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The new Sustainable Farming Incentive explained

This post is by Jonathan Baker, deputy director for programme policy, engagement and strategy in Defra’s future farming and countryside programme.

It’s the look of excitement that gets you. Working with the Foreign, Commonwealth and Development Office (FCDO), I and other Defra officials are talking to civil servants around the world about how, in the run up to COP26, our reforms to agricultural policy in England represent a model for other nations to address the nature and climate crises.

When I tell my global colleagues that we’re replacing subsidy with payments for environmental outcomes there’s a definite pause and flash of excitement before the questions come.

It’s easy to forget how genuinely world leading what we’re doing through the Environmental Land Management schemes is. No other country in the world is planning to replace subsidy primarily with environmental payments. I should know, I’ve looked.

That excitement contrasts with what can, at times, be a look of begrudging acceptance when we talk about the Sustainable Farming Incentive with environmental NGOs.

Environmental Land Management is a package of schemes
It’s worth reflecting on the Sustainable Farming Incentive as part of the package of Environmental Land Management schemes. The differences between the schemes are less about levels of ambition, and more about what they are targeting and the scale of actions.

In designing them, we think the Sustainable Farming Incentive is the answer to the following questions: do we want most or all farmers to do it? Is it relatively simple to implement, without extensive advice? And can it be done in the same way everywhere?

What about the other schemes? Local Nature Recovery is the answer to the following questions: do we need to do it only in the right places? Is the action more likely to need advice to get right? And does it require making space for nature?

Whereas Landscape Recovery is what you’re looking for if you’re considering action at large scale, that might require long term land use change and is best achieved through collaboration or partnership.

As a package Environmental Land Management will complement other measures such as biodiversity net gain, private finance and conservation covenants to hit our challenging but necessary environmental targets. Nature doesn’t wait. Whilst we trial and roll-out new schemes we continue to invest in Countryside Stewardship and accelerate tree planting and peat restoration through Nature for Climate, before these offers are also folded into Environmental Land Management.

Huge and transformative change is possible via the Sustainable Farming Incentive
For the Sustainable Farming Incentive, when you start considering the actions that answer the above questions, there is a huge and transformative set of changes possible. Initially we’re focusing on soil.  As Green Alliance notes: “Halting, and ultimately reversing, declines in soil and water quality will be essential to preserve the long term prosperity of UK farming”. Our soil standards will increase our resilience to climate change, improve water quality and save as much as 60,000 tonnes of CO2 each year from 2023 to 2027. Not a bad place to start.

In terms of what next, we expect the Sustainable Farming Incentive to do most of the heavy lifting across the farmed landscape to help reduce the application of pesticides, through integrated pest management; improve water quality, by improved nutrient management, buffer strips and reducing soil tillage; and decarbonise agriculture by, for instance, replacing nitrogen fertiliser application and adding herbal leys into arable rotation; support wildlife by, for instance, creating more and better managed hedgerows (our most extensive habitat home to 130 priority species) and buffer strips across England.

The Sustainable Farming Incentive is designed to help meet the government’s environmental commitments
The incentive, therefore, represents a huge part of how Defra will meet relevant parts of the 25 year environment plan and legally binding commitments. It has the potential to do these things because we are designing it with farmers to create a flexible and responsive scheme which allows as many of them as possible to do great things.

The scheme is designed around standards with multiple levels of ambition. Using standards, we can combine those activities which, after 20 years of designing and monitoring environmental land management schemes, we know are most effective together.

Farmers manage 70 per cent of England’s land. Looking to 2050, the expectations and opportunities for land use and, therefore, for farmers to contribute to nature restoration and net zero will continue to increase. We’ve designed the Sustainable Farming Incentive to adapt to those changes.  For instance, we can tweak the standards, adapt its ambitions and bring in new ones as we respond to the needs of farmers and the environment, and as we learn more about what works. We’ve been clear that we won’t pay for actions required by regulation through the incentive. As and when the regulatory baseline evolves, the content and scope of the scheme can also adapt.

Flexibilities in the scheme mean we can work with farmers, experts and, of course, NGOs to track what is working and keep the scheme focused on solving our shared challenges.

The Environment Bill will act as a compass
Our new targets under the Environment Bill, including our historic target to halt the decline in species abundance by 2030, will act as our compass, keeping all our schemes concentrated on the big challenges.

The Sustainable Farming Incentive will only work if farmers want to deliver it. That is why, through the pilot and working directly with farmers, we’re making sure the scheme is simple for them to use and works with their businesses, as well as delivering for the environment. We want to see a thriving biodiverse countryside, with a net zero, resilient agri-food sector selling world-leading sustainable produce around the world.

Considering the importance of these reforms there is a right to retain healthy scepticism. We’re working in the open through our blogs, our tests and trials and now through the Sustainable Farming Incentive pilot. We’ve committed to providing more information about the incentive in November this year, as well as further details on Local Nature Recovery and Landscape Recovery, which are also developing rapidly.


To find out more about the Sustainable Farming Incentive, subscribe to Defra’s blog  and e-alerts.

Written by

Green Alliance is a charity and independent think tank focused on ambitious leadership and increased political support for environmental solutions in the UK. This blog provides space for commentary and analysis around environmental politics and policy issues as they affect the UK. The views of external contributors do not necessarily represent those of Green Alliance.

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