Making the 2023 Sustainable Farming Incentive Work On-Farm

Introduction to the Sustainable Farming Incentive

In the last Agrii Journal, we explored how tackling the new Sustainable Farming Incentive (SFI) systematically, through a three-stage plan, could make the task less daunting and more rewarding. In this issue, we gain insight into how the scheme works on-farm.

Paul Wilson's Experience

Having withdrawn from the SFI pilot on 214ha near Alcester in 2022, Warwickshire grower Paul Wilson has now entered all 755ha of G.W. Wilson & Sons’ arable land and a small amount of permanent pasture into the 2023 SFI.

“Setting up the original pilot was time-consuming but not difficult, and the arable soils standard, in particular, suited us well,” Paul explains. “But we couldn’t justify taking 5% of the land out of production for the payment available. It also clashed with the carbon payments opportunity we were exploring.”

A New Approach with Agrii

Working with Agrii SFI consultant Paul Pickford, Paul now finds the greater flexibility of the 2023 scheme and its compatibility with carbon credits a much more appealing prospect. Combined, their 2023 plan is set to replace around 33% of their original Basic Payments Scheme (BPS) income, with carbon payments potentially doubling this figure.

Building the SFI Plan

Starting with Existing Practices

“The first step was to include all the actions we already undertake for Red Tractor, Farming Rules for Water, and other requirements,” says Paul. This foundation included soil, IPM, nutrient, and hedgerow management.

“We also measured all our hedgerows, which was valuable for identifying additional field corners and rough areas suitable for SFI actions,” Paul adds.

Additional Actions

Beyond existing practices, the team identified specific areas for additional SFI actions:

• 5ha of winter game cover and buffer strips.
• Field corners and inconvenient areas converted to grass.
• A small field designated for a three-year NUM3 legume fallow.
• Multi-species winter cover crops rotated ahead of peas or spring barley.
• Companion cropping to support OSR establishment against flea beetle.

“Cover cropping has been part of our approach to soil improvement, and the new rules allow us to continue grazing sheep while meeting SFI requirements,” explains Paul.

IPM and No-Insecticide Actions

The team debated IPM4 (no insecticide use). “We committed to only half the arable area initially, maintaining flexibility,” says Paul Pickford. “Within the three-year agreement, we can adjust this up or down annually.”

Financial Implications

Balancing Income and Flexibility

Incorporating rotational NUM3 legume fallow into their plan provides flexibility and supports black-grass management. “While this means income foregone, it offers a gross margin of around £480/ha and a great entry for milling wheat,” Paul Pickford explains.

Carbon Payments: A Growing Opportunity

Carbon payments are increasingly vital. Benchmarking at Larkstoke Farm shows sequestration of 5.04 t/ha of CO2 eq annually, translating to £130/ha in payments under current rates. “We conservatively estimate a return of £60/ha from our 755ha in 2024, matching SFI returns,” says Paul Wilson.

Paul Pickford adds, “With an average £55/ha in annual carbon payments for UK farms involved, carbon credits present exciting opportunities for additional income.”

Looking Ahead

“As BPS fades, diversifying income streams will be essential,” Paul Pickford notes. “Schemes like SFI and carbon insetting provide significant potential, especially when paired with better financial planning and capital expenditure restructuring.”

Paul Wilson concludes, “Careful planning and flexibility are key to navigating the changing climate and markets. The SFI scheme and carbon programmes offer something valuable for every farm.”