SFI reopens in 2026 – and England’s smaller farms move to the front of the queue

For many English farmers, 2026 is shaping up to be less about long-term strategy and more about short-term certainty.

The government has confirmed that the Sustainable Farming Incentive (SFI) will reopen later this year, following a prolonged pause in new applications. It will do so in two stages: a first application window in June aimed at smaller farms and those without an existing agri-environment agreement, followed by a wider opening in September.

Ministers describe the approach as a way of improving access and restoring confidence. On farm, the question is more practical: who gets in first, and how much difference will the timing make?

Why timing now matters more than ever

Direct farm payments are no longer the safety net they once were. In England, delinked payments are already declining year by year, and for many businesses they now account for a much smaller share of income than they did under the old Basic Payment Scheme.

What has quietly taken their place is environmental income.

According to Defra’s latest Farm Business Survey, income from agri-environment schemes now makes up around 30% of the average farm’s total business income in England. For some livestock and upland farms, it is significantly more than that.

This shift explains why the reopening of SFI matters so much. It is no longer seen simply as a way of rewarding good environmental practice. For many farms, it has become a core part of the business plan.

A closer look at farm incomes in England

Defra’s most recent figures show stark differences between farm types.

Large poultry, dairy and specialist pig units remain the highest earners on average. But mixed farms and grazing livestock businesses — which make up a large share of England’s smaller, family-run holdings — operate on far tighter margins.

For lowland and upland grazing farms in particular, environmental payments now account for a substantial share of income. In the most extreme cases, more than half of total farm income comes from agri-environment activity rather than food production.

That context matters when access to schemes is staggered. For farms that rely on environmental income to steady cash flow, when a scheme opens can be almost as important as what it pays.

What “small farm priority” really means on the ground

Under the new structure, the June application window will be limited to:

• smaller farms, and
• farms without an existing Environmental Land Management agreement.

A second window in September will then open to all eligible farms.

Defra has said it will publish a clear definition of what counts as a “small farm” before the June window opens. At the time of writing, that definition has not yet been released.

That uncertainty leaves many farmers waiting to see where they fall. Farm size can be measured in several ways — land area, output value, labour units — and different definitions capture very different businesses.

What is clear is that priority access brings practical advantages. Early entry gives farmers more time to plan rotations, manage land use, and make decisions about taking land out of production or investing in environmental actions.

Those who have to wait until September may find some of those decisions already locked in for the season.

Regional differences add another layer

England’s farming economy is far from uniform.

Defra’s regional income data shows that total farming income rose across all English regions between 2023 and 2024, but average farm incomes still vary widely. The South West, for example, has a large concentration of grazing and mixed farms with relatively low average incomes, while parts of the East of England are dominated by higher-earning arable systems.

Average farm size in England is around 87 hectares, but many regions fall well below or above that figure. As a result, any definition of “small farm” will inevitably favour some regions and systems more than others.

That makes the SFI reopening not just a national policy moment, but a regional one too.

Beyond policy: confidence and predictability

Perhaps the most important issue is not eligibility, but trust.

Previous pauses and changes to SFI left many farmers wary of building schemes into their business plans. Defra has acknowledged that uncertainty and says the new two-window structure is designed to improve predictability.

Whether that reassurance holds will depend on how clearly the scheme rules are communicated — and how quickly payments follow agreements.

For now, many farmers are watching and waiting. June is close enough to plan for, but far enough away for unanswered questions to matter.

Looking ahead

SFI’s return marks another step in England’s move towards an environmentally led farm support system. For smaller farms in particular, early access could offer breathing space at a time when margins remain tight and traditional support continues to fade.

What will define the success of this reopening is not the headline policy, but the detail: who qualifies, how quickly agreements are processed, and whether the scheme delivers the stability farmers need to make confident decisions this year.