures of success The success of the SFI will be dependent on funding. The gov- ernment has committed to ring- fencing the money from the basic payment scheme until the end of this Parliament. But there is no guarantee as to what happens af- terwards. This is less than positive. Eve- ry farmer knows a successful busi- ness needs long-term planning. And we simply don’t have that cer- tainty yet because we don’t know at what level government fund- ing will be set.


There are other challenges too. Defra is actively considering the possibility of lowering the mini- mum area requirement criteria for farmers wanting to join the scheme – opening it up to a wider number of applicants.


While the total amount of fund-


ing has been ring-fenced, this obvi- ously does not equate to ring-fenc- ing the amount that individual farmers receive. And more farm- ers in the scheme means less mon- ey available per farm. However, ELM is not the only funding route available to farm- ers. The government is keen to in- corporate funding from the private sector too. This means private companies will also support pub- lic good delivery by funding agri- cultural projects. Some companies have already adopted this “private money for public goods” approach. They in- clude water companies who pay farmers to limit fertiliser applica- tions, thereby reducing the risk of leaching into watercourses.


Woodland creation


Private funding could also be available through woodland cre- ation as a carbon offsetting mecha- nism. Or through biodiversity net gain, which requires any new con- struction to deliver additional bi- odiversity to offset any losses at the development site. Overall, the idea is that this combination of public and pri- vate money will create a simi- lar funding level to the amount of money previously available to farmers through the Common Ag- ricultural Policy. It is clear that the future of funding for the farming sector will


be considerably more complicated than it was in the past. A stand- ardised cookie-cutter application will not be viable going forward. This means each farmer will need to investigate all the differ- ent funding options, consider their land, and review the specifi cs of their business. Only after that, will they be able to identify the best option.


The new approach represents a profound shiſt in policy


“ And this option will likely look


very different to your neighbour. Advisers and specialists have a role to play by helping to dispas- sionately assess the data and iden- tify the best route that secures the most funding.


They can also guide clients through this process and max- imise their profi tability. The SFI will be an exciting shift where UK agriculture will begin to move towards a more sustainable future. But it will be challenging, and it will require farmers to be resourceful and willing to try new and innovative methods. Honor Eldridge is an envi- ronmental consultant for Wilson Wraight. For details, call 01284 334483 or visit www.wilson- wraight.co.uk


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