England's 2026 sustainable farming incentive (SFI) ran out of money within six hours of opening on Tuesday, leaving farmers who missed out facing the reversal of environmental efforts on their land.
Farmer Peter Hatley, who runs a 240-hectare family farm in Cambridgeshire, logged on at 10am when applications opened but was met with repeated error messages. He called the government's helpline, which he says acknowledged problems with the scheme, but by the time the issue was fixed, the money had gone.
“We tried our utmost. We were fully prepared; everything was checked and triple-checked and through no fault of our own we were denied this opportunity. I’m shell-shocked,” he says.
Funding Scramble
By 4pm on Tuesday, just six hours after it launched, the SFI had run out of money after a rush some compared with “the scramble for Oasis tickets”. The scheme is part of a package of payments that replaced the EU's common agricultural policy, paying farmers to look after nature, soil and other public goods rather than simply for farming and owning land.
Figures suggest that up to 10,000 farmers with funding agreements expiring in March 2027 either chose not to apply or could not apply.
Hatley says his farm could historically weather uncertainty with confidence that a bad harvest would likely be followed by a good one. But with a rapidly changing climate, this is no longer guaranteed.
“In 2024 we had extreme rain, in 2025 a lack of rain caused depressed yields and then this year, I mean, it’s 25C at the end of September. We’re at breaking point. We can’t ride this storm,” he says.
Impact on Farming Practices
Farmers across the country are reporting a devastating outlook, with crop-destroying heat and drought, and soaring fertiliser costs tied to the war in Iran adding pressure to an already challenging few years.
Hatley has spent years diversifying his farm and creating space for nature but says without the SFI funding he has no choice but to reverse this.
“I will undo all the hard work over the last 20 years and move to a mono crop with maize. It’s not a threat, it’s what I will do for my family. It will break our hearts but my children come first. I’m just thankful my father is not here to see it,” he says.
“The skylarks, the lapwings, they’ll go. I’ll have to put more cows on my grass so the bugs and the dragonflies will suffer. If I said this to anybody else, it would sound like blackmail, but it’s not; it’s a business fact. How do I explain to the bank manager that I can’t afford to pay my mortgage this month because I put wood pigeons and birds of prey first?”
Farmers' Reactions and Government Response
Martin Lines, chief executive of the Nature Friendly Farming Network, said the speed at which funding ran out showed the “desperation” many farmers were experiencing.
Mat Cole, an uplands farmer in the south of England, could not log in at launch because he was at market day. He rushed home and by noon was ready to apply, but after preparing his application, he submitted it at 3.50pm and received an error message.
“I then understood they had run out of money,” he said. “I thought I probably had a week or so to apply.”
Cole is now uncertain whether he can continue with the environmental improvements he has been making on his farm. “We’ve engaged with these schemes to try and improve our environment. We’ve used the money to improve hedgerows, grasslands and water quality. To have the drawbridges pulled up like that, it’s just shambolic,” he says.
The last few years have presented farmers with financial challenges on top of a changing climate. Brexit meant losing access to the basic payment scheme (BPS), which is being phased out and replaced by a complex system of environmental management funds that seem more likely to run out or be unexpectedly wound up. Basic costs for fuel and inputs are also soaring due to global conflict.
The National Farmers’ Union is calling on the government to commit now to the 2027 SFI scheme. “For food-producing businesses already questioning whether they can survive the year ahead, this clarity is critical,” said Robyn Munt, the union’s vice-president.
Farming Minister Stephen Morgan said: “Farmers will receive almost a third of a billion pounds each year for three years under new SFI26 agreements. That’s nearly a billion pounds invested in resilient farming.
“Previously a quarter of funding headed to just 4% of farms making claims. That’s why this government developed a fairer system to reach more farmers by capping applications at £100,000 and ensured small farms and those new to environmental land management schemes were prioritised.
“I know some farmers who wanted to join SFI26 will be deeply disappointed not to have secured an agreement during Window 2, particularly given the challenges the sector has faced this year. I have heard those concerns and am determined to work closely with farmers as we learn lessons from this year and shape SFI27, including exploring alternatives to a first-come, first-served application process.”
