Some farms could be better off under the Sustainable Farming Incentive (SFI) and could justify a transition to regenerative farming, according to GSC Grays.
The rural land and property specialist has calculated that SFI payments could exceed Basic Payment Scheme (BPS) payments (£232.22/ha in 2020).
However, it said, businesses must already manage the land within a regenerative system or be prepared to make the necessary investments and changes to their farming operations to achieve this.
This will include:
- Incorporating cover crops and companion crops within arable rotations;
- Widespread use of legumes within improved grassland;
- Not applying insecticides;
- Investment in precision farming equipment;
- Adoption of a no-till system;
- Establishment of environmental buffer strips and plots.
On February 3, 2023, the Department for Environment, Food and Rural Affairs (Defra) announced six additional standards for SFI and provided an indication of payment rates for a further four standards available in the summer of 2023.
GSC Grays compiled a table to show what this means in practice, for a 200ha mixed farm comprising 100ha of arable land, 70ha of improved grassland and 30ha of unimproved grassland with an extensive application of the SFI standards.
Standard Total payment Avg. payment/unit SFI management payment £1,000 £50 Animal health and welfare review (cattle) £522 £522 Improved grassland soils (ha) – – Arable and horticultural soils (ha) £4000 £40 Improved grassland (ha) £775.60 £352.55 Low input grassland (ha) £4,530 £151 Hedgerows (m) £460 £0.23 Integrated pest management (ha) £6,925.50 £69.26 Nutrient management (ha) £10,698 £142.64 Arable and horticultural land (ha) £1,086.50 £639.12 Total SFI payment £29,997.60 Total SFI payment/ha £149.99
GSC Grays said the information and figures in the table are assuming options are maximised where possible.
Standard Total payment Avg. payment/unit Using precision farming approaches (grassland and arable) £8,500 £50 No-till and direct drilling (arable) £12,500 £25 Combined total SFI payment £50,997.60 Combined total SFI payment/ha £254.99
Also, average payment rates for some standards will vary by farm, it said, as standards combine a variety of payment rates and ambition levels, resulting in varying averages.
Regenerative farming
Jamie Charlton, GSC Grays farm business consultant, said that up until now, the payment rates released by Defra to encourage the transition to a regenerative farming model have not provided sufficient financial incentive to justify making the switch.
“We expect to see an increase in businesses questioning whether their current farming system is the most profitable and sustainable within the new support payment structure,” he said.
“We would stress that the cost of applying these transitions will vary by farm.
“Nevertheless, costs must be evaluated against the possible cost-savings achieved such as reduced consumption of fuel and fertiliser as well as the benefits of improved soil health on factors such as water retention.”
