NSA urges sheep farmers to act as half of SFI26 Window 2 budget goes in two hours

National Sheep Association (NSA) welcomes the opening of Window 2 of the Sustainable Farming Incentive 2026 (SFI26) and the £233m behind it. Sheep farmers in England must not wait to apply.

Defra confirmed within two hours of opening the scheme that 50% of the Window 2 budget had already been allocated. Without a closing date the scheme closes once the money is spent, and any application started but not submitted at that point will not be accepted.

Phil Stocker, NSA Chief Executive, says: "This is a real opportunity for sheep farmers, and the additional £50m rightly recognises the pressure drought and rising costs have placed on sheep farmers this year. But the speed of Window 1, and now the first day of Window 2, tells us this is a scheme for the prepared. If your digital maps are correct and you know which actions suit your land, the advice from NSA is to apply this week."

What SFI26 offers sheep farmers

SFI26 pays for 71 actions across grassland, moorland, hedgerows, soils and wildlife habitat, most of them lasting three years and paid quarterly. No specialist adviser or prior endorsement is needed to apply. 

Sheep farmers already in an SFI23 or SFI24 agreement can still apply for SFI26, provided the actions are compatible and there is no double funding. 

Expiring agreements: the new apply early route

NSA particularly welcomes the new functionality for farmers whose existing agreements are coming to an end. Many sheep farms, and upland farms especially, sit in Higher Level Stewardship (HLS), Countryside Stewardship Mid Tier or SFI23 agreements due to expire in the coming months. For the first time, these businesses can apply now for the full range of SFI26 actions on that land, with the new agreement starting after the old one ends.

This applies to SFI23 agreements ending between 30th September 2026 and 28th February 2027, Mid Tier and legacy Higher Tier agreements ending 31st December 2026, and HLS agreements ending by 28th February 2027. Agreements ending 1st March 2027 or later are not eligible for this route.

Mr Stocker says: "Continuity of income matters enormously to sheep businesses, and the apply early route removes a gap that has caused real anxiety in the past. It is a sensible change and NSA thanks Defra and the Rural Payments Agency for listening."

Where NSA see opportunities for development

The scheme still excludes common land and shared grazing, which represents a large share of upland sheep grazing in England. NSA has raised this with Defra and will continue to do so as the 2027 offer is designed. The 3ha minimum removes the smallest holdings, and there is no longer a management payment to cover the cost of administering an agreement. Each business is limited to one SFI26 agreement, capped at £100,000 a year.

Mr Stocker adds: "The commitment to keep the main design of SFI stable for the rest of this Parliament is welcome. Sheep farmers plan in years, not application windows. NSA will use the review ahead of SFI 2027 to press the case for commoners and for the smallest flocks, so that the scheme reaches every sheep farmer doing the right thing by their land."

Getting ready to apply

Before starting an application, a farm business needs a Single Business Identifier (SBI) registered with the Rural Payments Agency (RPA), at least 3ha of eligible agricultural land, up-to-date digital maps, current contact details and the correct permissions in the Rural Payments service.

The most common problem in Window 1 was a mismatch between the land use declared for a parcel and the land cover shown on the digital map. The RPA has published a short video explaining how to fix this, alongside a step-by-step guide to the online application. The AHDB SFI cost benefit tool will show the income and net return from any combination of actions before an application is submitted.

Anyone who has difficulty applying online can call the RPA on 03000 200301, Monday to Friday, 8.30am to 5pm.

More information at www.gov.uk/government/publications/sustainable-farming-incentive-2026-sfi26