TFA Chief Executive, George Dunn, reacts to latest DEFRA SFI announcement:

DEFRA's decision to pull up the drawbridge to cut off access to new applicants under the Sustainable Farming Incentive (SFI) will lead to many in the farming community feeling betrayed, particularly those who have not yet felt that they have had a fair crack of the whip. New entrants, tenant farmers whose agreements have thus far prevented participation and those with common grazing rights have all faced hurdles to accessing the scheme and will now feel that their efforts to do so will have been for nothing.

At a basic level, DEFRA's decision displays extremely poor expectation management. The narrative since Brexit has been that the Government would, over time, move away from a scheme dominated by direct payments towards a broad-based public payments for public goods arrangement where farmers would be directly rewarded for the biodiversity, landscape and access they were delivering. Indeed, in setting out its stall, DEFRA said that it anticipated having 70% of farmers and 70% of farmland in SFI. However, with around 37,000 farmers declared by DEFRA to be in the scheme covering 50% of farmland, it has fallen a long way short of its targets.

It's the immediacy of the decision that will hurt so much. There will have been many farmers sitting down with their consultants this week going through cash flows, budgets and scheme options ready to push the button on an application only now to find their work has been fruitless. What are those farmers now to do in the face of no available funding particularly those who have provided huge environmental benefits as participants in legacy schemes which they have come out of to join SFI?  Do they max out on production, or do they simply sit and wait for the scheme to reopen?  This is no way for businesses to be run and it will tip many over the edge.

Nevertheless, it was always going to be the case once no longer under the Governance of the European Union in respect of our farming schemes that British farmers would be more vulnerable to changes in domestic priorities.  With DEFRA Minister, Daniel Zeichner honestly expressing the reality that the farming industry does not rank highly on the Government's pecking order, we shouldn't be too surprised that we face such precipitative action particularly in a world where the government is facing issues over welfare spending, defence spending and heavy borrowing costs. It was for all these reasons that the Tenant Farmers Association (TFA) had been advising its members, where they could, to join schemes early.  Entering into a three-year contract gives three-year security of payments even if budgets get slashed or priorities change. However, this is no answer to those who are still attempting to find their way into the schemes through no fault of their own.

Another level of mismanagement has been the open invitation to SFI for landowners who have displaced tenant farmers and contract farmers from farming their land. Huge swathes of land have been entered into schemes without limit. Whilst some of the more lucrative and easier to achieve SFI options have been limited more recently, the damage had already been done before those limits were imposed.

Of course, if it is simply the case that the money has run out and there is no new money available, there is very little we can do. DEFRA has said that it faced a surge in scheme applications in recent weeks. Nevertheless, there is a need for DEFRA to be upfront about the figures. Out of the £2.4 billion of budget allocated for the full panoply of schemes under the Agricultural Transition Plan (ATP) we need to know how much has been allocated to each element including SFI, legacy and new stewardship schemes, Landscape Recovery, productivity schemes and capital grants. Against those budget headings it should be relatively straightforward for DEFRA to provide figures for actual committed expenditure against each of those headings. At least then we can see the size of the problem we face. That could at least provide the opportunity for looking at rejigging spending priorities under the ATP. For example, the TFA has always been sceptical of the benefit of public money being devoted to Landscape Recovery schemes believing that this was an area where the Government should be encouraging more private finance initiatives which would avoid the trap of falling into creating vanity schemes which delivered little. Given the apparent success of SFI which, with a few tweaks around participation is clearly delivering substantial benefit across a broad sweep of the country, shifting more resource into SFI could be the right approach at this stage.

DEFRA must now sit down with the industry to discuss how we get ourselves out of this mess so that SFI can reopen again without delay. In a meeting between the TFA and Minister Zeichner late on Tuesday 11 March, his expectation was that the new scheme could reopen "mid to end" 2025. However, the official announcement from DEFRA talks about SFI coming back in 2026. That is far too far into the future, with the new financial year just a few weeks away and with £2.5 billion committed within the financial year.  We need a swifter approach to this.

The bigger failure we must also address for the long term is that the returns to primary producers from the marketplace do not provide a sustainable return for the risk, investment and effort employed by farmers and growers delivering great products alongside wider environmental services. The regulation of the food supply chain continues to be disjointed and piecemeal. We need to completely reassess both retail and food service supply chains to create a greater degree of fairness and a more equitable sharing of risk and reward throughout the food chain. In that way, we will create sustainable farm businesses delivering wider environmental outputs with less need to depend on public funding. That might be considered an unachievable goal and to that end, this is why there has been a reach for public payments to make up the shortfall, but perhaps the old order of things now needs to change, and change fast.