Farming and Rural Policy 2025-26
Overview
Three documents form the current government’s farming policy framework: the SFI scheme changes announced January 2026 (Oxford Farming Conference), the independent Farming Profitability Review (Batters Review, December 2025), and the Animal Welfare Strategy for England (December 2025). Together they represent a significant reconfiguration of the farming/ELM relationship following high SFI uptake costs and significant political pressure from the farming sector (inheritance tax protests, 2025).
SFI 2026 Changes (January 2026, OFC)
Scheme simplification
- Number of SFI actions reduced — “streamlining by reducing the number of actions”
- Focus shifts toward actions supporting sustainable food production (over pure environmental outcomes)
- Payment rates reviewed for actions with “particularly high” uptake that take land out of production
- Previously 10 ‘limited area’ actions; more may become limited
Application windows
| Window | Who | When |
|---|---|---|
| First | Small farms + those without existing ELM agreements | June 2026 |
| Second | All farmers | September 2026 |
Clear budgets set per window; government committed to not closing windows without warning.
Environmental goal maintained
- Doubling the number of farms providing year-round wildlife resources by December 2030 (vs. 2025 baseline) — supports EIP 2025 target
Other OFC 2026 announcements
- Inheritance Tax Relief threshold: raised £1m → £2.5 million (couples: up to £5m); ~85% of farming estates pay no IHT in 2026-27
- Farming Roadmap: 25-year strategic document in development; publication planned later 2026
- Farming and Food Partnership Board: Cross-sector; chaired by Secretary of State Emma Reynolds; initial focus on horticulture and poultry
- Farm Advice Investment: £30m over three years
- Farming in Protected Landscapes (FiPL): 3-year extension confirmed; £30m next year; 11,000+ farmers in 44 protected landscapes
- Planning consultation for farmers: Easing farm diversification and infrastructure (reservoirs, greenhouses, polytunnels, farm shops) — consultation to 11 March 2026
- Upland Farming Support: Community-led pilots; Dartmoor then Cumbria (partnership with Dr. Hilary Cottam)
Farming Profitability Review 2025 (Batters Review, December 2025)
Independent review led by Baroness Minette Batters. Examines farm profitability and sustainability in England. Context: ELM schemes transitioning farmers from Basic Payment Scheme to payments for environmental outcomes. The review’s publication alongside the SFI simplification signals government recognition that the original scheme was creating profitability pressure.
Key background:
- SFI spending was rising significantly — drove the January 2026 scheme adjustment
- Over 10 million trees planted in 2024-25 — highest in 20 years
- ELM funding rising to £2bn/year by 2028-29
Animal Welfare Strategy for England (December 2025)
Four coverage areas: farmed animals; companion animals; wild animals; international trade and standards.
Key reforms:
- Phase out colony cages for laying hens; phase out pig farrowing crates
- Promote slow-growing meat chicken breeds
- CO₂ stunning alternatives for pigs under exploration
- Snare trap ban: Wire loops that tighten around animals
- Trail hunting ban: Confirmed intention; consultation from January 2026
- Hare protection: Close season during breeding
Support: Animal Health and Welfare Pathway; increased vet payments from 22 January 2026.
Contributing actions → outcomes logic
| Action | Output | Outcome |
|---|---|---|
| SFI scheme (ELM) | Farm uptake of agri-environment actions | Wildlife habitat improvement; water quality improvement |
| Farming roadmap | 25-year strategic framework | Long-term sector confidence and sustainability |
| ELM funding to £2bn/yr | Sustained environmental payment flows | Nature recovery, biodiversity targets |
| Batters Review | Evidence-based profitability interventions | Viable farm businesses that can adopt ELM |
Tensions flagged
- sfi-simplification-water-quality — SFI simplification (Jan 2026) reduces the number of actions and reviews payment rates for high-uptake actions that take land out of production. The Agriculture Water Quality Target Delivery Plan relies on ELM (Pillar 2) contributing a 3% reduction in agricultural N/P/sediment by 2038. If fewer farmers take up water-quality-relevant actions due to the simplified scheme, this contribution is at risk. The same simplification that addresses SFI budget pressure may undermine water quality delivery.
- housing-biodiversity — Farming in Protected Landscapes and 30by30 land designations compete with planning consultation on farm diversification infrastructure (reservoirs, greenhouses, polytunnels) — the planning consultation opens space for development in protected areas
Source files
raw/farming-rural/sfi-changes-jan-2026.mdraw/farming-rural/farming-profitability-review-2025.mdraw/farming-rural/animal-welfare-strategy-2025.md