Sustainable Finance Initiative decision leaves farming enterprises ‘on a knife edge’

The meeting followed Defra announcing the SFI scheme launched by the previous government, which rewards farmers for creating habitats and managing natural features on their land, would be revised with a cap on financial support for farmers after a spending review in June.

A Government spokesman said as a result of Labour’s determination to get more farmers to participate, a record 50,000 farm businesses and more than half of all farmed land was now managed under its grant schemes, the largest of which, SFI, had more than 37,000 multi-year live agreements.

It said having “inherited an uncapped scheme, despite a finite farming budget”, the maximum limit had been reached.

A Defra spokesman said: “Now is the right time for a reset: supporting farmers, delivering for nature and targeting public funds fairly and effectively towards our priorities for food, farming and nature.”   

This week’s talks with minister Daniel Zeichner highlighted the pressing requirement for the government to further explain the rationale behind the decision and to provide clarity on what the agricultural sector could expect in the coming months.

Robert Sullivan, director at Yorkshire-based GSC Grays, said Defra’s sudden decision to close the scheme had “sent shockwaves through the farming community”.

He said farmers had been left facing further uncertainty at an already challenging time.

Mr Sullivan said: “With Basic Payment Scheme support almost negligible and rising employer National Insurance contributions, many farming businesses are struggling to stay afloat.

"The farming sector is at a crossroads and this announcement will be a huge blow for those who have yet to access the scheme, but it is possibly more concerning for those with agreements nearing their end as the future of the scheme remains unclear. Given the likelihood of a reduced budget for the next iteration of the scheme, this move could signal a broader decline in government support for agriculture at a time when many farming businesses can least afford it."

After the meeting, NFU President Tom Bradshaw said the unexpected and sudden closure of the SFI was a "devastating shock", leaving farm enterprises “on a knife edge".

“We made it clear that this decision threatens the livelihoods of farmers, but also undermines the ability of farm businesses to deliver environmental work.”

Mr Maughan said the Government’s position was “terrible news for thousands of farmers across Yorkshire and beyond” who were planning to be a part of this year’s SFI scheme.

He said: “Farmers were given no warning whatsoever that applications are closing and the NFU was only informed 30 minutes before Defra announced the news to the media. This is a huge kick in the teeth to our hard-working farmers and growers.

“The government had promised to work with us to deliver a positive future for British farming but, yet again, they have failed to communicate or consult with us over a crucial farming issue.”