In our end of year survey, fieldmargin farmers told us that increasing farm profitability, reducing input costs and increasing farm sustainability were the top priorities for their farm heading into 2024. In the wake of a very challenging spring where wet weather has put many farms behind or wondering if they will even get a crop in the ground, the need to find new revenue streams is more pressing than ever.
In our recent webinar we welcomed speakers from The CLA, Agreena and Sentry Farming to share the latest updates on the English Sustainable Farming Incentive (SFI), how carbon farming can provide an additional revenue to stack with government schemes and applied examples on how SFI actions has affected Sentry farm income.
A key takeaway from the session was that for both carbon farming and the SFI eligible farmers should not delay in getting the ball rolling and understanding the potential income for their farm.
SFI updates
Cameron Hughes provided insightful updates to the government’s SFI and outlined what we can expect to see from the scheme later on in the year, and into the future.
Since the launch of the scheme, there have been a few changes, with more set to come around summertime. See Cameron’s round up of updates below:
- As of 26th March 2024, six land conversion actions have been capped to 25% of your eligible holding area. These actions are:
- IGL 1: Take improved grassland field corners or blocks out of management
- IGL2: Winter bird food on improved grassland
- AHL1: Pollen and nectar flower mix
- AHL2: Winter bird food on arable and horticultural land
- AHL3: Grassy field corners and blocks
- IPM2: Flower-rich grass margins, blocks, or in-field strips
- Looking into the 2024 update & beyond:
- From August 2024 you will no longer be required to be BPS eligible to enter into an SFI agreement, making it easier for tenant farmers to access the scheme.
- Five year agreements to become an option when merged with Countryside Stewardship (CS).
- 102 further actions for the 2024 scheme are to be released in May 2024. Testing of this will begin in June and applications open from July with first payments from October 2024.
- A further 12-15 options will be offered later in 2024.
- The minority of actions require endorsement.
Since the webinar, Defra have published details of the highly-anticipated 2024 offer, including options for variable rate application of nutrients (£27/ha) and no-till farming (£73/ha). A full list and details of the new options can be found here.
Making up for lost income
As well as providing a round-up of updates, Cameron also explained how SFI can help boost farm income and fill in the gap left by the phasing out of the Basic Payment Scheme (BPS) using a stacking analysis from the AHDB.
Joe Morrell of Sentry highlighted how you can start small with simple options which you already do on your farm and build up later. Through a worked example based on a 200ha conventional farm, Joe explained that by only adopting the basic actions including soil testing, nutrient management and integrated pest management plans and hedgerow actions, you could receive £6,718 per year in income from the scheme. By adopting regenerative practices and opting for some of the land conversion actions, this income rocketed to £60,188 per year, yielding a net income of £48,868.
The Carbon Market and Carbon Credits
For those transitioning away from a ploughing-based system to a regenerative approach, trading the carbon sequestered as a result of this change could also help bolster farm businesses. Thomas Gent, regenerative farmer and UK Market Lead for Agreena, explained that you should think of your farm carbon balance as an asset which you should at least get valued, even if you don’t choose to sell.
“By not trading carbon, it’s like growing a crop of wheat and then just not harvesting it“
– Thomas Gent
Carbon is traded privately and the income is stackable with schemes such as SFI and Countryside Stewardship. A carbon credit can be worth £30-60 on the carbon market.
Worked example: 250ha farm averaging 1.4 carbon credits/ha
Low credit value (£30 per credit) generates £10,500 worth of carbon credits per year
High credit value (£60 per credit) generates £21,000 worth of carbon credits per year
With Agreena there are no up-front fees, once you have generated your credits you can choose to hold them, sell them yourself or let Agreena sell them for you.
Getting paid for what you’re already doing
If you are already using regenerative techniques, then you have already made a start to carbon farming. In order to get paid for this, you need to start recording and verifying your farming practices – you cannot quantify the amount of carbon without the records to show what field work has been done on each field.
As well as making a start to carbon farming, you can also get paid for a whole regenerative farming practices under the SFI scheme – such as no use of insecticides, adding field margins and companion and cover cropping. Details of the 2024 offer can be found on the Defra website, including the payment rate for all SFI options.
Already got your SFI application approved? Take a look at our helpful blog which explains how fieldmargin can help you with the record-keeping of each action.