Policy paper

[Withdrawn] Sustainable Farming Incentive: how the scheme will work in 2022

Published 2 December 2021

Applies to England

This publication was withdrawn on 27 May 2022 and replaced with the scheme guidance.

Introduction

The Sustainable Farming Incentive (SFI) is the first of our three new environmental land management schemes. Through this scheme, we will pay farmers to produce public goods such as water quality, biodiversity, animal health and welfare and climate change mitigation, alongside food production. These public goods are essential to meeting our 25 Year Environment Plan, Net Zero and animal health and welfare ambitions, alongside our ambitions for a productive and competitive agriculture sector.

In addition to the SFI we will be launching the Local Nature Recovery scheme and the Landscape Recovery scheme, as set out in the Agricultural Transition Plan: June 2021 progress update. All three schemes will be accessible to farmers. Local Nature Recovery will begin a phased rollout from 2023 and will pay for actions that will achieve our environmental priorities in a locally targeted way. Landscape Recovery will begin piloting in 2022 and will support long-term, large-scale, land use change and habitat restoration projects. Our environmental land management schemes will be key to achieving our net zero and biodiversity goals. More details on Local Nature Recovery and Landscape Recovery will be available in the new year.

This paper sets out how the SFI will work in 2022, the first year of its rollout, and explains how we intend to expand the scheme over the next 3 years. It builds on the SFI policy set out in the Agricultural Transition Plan: June 2021 progress update.

The paper covers:

• details of scheme policy, including eligibility, applications, agreement length, payment frequency, and arrangements for common land
• details of the SFI offer in 2022:
  • soils standards and payment rates
  • draft moorland and rough grazing standard and payment rates
  • annual health and welfare review
• details of payment principles and how these have been met for the SFI offer in 2022 are available in Annex A

This is a starting point. As rollout of the SFI scheme proceeds, we will add more standards and make ongoing improvements, drawing on what we learn from rollout and the SFI pilot.

Over 900 farmers applied to join the pilot over the summer, and the first pilot agreements went live from November 2021. It is early days, but we have already learned a lot from farmers’ experience of making applications – including many areas where we can make improvements for the rollout of SFI from 2022. We very much look forward to working with these farmers over the coming years.

SFI is aimed at farmers, paying for actions that relate to farming activities. It will generate significant environmental outputs through near universal uptake. Through SFI, within a few years we want all farmers to see producing environmental and climate change benefits as an integral part of their business, alongside food production.

We will know SFI is successful when we can see:

• large-scale adoption of the scheme across the range of farm types, locations and tenancy arrangements – with 70% of farms and farmland in the scheme by 2028
• farmers increasing their coverage (in terms of both land and range of standards) and levels of ambition over time
• evidence of the ambitious outcomes we expect to see for the environment, climate, and animal health and welfare

From 2022, the initial SFI offer will:

• enhance the natural health and fertility of our soils – this is one of the most important things we can do to make our farming more profitable and sustainable
• contribute to our efforts to reach Net Zero – assuming by 2028 the soil standards cover 50% to 70% of eligible agricultural soil in England, this could save approximately 330 to 460 thousand tonnes of CO2 equivalent in 2028
• help us assess the condition of the moorlands and work out how best to invest in their restoration through sustainable farming practices through the moorland and rough grazing standard

Scheme policy

This section sets out how the main elements of the scheme will work. We will release final details ahead of the application window opening in 2022. The Annual Health and Welfare review will follow a different approach.

Delivery

The Rural Payments Agency (RPA) will be responsible for administering SFI.

Eligibility

When the scheme launches in 2022, farmers who are eligible for the Basic Payment Scheme (BPS) will be eligible for SFI. This covers most farmland in England. In later years, when we are ready to take on new customers not already registered for BPS, we will remove the BPS eligibility requirement, so a wider range of farmers will become eligible for SFI. We do not expect to do this before 2024.

Land must be in England to be eligible for SFI. Cross-border land parcels will not be eligible for SFI in early rollout.

SFI will operate at a land parcel (field) level. This means that farmers can choose how many of their fields to enter into SFI standards – they do not have to enter their whole farm. This is to provide a low-risk way for farmers to enter into the scheme incrementally, rather than having an ‘all or nothing’ approach.

Normally, whole fields must be entered into the scheme because the actions make sense at a field level – and that is the basis for making payments. The only exception would be where part of a field is not eligible. In that case, we will pay for the portion of the field that is covered by the agreement, for example:

• if a field is part woodland and part arable, only the arable portion would be eligible for the arable soil standard
• if part of a field is in a Countryside Stewardship agreement, that part would not be eligible if the measures were overlapping (resulting in us paying twice for the same actions) or contradictory

There is no minimum or maximum amount of land that can be entered into the scheme. (To be eligible for BPS, a farmer must have at least 5 hectares of eligible land – but not all of this land would need to be entered into the SFI agreement.)

Agreements

SFI agreements will last for 3 years, with some flexibility for farmers to amend them every 12 months from their start date. This will give greater flexibility than current Countryside Stewardship agreements, which generally last for 5 years with minimal flexibility to amend.

Farmers will be able to increase ambition and coverage of their agreements at 12-monthly points. This will allow them to:

• incorporate additional standards as they become available
• add more land to agreements (including land coming out of Countryside Stewardship agreements when they end)
• increase ambition levels within standards

Among other things, this will give farmers who are new to agri-environment schemes the option of joining SFI with some of their land at the lower levels of ambition. They can see how it goes and, if they want to, increase their level of ambition and amount of land after a year or two. We know from our engagement with farmers that this is the sort of incremental route many would prefer to take when adopting new practices.

During their 3-year agreements, farmers will only be able to reduce ambition or coverage in exceptional circumstances (for example, where someone unexpectedly loses management control of some of their land). We will give more details on these circumstances ahead of launching the scheme.

We expect that farmers will renew their 3-year agreements when they end.

We expect that the standards and payment rates signed up to in 2022 will remain stable for the full 3-year agreements. After the initial 3-year period, we will adjust the standards and rates based on what we learn during early rollout.

Management control

Generally, SFI agreement holders must have management control of the land for the duration of their 3-year agreement. This is needed so they can deliver the actions required in the agreement, and so we can make sure we are paying the person who is actually producing the public goods. The person with management control is likely to be the person actively farming the land (such as an owner occupier, tenant or groups who farm on commons).

Farmers who farm land under a tenancy will be responsible for checking they have sufficient management control to fulfil their SFI agreement under the terms of their tenancy agreement. They will not be required to show they have their landlord’s permission before entering a SFI agreement, because we do not think that is necessary.

As a transitional measure during early rollout of SFI in 2022, farmers with between 2 and 3 years left on the tenancy term of tenanted land will be able to enter this land into SFI. In most cases, this tenanted land should remain in the agreement for the full 3 years, assuming the tenancy is renewed when it ends. However, if the tenancy is not renewed, the land could be withdrawn from the SFI agreement at the 24-month amendment point without any breach occurring, and with no penalty or recovery of earlier payments applied.

Farmers with less than 2 years left on tenanted land should not enter it into an SFI agreement. This is because we need to pay for the actions in the standards for a minimum period to get the environmental benefits. The main options in such cases would be either to renew the tenancy early or wait until the tenancy is renewed and then enter into SFI.

Where someone only has access to land under a licence arrangement (a licensee) it is unlikely they will have sufficient management control of the land for it to be eligible for SFI.

Defra will continue to work with tenant farmer representatives before and after the scheme launches to make sure the scheme works for tenant farmers. This will include looking at how we might be able to enable farmers with shorter or different types of agreements to participate in the scheme.

We set out later in this document how the scheme will work for those farming on common land.

Timing of applications

We will open an SFI application window in 2022, to allow us to make the first SFI payments before the end of the year. The window will be open for at least 10 weeks. It will be timed to minimise disruption with BPS claims and to allow people to make choices alongside other schemes such as Countryside Stewardship. We will confirm precise dates of the application window in the new year.

In later years (most likely after 2024) we will look to allow farmers to apply for and enter into SFI at any time of year, rather than having a defined application window.

Application process

We will make the SFI application process and any associated paperwork as straightforward as possible, so that farmers can manage it themselves and do not need to pay someone just to fill in the forms for them.

In recent months we have benefited from hundreds of farmers going through the application process for the SFI pilot. Based on that learning, we have made the standards clearer and more straightforward and practical for farmers to work with, while making a real difference to the outcomes we want to see. Before we roll out SFI in 2022, we will:

• simplify and shorten the guidance that accompanies the standards and make it easier to navigate
• simplify and improve the application process and associated paperwork
• make sure every aspect of scheme design matches our intent to make the scheme fair, accessible, attractive and effective in delivering outcomes

Payments

SFI payments will be paid in quarterly instalments, beginning from three months after each agreement starts. Each instalment will represent one quarter of an annual payment.

This will increase the frequency of payments compared to Countryside Stewardship and the BPS, which pay yearly in arrears. This is intended to help farmers manage their cashflow within the year.

Capital payments

There will be no capital payments available under the SFI standards in 2022. Capital payments will be introduced into SFI later in the rollout. We will release more details in due course.

In 2022, farmers will still be able to apply under other Defra capital offers (including Countryside Stewardship), alongside an SFI agreement.

Agreement monitoring

The SFI approach to agreement monitoring will be simpler, fairer and more proportionate than EU-based schemes.

We want to create an approach in which farmers acting in good faith (the vast majority) feel confident and supported – while taking effective action in the minority of instances where that’s not the case. This new approach is particularly important if something goes wrong – farmers should feel confident in explaining the situation, and confident that Defra will support them in getting back on track.

To achieve this, we are designing an approach in which:

• SFI standards and guidance will be clear – so farmers know what they need to do
• there is flexibility to allow farmers to take an approach that works on their farm in a way that still delivers the outcomes, rather than insisting on detailed prescriptions
• farmers are confident in how to demonstrate they have delivered the standards – they should know what evidence is needed, and not feel pressured to keep excessive evidence or worried about unfair penalties if something doesn’t work out according to plan
• self-assessment by farmers will be a key part of agreement monitoring – farmers will submit an annual declaration to confirm progress in delivering the agreement
• the self-assessment approach will be backed up by checks on eligibility and delivery of the standards – where possible, we will also use remote monitoring (such as satellites) to increase efficiency and ease for farmers and Defra
• where there is evidence of fraud or illegality, we will of course pursue that in line with the law on those issues

Inevitably, there may be cases where it has not been possible for a farmer to implement part of a standard, and so a payment adjustment needs to be made. Where things go wrong, we will first seek to help farmers to fix it, on a starting assumption of good faith rather than wrongdoing. The SFI (as with the new domestic Countryside Stewardship agreements) will not involve additional ‘penalties’ being applied on top of the adjustment. This moves away from the approach taken under EU-based schemes.

The SFI will also move away from the approach under previous schemes, where farmers had payments withheld on suspicion of a breach. Sometimes this led to payments being withheld for long periods when a breach had not actually occurred. Generally, under SFI (unless there are exceptional circumstances) we will wait until it is clear a breach has occurred before deciding whether action needs to be taken.

Regulation underpinning the scheme

We are updating the Agriculture (Financial Assistance) Regulations 2021 to apply to the SFI scheme. Among other things, they have:

• sections on payments, monitoring and record keeping
• what would constitute a breach
• actions that can be taken if there is a breach
• reconsideration of decisions
• appeals

The updated regulations will underpin and reflect the approach set out in this document.

Common land

Common land will be eligible for the SFI through group agreements.

Those farming or managing the common will be responsible for reaching consensus among themselves, before applying, and for maintaining consensus while they are in the agreement. They understand the unique circumstances of their own common, and only they can decide how they wish to proceed.

Each group of commoners will be responsible for working through a ‘single entity’ to act on behalf of the group in all dealings with Defra. This single entity will make the application and will be the single point of contact for all interactions relating to the agreement.

It is for individual groups to form their single entity. Our expectation is that an existing commons association would be the single entity. If just one person has sole use of a common, they can be the single entity.

Defra is not responsible for forming consensus among groups, forming single entities, or resolving disputes within associations or other groupings. However, Defra will issue guidance to help groups achieve this. There is existing Countryside Stewardship guidance, and we will use this as a starting point.

A common will be considered to satisfy the test for BPS eligibility if one or more people have used the common to claim BPS in the last 2 years. Unlike most SFI agreements, some groups could involve some non-farmers in addition to farmer-commoners.

Defra will only enter into SFI agreements if there is good reason to believe the agreement can be delivered. For this to be the case, the single entity will need to declare that they have sufficient management control to deliver the agreement.

‘Sufficient management control’ means that the group has enough control of the common to deliver the agreement for the duration of the agreement. This is a judgement for the single entity to make. It does not necessarily mean that every single commoner needs to agree and become part of the single entity, but it does mean that those that are party to the single entity need to be able to deliver the actions in the agreement.

To have sufficient management control, the group will need to consider whether the landowner needs to be a party to the single entity or otherwise provide their consent.

Those making an SFI application must notify all other known parties with a legal interest in the common of their intention to apply for SFI. This is to ensure all commoners and landowners are aware of what is being proposed. It is also part of establishing sufficient management control.

The RPA will make payments to the single entity, which will be responsible for deciding how money will be divided between members of the group. The RPA and Defra have no role in deciding how money is divided or resolving any associated dispute that may arise within the group.

Defra recognises the extra administrative complexity of forming and operating via a single entity. We will reflect this extra cost in SFI payments and will give more information in the new year. We are looking into options on provision of facilitators and convenors in the context of the new environmental land management schemes.

Farmers will need to make a separate application for their own land (land they own or rent that is separate to the common) unless they have sole use of the common.

Defra will continue to work with commons representatives before and after the scheme launches to make sure the scheme works for commoners. Among other things, we will look at how arrangements used for existing agri-environment agreements on commons can expedite the process of entering into SFI agreements.

Organic farms

We recognise the benefits that organic farming can offer to the wider environment. We are currently exploring how the SFI can reward organic producers and those wishing to convert to organic systems in line with the payment principles we published in June 2021 – including a future organic standard, which provides an easily accessible, holistic package for organic farmers.

Organic farmers can take part in the early rollout of the SFI and are likely to be well placed to adopt the higher levels of ambition in the soils standards. Organic producers can also join the Countryside Stewardship scheme in addition to an SFI agreement. This is subject to the normal rules around not being paid for the same action twice, and not being paid to undertake incompatible actions on the same parcel of land.

Interaction of SFI with private sector schemes

Farmers will be able to enter land into SFI if that land is in a private sector scheme (such as carbon trading, payments for natural flood management, biodiversity net gain credits, or nutrient trading). They can also enter land into such schemes after they join SFI. In other words, a farmer can engage in SFI and a private scheme for the sale of environmental outcomes on the same area of land, subject to the rules and requirements of those schemes including on additionality and verification.

This position will be reviewed in 2023 and annually thereafter to account for developments in private environmental markets. We will ensure that we are not crowding out private finance and that land managers are better off where they access private markets. We also wish to avoid paying for the same actions that are already being paid for in a private scheme. At this stage we judge that risk to be very low, given the number and nature of SFI Standards we plan to launch in 2022.

Standards

As explained in the June 2021 update, standards will be introduced incrementally into the SFI over the next few years. This section gives an overview of standards to be included in early rollout from 2022, and how we see the pipeline of future standards developing.

Standards for 2022

The three standards that will be available in the early rollout of SFI are:

• the Arable and Horticultural Soils standard
• the Improved Grassland Soils standard
• the Moorland and Rough Grazing standard (introductory level)

We will also pay for an annual health and welfare review for livestock.

The soils and moorland standards were chosen for early rollout because they apply to most farmers in England and they will bring significant benefits, including for carbon and biodiversity.

Also, there is little overlap between these standards and existing agri-environment schemes. In the case of soils, previous schemes have indirectly promoted soil health but with limited uptake, so this is an area we want to address early in SFI rollout.

We have set the payment rates for the three standards to put us on a path towards delivering upon our environmental objectives, while ensuring that farmers are appropriately compensated for the additional cost of undertaking the standards beyond regulatory requirements and existing widespread good practice. We will review payment rates at regular intervals and, when necessary, adapt them for future rounds of the scheme to ensure they remain fair, attractive and good value for money.

Annex A sets out how payments in the early roll out of SFI are consistent with the environmental land management scheme payment principles we published in June 2021.

Our existing schemes will continue to be available until 2024, including extensive offers for upland and unimproved grassland farms which are less well covered in early rollout of SFI. Upland and unimproved grassland farmers should enter into or continue in those schemes and we will provide a smooth way for them to transfer into SFI when the relevant standards are ready.

As part of the application process, farmers will need to check that implementing a standard will not have a negative impact on important features (for example on sites of special scientific interest, scheduled monuments or other relevant aspects of our historic environment) and get relevant regulatory permissions.

Soils standards

Soils are one of our most important natural assets. These standards will improve soil health, structure, organic matter, and biology. This will promote clean water, and improve climate resilience, biodiversity, and food production – contributing to a range of environmental and climate change outcomes.

We published draft versions of the soils standards in June 2021. Since then we have simplified them, taking account of feedback from farmers and stakeholders. The standards only pay for actions that go beyond regulatory requirements and existing widespread good practice.

Summary of the arable and horticultural soils standard

Farmers can choose whether to do the introductory or intermediate level. The rates set out below are total payments for this standard per hectare. For example a farmer doing the introductory level would get £22 per hectare; and a farmer doing the intermediate level would get a total of £40 per hectare (not £22 plus £40 per hectare).

Introductory level – £22 per hectare

• test soil organic matter
• undertake a soil assessment and produce a soil management plan
• 70% winter cover to protect soil:
  • at least 70% of land in the standard must have green cover over the winter months (Dec-Feb)
  • this can include any kind of green cover, including autumn sown crops and weedy stubbles
• addition of organic matter:
  • add organic matter to 1/3 of the land in the standard each year
  • this can include any kind of organic matter, including sown green cover crops

Intermediate level – £40 per hectare

• test soil organic matter
• undertake a soil assessment and produce a soil management plan
• 70% winter cover to protect soil:
  • at least 70% of land in the standard must have green cover over the winter months (Dec-Feb)
  • this must include land with multi-species green cover – covering at least 20% of total land in this level of the standard
• addition of organic matter:
  • add organic matter to 1/3 of the land in the standard each year
  • this will include multi-species green cover grown under the cover crop requirement above, plus the rest made up of other ways to add organic matter as per the introductory level

Advanced level

We plan to add an advanced level to this standard from 2023 onwards. It’s likely to include use of no-tillage techniques.

Summary of the improved grassland soils standard

Farmers can choose whether to do the introductory or intermediate level. The rates set out below are total payments for this standard per hectare. For example a farmer doing the introductory level would get £28 per hectare; and a farmer doing the intermediate level would get a total of £58 per hectare (not £28 plus £58 per hectare).

Introductory level – £28 per hectare

• test soil organic matter
• undertake a soil assessment and produce a soil management plan
• 95% green cover to protect soil (no more than 5% bare ground over winter)

Intermediate level – £58 per hectare

• test soil organic matter
• undertake a soil assessment and produce a soil management plan
• 95% green cover to protect soil (no more than 5% bare ground over winter)
• Establish or maintain herbal leys to improve soil health on at least 15% of land in the standard

Advanced level

We plan to add an advanced level to this standard from 2023 onwards.

Detailed description of soils standard actions

This section gives a more detailed description of the actions summarised above.

Test soil organic matter (both standards)

What: Each year, you must ensure your soil has been tested for soil organic matter (SOM) within the last 5 years. This applies to all land parcels entered into the standard. If you have already done a SOM test for some or all of your land, that is fine until it gets to 5 years old, when you’ll have to re-do it. If you have not got an analysis for some or all land yet, you will need to get it done for this land within the first year of the SFI agreement. The results are to inform your soil management practices and will not be collected by Defra to monitor addition of organic matter.

When: See above. You may choose to carry out this action at the same time as your other routine soil testing required in Farming Rules for Water.

How: There are a number of commercial providers in the market.

Undertake a soil assessment and produce a soil management plan (both standards)

What: Undertake an assessment of your soil and produce a soil management plan. Use it to identify ways in which you can improve the health of your soil.

When: Produce the plan in the first year of your agreement and then review it annually, adding in any new soil analysis you undertake.

How: It’s up to you precisely how to achieve this. We will provide guidance and suggested templates.

No bare ground over winter (improved grassland – introductory and intermediate levels)

What: You must ensure no more than 5% of the total area of land entered into the standard is left bare (or becomes bare) over the winter months. No land at high risk of erosion or runoff should be left bare over the winter months.

When: There must be no bare ground from the start of December until the end of February each year.

How: It’s up to you precisely how to achieve this. Methods might include:

• ensuring early establishment of re-seeds
• preventing livestock poaching wet ground
• sensitive management of supplementary livestock feeding

Winter cover (arable and horticultural – introductory level)

What: You must ensure that at least 70% of the total area of land entered into the standard has green cover over the winter months. No land at high risk of erosion or runoff should be left bare over the winter months.

When: The green cover must be well established by the start of December until the end of February each year.

How: It’s up to you precisely how to achieve this. Methods might include: autumn-sown crops, establishing a quick-growing cover crop, or leaving weedy stubbles in place over winter. It is permissible to destroy the cover crop before the end of February to establish an early sown spring crop where ground conditions allow, but this can be no more than 6 weeks before establishment.

Winter cover (arable and horticultural – intermediate level)

What: You must ensure at least 70% of the total area of land entered into the standard has green cover over the winter months. This must include land with multi-species green cover (covering at least 20% of total land in the intermediate level of the standard). No land at high risk of erosion or runoff should be left bare over the winter months.

When: The green cover must be well established by the start of December until the end of February each year.

How: It’s up to you precisely how to achieve this:

• Defra will provide guidance on ways to establish multi-species green cover – farmers can choose the right method for their situation
• for the remaining land in the standards, methods might include: autumn-sown crops, establishing a quick-growing cover crop, or leaving weedy stubbles in place over winter
• it is permissible to destroy the cover crop before the end of February to establish an early sown spring crop where ground conditions allow, but this can be no more than 6 weeks before establishment

Addition of organic matter (arable and horticultural – introductory level)

What: You must take measures to improve soil health by adding to the organic content of soil on all land parcels entered into the standard over the course of the 3-year agreement. Measures should be taken on every land parcel in the standard at least one year in the 3-year agreement (for example as part of your crop rotations).

When: You need to have done this on all land in the agreement by the end of the agreement.

How: It’s up to you precisely how to achieve this. We will provide guidance on the possible ways to do this and encourage the use of the most effective methods to build soil health. Examples of how to add organic matter to your soil include:

• apply organic matter or manure
• use green manures, catch crops or cover crops
• chopping and leaving (or incorporating) straw
• introducing grass or herbal leys into an arable rotation
• including legume species or legume rich mixes in rotations

Addition of organic matter (arable and horticultural – intermediate level)

As above (although at this level, you can achieve some of this action through the multi-species green cover you will establish to meet the winter cover requirement). You can also use the other methods listed above to meet the rest of the requirement.

Undertake measures to improve soil health (Improved grassland – intermediate level)

What: You must take measures to improve soil health by establishing a diverse sward – with a mixture of grasses, legumes, herbs, and wildflowers – to provide varied root structures on at least 15% of the total area of land entered into the standard. This could be a single area of land for the duration of the agreement, or different areas each year.

When: You need to have established the sward within the first year and maintain it throughout the period of your agreement.

How: We will provide guidance on how to do this, but there will be flexibility for farmers to decide the right mix for their farm.

Moorland and rough grazing standard – introductory level

The introductory level of the moorland and rough grazing standard is focused on assessing moorlands soils and habitats, and their condition. The assessment is designed to be simple for farmers to carry out themselves, using the guidance and training we will provide.

This standard will apply to land above the moorland line. The moorland line is used for defining eligibility for BPS payments, so moorland farmers eligible for SFI will understand the term.

This standard is not yet finalised. We will conduct further engagement with uplands stakeholders before finalising it in the new year.

Through the introductory level of this standard, farmers will undertake actions to assess the range of habitats and features present on their individual moorlands. This will contribute to a greater understanding of the potential of each moorland area to deliver public goods and directly feed into future elements of the SFI and other schemes.

Later in the rollout of SFI, we will add more levels of ambition to the standard, to allow people to be rewarded for those actions through the same scheme. In the meantime, we will direct people towards the extensive range of existing options in Countryside Stewardship and other relevant schemes (including the Farming in Protected Landscapes scheme, in areas covered by that scheme).

In the period before 2024, we want this standard to complement the existing schemes, but not duplicate them. So, initially, the moorland standard will only cover things not already in the Higher Level Scheme (HLS) or Countryside Stewardship (CS) – and we will encourage all moorland farmers to join SFI in addition to these existing schemes. The Countryside Stewardship scheme offers an extensive range of options for moorland farmers.

The HLS, CS and SFI schemes combined will provide an income source for upland farmers who want to be part of these schemes.

Draft moorland and rough grazing standard – summary

Introductory level

Indicative payments: £148 fixed per agreement per year, plus additional variable payment rate of £6.45 per hectare

• verify and record soil types, including peatland, and associated vegetation
• evaluate the public goods potential and condition of the moorland
• identify opportunities to maintain or enhance public goods

Intermediate and advanced levels

• to follow later in SFI rollout
• in the period 2022-24, the introductory level of this standard should be seen alongside CS and HLS agreements, and other schemes such as Farming in Protected Landscapes. SFI will focus on assessment and planning for the future – while CS and HLS will continue to fund physical actions

Introductory level actions

Verify and record soil types, including peatland, and associated vegetation

What: Carry out an assessment of soil types, peat status (including depth and wetness), and vegetation of all land entered into the standard, and its condition, through a sample-based approach.

When: One sample per 10 hectares each year, at different points. The record of your assessment will be reviewed by you annually and updated where required.

How: You must complete a record of your assessment including photographs. We will provide guidance, including recording templates, and training for completing your assessment.

Evaluate the public goods potential and condition of the moorland

What: Use the information on soil and vegetation condition you have recorded in your assessment to identify the public goods your moorland can deliver.

When: Once you have completed the annual sample-based assessment of your moorland (as set out above). The record of your evaluation will be reviewed by you annually and updated where required.

How: We will provide guidance and training for completing your evaluation.

Identify opportunities to maintain or enhance public goods

What: Using the information collected in your assessments, identify and record where improving the condition of your soil and vegetation could maintain or enhance public goods delivery.

When: Complete this action each year once you’ve completed your annual assessment.

How: Produce a summary of opportunities to maintain or enhance public goods. We will provide guidance and training to help you do this.

Introduction of future SFI standards from 2023

SFI is being rolled out alongside existing schemes (such as Countryside Stewardship, Farming in Protected Landscapes and the England Woodland Creation Offer), and we are continuing to improve those schemes and take new applications for them. SFI will be fully available, along with other environmental land management schemes, by 2025.

For SFI to be a comprehensive offer from 2025, we need to ensure that the vast majority of farmers and growers can participate in the scheme and that the SFI standards deliver our environmental objectives.

We plan to introduce more standards incrementally between 2023 and 2025, with the full range being available from 2025 onwards. Existing schemes will continue to be available during that time, with the last applications for new Countryside Stewardship agreements in 2023, to start in 2024. From 2025, it will only be possible to enter into new agreements through our new environmental land management schemes.

As far as possible, we will use the SFI pilot and other research, engagement and co-design activities to ensure that SFI standards are straightforward, deliverable and have been tested in real farm settings. We will test new standards in the pilot for a minimum of 12 months before we roll them out to the live service. Piloting may be extended in some cases. We don’t need to do as much testing for standards that consist mainly of actions that are already well established in existing schemes.

In early 2022 we will publish a detailed consultation on proposals for our legally binding targets required under the Environment Act 2021. Targets will then be laid before Parliament by October 2022. Interim targets and more policy detail on target delivery will be included in the Environmental Improvement Plan in January 2023.

We will continue to refine how the rollout of standards in SFI and other environmental land management schemes will support the delivery of our environmental and climate goals based on the latest science and analysis. For instance, this might involve more up-front actions required to support the delivery of our 2030 species abundance target, or our carbon budgets and net zero target.

We are planning the rollout of standards to:

• deliver more and better outcomes as early as possible in the transition
• make the scheme accessible and attractive to a wide range of farm types and settings
• deliver in an incremental way over time rather than taking a ‘big bang’ approach

We might change our plan based on what we learn over the next year. If so, we will publish updates through our programme blog. Please subscribe to the blog to ensure you see those updates.

We will only release standards into the live service when we are confident in their design and our ability to successfully deliver the service.

Introduction of standards into SFI – 2022 to 2025 (note: details might change)

2022 (confirmed)

• arable and horticultural soils
• improved grassland soils
• moorland and rough grazing (introductory level)
• annual health and welfare review

2023 (indicative)

• nutrient management
• integrated pest management
• hedgerows

2024 (indicative)

• agroforestry
• low and no input grassland
• moorland and rough grazing (all levels)
• water body buffering
• farmland biodiversity

2025 (indicative)

• organic
• on-farm woodland
• orchards and specialist horticulture
• heritage
• dry stone walls

Annual Health and Welfare Review

In 2022, SFI will fund a yearly farm visit from a vet or vet-led team – the Annual Health and Welfare Review.

The Annual Health and Welfare Review is the first step on the Animal Health and Welfare Pathway. It is designed to:

• help reduce endemic diseases and conditions within livestock
• promote responsible use of veterinary medicines
• improve welfare and increase farm productivity
• build on the strong relationships that exist between farmers and vets

By funding the annual health and welfare review, we aim to increase farmers’ awareness of the health and welfare of their livestock (beyond what are in many cases already high levels), and the options available to them to address any issues.

And, by raising awareness in this way, we aim to encourage and enable farmers to take action to improve animal health and welfare, including directing them towards other sources of grant funding and advice. We also aim to understand more about the health and welfare of the national herd and flock to inform national policy and interventions.

We will know if the annual health and welfare review has been successful when we see:

• larger-scale adoption of annual reviews as part of normal business practice
• more farmers taking more action to improve health and welfare
• improved outcomes in relation to endemic diseases and conditions and improved welfare and reduced waste and financial losses as a result

Who is eligible?

The offer will initially be available to farmers in England who are:

• keepers of cattle, pigs and sheep with more than 50 pigs, 20 sheep or 10 cattle
• currently eligible for BPS

We aim to make the Review available to those not currently participating in the BPS as soon as possible. What is involved?

Defra will fund a yearly visit from a vet (or vet-led team), chosen by the farmer, to each participating farm. This funding will be available for three years, after which we will review the situation. Each annual visit is expected to take approximately 2 to 3 hours of veterinary and farmer time. While these visits do have common, core elements (see below), they are designed to be flexible, allowing the vet and farmer to focus on the most important areas for each farm.

The following elements are relevant to all commercial pigs, sheep, beef, and dairy keepers:

• a discussion with the vet about the health and welfare of the animals, as well as biosecurity, and agree achievable actions for the farmer to take as a result
• diagnostic testing, which will initially focus on identifying priority endemic diseases or conditions in cattle (Bovine Viral Diarrhoea), pigs (Porcine Reproductive and Respiratory Syndrome virus) and sheep (anthelmintic resistance). These priorities have been co-designed with industry, to ensure they focus on health issues that matter to farmers, as well as delivering benefits for the national herds or flocks and environment
• a discussion around medicine usage on farm and the responsible use of medicines, including antibiotics and vaccinations. This includes a recommendation to upload medicines usage to relevant central e-medicines book or hub. The review would also look at opportunities for other actions such as pain management
• collection of data – the data collected will only be used for improving our understanding of the health and welfare of the national herd and flock. It will not be used by Defra for any regulatory or inspection activity
• recommendations and monitoring, which will include:
  • a report from the review agreeing specific priority recommendations to improve health and welfare
  • advice about ongoing monitoring to identify how things are changing throughout the year
  • advice on how to record data as part of the review
  • signposts to further support

When will this offer be available

From spring 2022 onwards, as part of the SFI early rollout.

Payment rates

The payment rates for the Annual Health and Welfare Review have been refined based on the priority testing required in collaboration with farmers and vets. The rates (per review) will be:

• pigs - £684
• sheep - £436
• beef cattle - £522
• dairy cattle - £372