Defra Announces Budget SFI26
Following the recent announcement on the Sustainable Farming Incentive 2026 (SFI26) application windows, actions and scheme guidance, the Department for Environment, Food and Rural Affairs (Defra) has today confirmed that the total budget for new agreements under SFI26 is £240 million.
Of this total, £60 million will be allocated to Window 1 for small farms and those without an existing Environmental Land Management (ELM) revenue agreement. Any unallocated funding from Window 1 will roll over into Window 2.
For context, around £75 million was brought under agreement between July and October 2024 following the launch of the Sustainable Farming Incentive 2024 (SFI24). As uptake accelerated over the winter, this rose to approximately £650 million, according to Defra’s January 2025 data release. This suggests that, despite the streamlining of SFI26, the scheme is likely to come under significant budgetary pressure, particularly in Window 2.
Improved application functionality?
Defra has also publicly confirmed for the first time that new functionality is being developed within the SFI26 application service. This will allow farmers with land in expiring agreements to apply before those agreements end. The feature is expected to be available from the start of Window 2 in September 2026.
Some farms eligible for Window 1 may have land in agreements that are due to expire soon. Due to the rule allowing only one agreement per farm business, these farms may wish to consider waiting until Window 2 to benefit from this new functionality.
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