Guidance

Sustainable Farming Incentive pilot

An overview of the Sustainable Farming Incentive pilot scheme, including information on standards, payments, monitoring, inspections and reporting

Applies to England

The Sustainable Farming Incentive scheme is one of 3 schemes being developed to encourage environmental land management. The other schemes are Local Nature Recovery and Landscape Recovery.

The Sustainable Farming Incentive scheme will reward farmers for managing their land in an environmentally sustainable way.

The full scheme will launch in 2022, initially for farmers in England who currently get payments under the Basic Payment Scheme (BPS).

This guidance covers a pilot version of the scheme.

Pilot version of the scheme

The Sustainable Farming Incentive pilot is in its early stages. Over 2,000 farmers submitted expressions of interest earlier in 2021 and were invited to apply to take part.

These farmers will help make sure the scheme works in practice. This is part of a process called ‘co-design’. They will:

  • implement the pilot version of the scheme on their farms
  • take part in learning activities based on their experiences
  • provide regular, comprehensive feedback on what’s working and what’s not

The pilot gives farmers an opportunity to help shape the future of farming in England.

Applications to the pilot have closed. However, you may be able to take part in further phases or other environmental land management schemes later in 2021.

How the pilot works

You select land registered on your Rural Payments service account.

You then select Sustainable Farming Incentive ‘standards’ to apply to eligible land and to other features, like hedgerows.

You also choose an ambition level for each standard. If you select a higher level, you’ll be paid more.

Guidance for the pilot

This overview gives basic information about the Sustainable Farming Incentive pilot.

There’s more detailed guidance on:

You can find all the guidance for the pilot scheme in one place. This also includes:

You’ll find a link to these pages wherever they are useful.

Eligibility

Your eligibility

Pilot participants must:

  • have been an eligible Basic Payment Scheme (BPS) applicant in 2020 or 2021
  • be registered on the Rural Payments service

Future phases of the pilot will aim to include a wider range of farmers.

Land eligibility

You can enter land that:

  • is in England
  • is not common land or used for shared grazing
  • does not have an existing agri-environment agreement on it - for example if you have a field in Countryside Stewardship, it will not be eligible for the pilot

‘Agri-environment agreements’ include Countryside Stewardship capital only agreements

You can still include land entered into the Sustainable Farming Incentive pilot in your BPS application, provided it meets the BPS eligibility criteria.

You must have management control of the land included in your agreement so you can fulfil the actions in the standards on the land while the land is in the agreement. For the pilot, this means either:

  • the owner occupier, farming the land yourself or employing a contractor
  • a tenant with a Farm Business Tenancy (FBT) under the Agricultural Tenancies Act 1995 or an Agricultural Holdings Act 1986 tenancy

If you’re a tenant, it’s your responsibility to check whether taking part in the pilot will breach the terms of your tenancy agreement.

If you only have access to land under a licence arrangement, it’s unlikely you have sufficient control of the land to carry out the actions under the standards in the pilot agreement.

Standards

A standard is a set of land management actions. The standards will help farmers to:

  • create greener landscapes and improve biodiversity
  • promote cleaner air and water
  • guard against environmental risks such as climate change and flooding

The standards are a step towards achieving the government’s 25 Year Environment Plan goals and carbon net zero targets. Find out more about the environmental benefits of the standards.

You can choose standards that match the types of land on your farm, for example grassland, hedgerows, water bodies or woodland.

Initially, there are 8 standards in the pilot:

More standards will be added as the pilot develops.

Ambition levels

Most standards have 3 ambition levels that you can choose from:

  • introductory
  • intermediate
  • advanced

The farm woodland standard only has one level.

Applying standards and ambition levels

In some cases, you can select more than one standard for the same area of land. For example, you could apply the arable land and arable soils standard to the same area of land and select the hedgerows standard for hedges around it.

The individual standards pages explain which standards can be applied together. If you select multiple standards for one area, you’ll have to do all the actions in each standard.

You can select a different ambition level for each standard in your agreement. For example, you could choose to do the intermediate hedgerows standard and introductory water body buffering standard.

You cannot select different levels of ambition for different land parcels under the same standard. For example, you cannot apply the introductory arable land standard to one land parcel and the intermediate arable land standard to another.

Your agreement

You’ll be offered a pilot agreement after your application is confirmed as successful. The agreement sets out details of what you are undertaking to do and what you’ll be paid in return.

Your agreement offer

You’ll get an email that will tell you your agreement offer is ready for you to check.

To view your agreement offer:

  1. Sign in to the Rural Payments service.
  2. Go to your ‘Business overview’ page.
  3. Select Environmental Land Management Applications and Agreements.

Make sure you check your agreement offer carefully.

Use the Help links in the Rural Payments service to find out how to:

  • accept your offer
  • reject it
  • withdraw from the pilot

There’s separate guidance explaining how to make a change to your agreement offer.

You have 15 working days from the date your agreement is offered to accept, reject, amend or withdraw. If you need more time, contact the Rural Payments Agency (RPA).

Electronically sign and accept your agreement offer online. Do not print it and send it by post, or email it.

Other parts of your agreement

Along with the standards that you’ve chosen, these also form part of your agreement:

The monitoring and learning guidance provides a mix of general information and some things that you must do as part of your agreement. Where the monitoring and learning guidance says that you ‘must’ do something, this forms part of your agreement.

Read the latest version of the Sustainable Farming Incentive pilot guidance. There may have been updates since you applied.

Payment

You’ll be paid for both:

  • completing the actions in each standard
  • taking part in learning activities

Payment for standards

This table shows the payment rates for each standard and ambition level for this pilot.

Standard Payment
Introductory Intermediate Advanced
Arable and horticultural: land £28/hectare (ha) £54/ha £74/ha
Arable and horticultural: soils £26/ha £41/ha £60/ha
Farm woodland £49/ha - -
Hedgerows £16/100 metre (m) £21/100m £24/100m
Improved grassland £27/ha £62/ha £97/ha
Improved grassland: soils £26/ha £44/ha £70/ha
Low and no input grassland £22/ha £89/ha £110/ha
Water body buffering £16/100m £29/100m £34/100m

Some standards have additional actions with extra payments.

There’s more detail about payments on individual standard pages.

Capital items payments

We’ve updated the list of capital items that will be available to help you meet the actions of each standard. Eligible capital items are listed in the individual standards guidance.

Pilot participants will be able to apply for these through the Countryside Stewardship Capital Grants scheme from early 2022.

Payment for learning activities

Each pilot participant will be paid £5,000 for taking part in learning activities in the first year of the pilot. Payments making up this total will be made quarterly.

This is a flat rate payment, meaning that everyone is paid the same regardless of how much land they have in their agreement.

This payment may change in future years, depending on how much learning is needed as the pilot progresses.

How you’ll be paid

You’ll be paid quarterly (except for capital items). This means you’ll be paid every 3 months from the start of your agreement.

Agreements will start from November 2021 at the earliest.

Capital item payments will follow a claim-back process - you’ll pay for a capital item and then claim back from Defra.

Co-design and learning

As part of your agreement, you’ll take part in learning activities. These activities help Defra learn what is working and what is not.

The pilot learning payment pays you for this learning activity.

The activities will take up to 15 hours per month. Most of these hours will be ‘thinking while doing’ – for example, you’d be considering the scheme and how it could be improved while you’re planning or physically undertaking work. A smaller number of hours would involve desk based work.

There will be 2 kinds of learning activities:

  • core activities - you must do these as part of your agreement
  • other learning - you’ll be expected to do some of these, but you’ll choose which ones

Core activities will include:

  • tracking surveys - for example, questionnaires to track how things are going
  • journals - each participant will keep a journal to record information, ideas and experiences
  • activities to explore specific subjects - for example, livestock farmers working with us to look at the pros and cons of the grassland standards

We’ll make it clear which are the core activities you have to do.

You must read the learning activities guidance. This gives more detail about:

  • your commitments
  • kinds of learning activity
  • how we monitor learning activities

Monitoring and support

The Sustainable Farming Incentive pilot will use a new model for monitoring the delivery of agreements. It will focus on outcomes and improvement instead of penalties, while still protecting public money.

The pilot will test this model. You’ll give feedback on it as part of your learning activities. This will help Defra make improvements and develop a simple and effective monitoring approach that supports long-term success.

Once your agreement has started, Defra will use various techniques to see whether you’re achieving the aims of the standards and understand what is working successfully. If you’re not able to achieve the aims, Defra will work with you to explore why. For example, there may be a gap in the guidance, or a standard might need to be amended.

This approach will be piloted with a combination of:

  • site visits
  • virtual site visits, where possible
  • administrative checks
  • remote monitoring - for instance, using satellite images, aerial images or land-mapping data

There’s more information in the monitoring guidance. You must read this guidance.

If you cannot comply with your pilot agreement

Defra will not take enforcement action against participants for making honest mistakes that help reveal where improvements need to be made. This is what the pilot is for.

The pilot is a space to learn and improve. Participants will be able to share learning and experience without fear of repercussions.

If someone intentionally commits an offence, such as fraud, Defra will take action.

Annual declaration

You must submit an annual declaration each year for the duration of your Sustainable Farming Incentive pilot agreement to confirm progress of your agreement up to that point.

Read the monitoring guidance for more details. This guidance forms part of your agreement.

When your declaration is due

You’ll be told when your annual declaration is due at the start of your agreement. Your annual declaration is due 10 months after your agreement starts. Your next annual declaration will be 12 months after that.

If you do not submit your declaration on time

If you do not submit your annual declaration we’ll contact you and offer additional support and guidance.

If you do not submit your declaration after this, your payments may be withheld or your agreement may be ended.

If you declare that you cannot fulfil your agreement

If you declare that you cannot fulfil your agreement, we’ll contact you to discuss what has happened. Where possible, we’ll work with you to fix any issues.

Amending your agreement

Agreements are intended be more flexible in the Sustainable Farming Incentive than has been possible for current schemes. However, we need to understand what is and is not working with the pilot before we can introduce this flexibility.

This means that once your agreement starts, you will not be able to amend it until May 2022, when we’ll start testing how amendments work.

We’ll provide more details on amending agreements as soon as possible.

Reporting changes of circumstance

You must tell us as soon as reasonably possible if there’s a change in your circumstances that affects your eligibility for the pilot, the amount of money you should get or your ability to fulfil your agreement.

We’ll look at each of these on a case-by-case basis.

Read the monitoring guidance for more details. This guidance forms part of your agreement.

Contact the RPA to declare a change of circumstances.

How long your agreement lasts

Your agreement will last for 36 months from its start date.

If you want to leave the pilot

Contact the RPA if you want to end your agreement early and leave the pilot.

If you need to complain or appeal

Contact RPA if you want to make a complaint or appeal a decision. You can find out how to do this by reading our complaints procedure.

Contact the RPA

Fill in the query form or send an email with ‘Sustainable farming incentive pilot’ in the subject line to ruralpayments@defra.gov.uk

Include your Single Business Identifier (SBI).

You can also call or write.

Telephone: 03000 200 301
Monday to Friday 8.30am to 5pm, except bank holidays
Find out about call charges

PO Box 352
Worksop
S80 9FG

See all the Sustainable Farming Incentive pilot guidance.

Published 7 June 2021
Last updated 7 October 2021 + show all updates
  1. The deadline for applications has closed. This update reflects that. It adds more detail on agreement offers and the annual declaration.

  2. Changed the date of 'capital items' guidance publication to 2022.

  3. Amended details of agreement start dates, from October 2021 to November 2021 at the earliest. Also updated information around changing the details of live agreements. This will not be possible till May 2022.

  4. An update to the application deadline. It's now 30 September 2021.

  5. The previous update, about a changed application deadline, was published in error. Reverting to previous application deadline, with an update to follow later today.

  6. The application deadline has been extended. It is now 29 September.

  7. This clarifies the information about payment for learning activities. The rate for this year does not change, but the update explains that it will be paid monthly and that it may change in future years.

  8. Added a link to the collection of SFI guidance.

  9. This updates clarifies an issue raised by user feedback: 'agri-environment agreements' do include Countryside Stewardship capital only agreements, and land under such an agreement cannot be entered into the pilot.

  10. Updated timing for applications and replaced details of capital items payments.

  11. Removed reference to when details of scheme would be available and the reference to the application window as these have now changed/passed. Updated details of eligibility to cover management control.

  12. Updated with details for Sustainable Farming Incentive pilot.

  13. First published.