The Sustainable Farming Incentive

Farm and General understands the concerns around sustainable farming incentives and how this could affect insurance for your farm. We take a closer look at the Sustainable Farming Incentive (SFI) and how it works.

What is the Sustainable Farming Incentive? 

In its most basic terms, the Sustainable Farming Incentive (SFI) is one of the three arms of the Department for Environment, Food & Rural Affairs‘ (DEFRA) environmental land management schemes launched in June 2022. Farmers are set to be rewarded for carrying out specific land management undertakings on a journey to sustainability, while increasing food productivity long term.

Part of the government’s Path to Sustainable Farming includes changes to ensure that, by 2028, farmers can sustainably produce healthy food profitably and without subsidy. Environmental, animal health and welfare, and carbon emissions should see improvement, while rewarding farmers and land managers for their sustainable farming practices. Farmers will be paid for taking steps toward sustainability, measured against water quality, biodiversity, animal health and welfare, and climate change mitigation alongside food production. Defra has an expected, albeit ambitious, target of 70% of farms and farmland to be part of the scheme by 2028.

How Will the SFI Scheme Work? 

In 2022, farmers will be paid between £20/ha and £58/ha to protect soils. These payments will be made quarterly, equalling 25% of the overall sum. Improving soil health was the primary goal of SFI and the below soil standards will be available early on in the rollout:

  • Arable and horticultural
  • Improved grassland
  • Moorland and rough grazing

Moreover, Defra has confirmed it will fund a yearly vet visit for a health and welfare review of livestock, but this will only be applicable to those eligible for the Basic Payment Scheme grant and hold more than 50 pigs or 20 sheep/cattle.

Will the SFI Scheme Affect my Insurance Cover?

Depending on the changes your farm makes to comply with the SFI Scheme, you may have to revisit your insurance policy and revise the level of cover. Changes to the quantity of land managed, the type of farming you do, and the types of vehicles employed, will have an impact on the final policy.

How Can Farm and General Help?

If you have any questions on how sustainability schemes could impact your farm insurance, contact one of our friendly advisors today, who are happy to discuss your changes.

Learn more about our arable, livestock and other farm insurance policies or request a quote.