Looking into the box of tools that the SFI scheme supplies allows us to unpack the role it plays in regenerative farming systems: how it contributes to financial stability, how it compares to break crops, and what trade-offs it presents in terms of profitability, carbon, and biodiversity, particularly in relation to national goals like 30x30 – the UK’s target to protect 30% of land for nature by 2030.
Regenerative agriculture isn’t just about reducing inputs or changing cropping patterns, it’s about rebuilding soil health, sequestering carbon, improving biodiversity and creating resilient systems that can withstand climate and market shocks. But where does England’s Sustainable Farming Incentive (SFI) fit into this equation?
What Is SFI and Why Does It Matter for Regenerative Farmers?
Launched as one of the three components of the Environmental Land Management (ELM) schemes, the SFI is designed to pay farmers for delivering public goods, from cleaner water and improved soil to enhanced biodiversity and reduced emissions. Many of the practices it supports are already standard in regenerative systems including: herbal leys, no-till cultivation, cover cropping, reduced pesticide and fertiliser use, and integrated pest management.
This alignment means that for many regenerative farmers, SFI doesn’t ask for significant changes. It rewards existing good practice, or helps fund the transition for those just beginning to move away from conventional systems, alongside the capital grant funding schemes.
As of 2024, more than 22,000 farmers had enrolled in the scheme (according to Defra), covering over 1.6 million hectares. The wide uptake suggests the SFI is becoming a core part of how farms approach both sustainability and profitability.
SFI as a Slice of Farm Income: The Numbers
On regenerative farms, particularly mixed and arable systems, SFI can contribute a meaningful slice of net income. For instance, an average 500-hectare arable farm using a combination of no-till, rotational herbal leys, and cover crops, alongside farm-wide actions such as writing a Soil Management Plan, and an Integrated Pest Management Plan, could receive on average between £85 and £102 per hectare, depending on the chosen areas of options. That translates to roughly £42,500–£51,000 per year, representing around 15–30% of net income, depending on crop performance and market volatility.
This income becomes especially valuable during the early years of regenerative transition. In this period, yields may temporarily decline sometimes by as much as 20%, as the soil biology adjusts to reduced chemical inputs and tillage. SFI helps to bridge this gap, making the transition financially viable while the longer-term benefits of soil recovery begin to take root.
According to Defra's 2023 Farm Business Income data, in England, the average income for the 2023/24 financial year was £67,500, but with a high level of year-on-year variability driven by input costs. In contrast, regenerative farms supported by SFI tended to show more stable margins, even when commodity prices dipped, thanks to lower overheads and diversified income streams.
What Happens If You Swap SFI Options for Break Crops?
One common modelling question is: what if farmers replaced SFI-backed regenerative options like herbal leys or legume fallows with more conventional break crops such as oilseed rape or beans? On the surface, this seems financially tempting – break crops often deliver higher gross margins. But the full picture is more complex.
Gross margins for oilseed rape, for example, might exceed £600 per hectare, while beans can yield around £530 per hectare. However, when you factor in input costs, fertilisers, sprays, and multiple machinery passes the net margins can be surprisingly slim. In some cases, regenerative farming plus SFI models offer higher net profitability. Herbal leys, when supported through SFI, might return £220 per hectare after costs, compared to £160–£170 per hectare for some break crops with higher input reliance.
The carbon implications are also stark. Regenerative options like herbal leys and legume fallows can sequester between 0.5 and 1.2 tonnes of CO₂ equivalent per hectare per year (Soil Association's report on “Farming for the Future", 2018). In contrast, input-heavy break crops often result in net emissions, particularly when reliant on synthetic nitrogen. Replacing SFI-supported actions with break crops could shift a farm’s carbon balance from positive to negative, undermining long-term soil function and climate goals. However, each farming business has to judge this choice on an individual basis around the viability of their break crops, sunk capital costs into machinery, storage, handling, workloads and access to markets.
Biodiversity takes a hit too. Regenerative systems supported by SFI tend to integrate wider field margins, species-rich swards, and hedgerow corridors all of which contribute to the UK’s 30x30 nature recovery targets. A study by the Centre for Ecology & Hydrology found that herbal leys increase wild bee abundance by up to 35% compared to oilseed rape grown conventionally. However, that bee abundance is actually increased in an oilseed rape crop grown in a fully regenerative system, utilising companion cropping (CIPM3) coupled with no use of insecticides (CIPM4) and the addition of a flowering post-harvest catch or cover crop (SOH3) before the planting of a winter sown crop. Scaling back these regen elements in favour of fully conventional break crops could reduce the multi-functional value of farmland, at a time when landscape diversity is more vital than ever.
SFI + Regenerative Systems = Long-Term Resilience
SFI doesn’t replace market income, it stacks with it. Alongside crop sales, farmers can also engage in carbon markets, water quality schemes, or Countryside Stewardship options. Together, these form a more diversified and resilient income structure.
Perhaps most importantly, SFI de-risks innovation. Farmers can trial new crop rotations, reduce fertiliser dependency, and build longer-term fertility without bearing the full financial brunt alone. Data from field trials hosted by Innovative Farmers and Agricology suggests that farms supported by SFI saw, on average, 30% lower fertiliser bills, higher earthworm counts, and, in some cases, after three years, yield recovery.
In this way, SFI is acting not as a replacement for farming income but as a financial shock absorber, enabling more producers to invest in the long-term health of their land, and the systems associated with it.
The SFI isn’t a magic bullet, and was not designed to be one, but when used strategically within regenerative systems, it’s a powerful enabler. It offers transitional support, rewards ecosystem services, and opens the door to a more stable, lower-risk model of farming. At a time when climate volatility, price swings, and input costs threaten farm profitability, tools like SFI can help build the resilience that traditional high-input systems struggle to maintain.
Rather than focusing purely on gross margins or headline yields, regenerative systems supported by SFI shift the focus to net value, soil health, and long-term sustainability. And in many ways, that may be the clearest path forward, for both farms and the environment.
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