The 2026 Budget has naturally come to dominate headlines and will likely do so through the weekend and beyond, but the day before the Chancellor’s statement – Tuesday 27 October – saw a fascinating exchange before the House of Commons Environment, Food and Rural Affairs Committee about the fiasco that was last month’s six-hour Sustainable Farming Incentive (SFI) application window.
Appearing before the Committee were the Farming Minister, Stephen Morgan MP, and his official Mike Rowe, the Farming Director at Defra. The meeting ranged widely but after what Chairman Alistair Carmichael MP (Orkney and Shetland, LD) described as “the starter” and “the fish course” it turned to “the main course”, where he and his colleague Sarah Dyke MP (Glastonbury and Somerton, LD) sought to hold their feet to the fire over what happened.
Ms Dyke began by asking what estimate Defra had made of the number of eligible farm businesses likely to apply compared with the available budget. Mr Rowe acknowledged that the department had more than 20,000 agreements due to expire, although changes to the scheme meant it could not be certain how many of those farmers would seek to enter SFI rather than other environmental land management schemes.
Nevertheless, Mr Rowe conceded that the department had anticipated high demand. He admitted that Defra knew the budget would be “heavily oversubscribed”, outlining various steps taken to make the money go further. The original £180 million budget was subsequently increased by £73 million, taking it to £253 million, but as he noted, even with this increase of around 40 per cent the money was always going to be insufficient to meet demand.
The scale of the shortfall was stark. Defra received 12,200 applications during that second window, while Mr Rowe estimated that upwards of 10,000 more farmers might have wanted to apply but were unable to do so. Ms Dyke also cited an EFRA Committee survey in which 60 per cent of respondents said they had been unable to get their applications in during the window. One farmer, she reported, had even left a funeral to try to submit an application in time.
Why, then, had Defra persisted with a first-come, first-served system when it knew that demand would exceed supply? Mr Rowe said that the government was committed to scrapping this approach for future rounds, and that work was already under way with the NFU and other stakeholders to design the scheme for next year. He acknowledged the “heartbreaking stories” and the stress the process had caused farmers.
However, the Committee was keen to press the department on why it had not acted sooner. The Minister defended the decision to proceed, pointing to the additional funding secured and the government’s desire to provide consistency for farmers. Mr Carmichael challenged this reasoning, asking whether consistency was really more important than correcting a scheme that plainly was not working. Ms Dyke argued that farmers wanted to know that funding would actually be available when they applied, and that delaying the window would have been preferable to the damage caused by its abrupt closure.
Asked directly whether the budget needed to increase, Mr Rowe replied that he would always welcome more funding, but that Defra had to work within the Treasury’s funding settlement. The department, he said, was committed to spending £11.8 billion over the lifetime of the Parliament, with an annual farming budget of £2.3 billion.
The exchange is particularly concerning in light of Wednesday’s Budget announcement that Defra’s resource budget will fall from £4.8 billion to £4.7 billion by 2027-28. At a time when the government’s own farming minister and officials have acknowledged that demand for SFI funding substantially exceeds the money available, a reduction in Defra’s resource budget is hardly an encouraging signal.
For the Countryside Alliance, the priority must be pressing the government to adopt a properly funded, reliable and accessible system of agricultural support. Farmers need the confidence to plan ahead, invest in their businesses and deliver environmental improvements without having to compete for a pot of money the government already knows is too small. By reducing Defra’s resource funding, the Budget has made that task more difficult still.