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Following the decline of the Basic Payment Scheme and the tail off of delinked payments, the topic of farming subsidies is on everybody’s lips. A sudden halt in acceptance of Sustainable Farming Incentive (SFI) applications in 2025 proved a considerable challenge for farmers across the nation, and the grey cloud over the future of Countryside Stewardship (CS) has only heightened concerns. We now know that CS Mid-Tier will be replaced by the new SFI scheme which will be rolled out later this year.

In September 2025, the Department for Environment, Food & Rural Affairs (DEFRA) announced that a phased rollout of a CS Higher Tier (CS HT) scheme would follow in 2025 and 2026. In its infancy, the CS HT scheme is on an invitation-only basis but will expand as time goes on. The new scheme encapsulates 132 actions to protect and enhance the environment, alongside 142 capital items to support the delivery of Higher Tier actions. Updated guidance can be found on the GOV.UK website here.

Baroness Batters’ Farm Profitability Review in December 2025 highlighted the reliance of modern farming enterprises on supplementary income which can be derived from both agri-environment schemes, CS and SFI. It calculated that 52,000 farming businesses were involved in either SFI or CS as at April 2025. Payments to such enterprises during 2024 totalled £1.3 billion. When considering that the SFI scheme launched in 2021 with 900 farmers, the scope of payments have proven a saving grace for so many.

The Environment Secretary, Emma Reynolds MP, announced the new SFI offer at the Oxford Farming Conference on 8^th January 2026. The canvas remains rather blank, and DEFRA has yet to flesh out many of the details which we are all seeking answers to.

So, what do we know so far?

The new offer seeks to be an improved version of the ‘old’ SFI, with three main drivers:

1. Simplicity and focus
2. Greater fairness and accessibility
3. Certainty and transparency

The new offering will limit the amount of land that can be put into actions that draw it out of production, therefore meaning that the scheme will better compliment food production in the UK. Payment rates for such actions are also being reviewed.

The Government has set a target of doubling the number of farms providing sufficient year-round resources for farm wildlife by the end of 2030, compared with those figures in 2025.

Most importantly, there will be two application windows in 2026. The first of these is due to open in June and will be directed at those with small farms and those without current CS or SFI agreements. The second window will open in September to all farmers, including those captured by the first window.

Budgets are set to be clarified prior to each application window, and regular updates will ensure that farmers will know when funding is near to being fully allocated. To our great relief DEFRA has confirmed that application windows will not close without warning.

In working with stakeholders between now and June, DEFRA is set to clear up the currently muddy waters around definitions. This will include publishing a definition of ‘small farm’ and ‘farms with no existing Environmental Land Management agreement’ prior to the June application window.

DEFRA encourages farmers and those in agriculturally-based occupations to subscribe to their Farming Blog online in order to receive the latest updates as they are published. Answers to questions thus far are somewhat limited, and it will be a matter of us all lying in wait until the next developments are announced in due course.

Should there be any queries on the matters discussed within this article, please contact a member of the Rural team.