The Sustainable Farming Incentive (SFI) in its current form will fall far short of offsetting expected direct payment losses, according to the Agriculture and Horticulture Development Board (AHDB).

AHDB’s latest Horizon report examines in detail the pros and cons of taking part in the SFI at farm level.

The analysis shows that, at the current payment rates, most SFI standards will only provide a small financial benefit to many farmers when the costs of undertaken SFI actions are included.

However, those farmers who are already undertaking some of the actions required and don’t have to take land out of production will benefit the most.

SFI, which will be rolled out on a wider scale this summer, is intended to financially reward actions beneficial to the environment, against a backdrop of helping the industry achieve ambitious environmental targets coupled with reductions in direct payments in England.

Amandeep Kaur Purewal, AHDB senior analyst, said:

“It is vital that AHDB’s role as a provider of impartial evidence is recognised by policy makers to help shape and inform the new schemes as they progress.

"The government needs to ensure that all these schemes are attractive and appropriate for farmers across the board. Only then can the industry’s challenging environmental targets be reached.”

The report’s authors emphasised there was no ‘one size fits all’ approach and farmers should assess the costs and benefits of participating in SFI as part of a wider review of their individual farm business.

Purewal added:

“Farmers would benefit from treating environmental outputs like any other agricultural output within their businesses.

"If they became a top performer in terms of the efficiency with which they can produce these public goods, they will benefit the most from the current and future schemes.

“It is important that farmers consider the SFI within a wider review of their business in order to ensure they mitigate the loss of direct payments and remain profitable throughout the agricultural transition period and beyond.”