After hitting its budget ceiling, the UK’s Sustainable Farming Incentive (SFI) temporarily closed to new applicants in March 2025, although existing agreements continued to be honoured. The scheme has now been relaunched as SFI26, a streamlined, fairness‑focused reboot designed to give farmers greater stability, clarity and predictability.
For the agri-tech sector, the central question is whether SFI26 will accelerate the adoption of precision agriculture across farms. Based on the scheme’s design, funding ecosystem and industry response, the answer appears to be yes – indirectly but significantly. The new SFI strengthens financial, environmental and operational incentives that make precision agriculture more appealing, more viable and, increasingly, more essential.
A more focused, outcome‑driven scheme
The government’s 2026 reforms simplify the programme dramatically, slashing the number of actions from 102 to 71 to reduce duplication and improve usability. Defra says the intention is to support productive, profitable and resilient farm businesses while maintaining environmental delivery at the core.
This shift has clear implications for precision agriculture. SFI26 incentivises measurable, data‑rich environmental outcomes – soil health, nutrient efficiency, habitat enhancement – steering farms towards tools capable of generating robust, evidence‑backed reporting. Drone imagery, in‑ground sensors, variable‑rate equipment, targeted spray systems and automated mechanical weeders all align closely with the environmental actions rewarded by the scheme.
With planning‑based actions largely removed and delivery actions taking centre stage, accuracy, consistency and traceability matter more than ever. Precision technologies not only strengthen environmental performance, they help farmers manage risk under tighter budgets and a more prescriptive action framework.
Widening access: Structured windows for smaller farms
SFI26 also introduces two structured application windows. The first is a June window for small farms (3-50 ha) and farms not currently in an Environmental Land Management (ELM) agreement. Afterwards a September window opens for all other farms. This approach aims to opens the scheme early to smaller farms, a group historically less likely to adopt PA due to cost barriers.
Tech grants: The real acceleration engine
The SFI alone does not subsidise precision agriculture equipment, but it sits alongside powerful funding mechanisms that do.
These include the £50 million Farming Equipment and Technology Fund (FETF 2026), making funds available for precision tools, monitoring systems, robotics, and digital technologies, and Capital Grants (opening July 2026) offering Up to £225 million for fund tree planting, hedgerow restoration and improving water quality.
When paired with SFI26’s delivery‑focused incentives, these grants create a compelling business case for investing in precision agriculture. Farmers can use capital funding to adopt tools that make SFI delivery cheaper, more reliable and less administratively risky.
Constraints: Caps, costs and complexity
Despite the positive direction of travel, SFI26 is not designed explicitly to fast‑track precision agriculture. Several structural constraints remain. The £100,000 annual cap limits the flexibility of larger farms wanting to finance significant precision ag upgrades. The removal of the SFI management payment reduces upfront cashflow that some farms previously used to trial new technologies. Core barriers to adoption such as high costs, complexity and training demands persist across the sector.
‘DEFRA is steering the sector toward doing and documenting’
Speaking to AgTechNavigator, Sven Poppelman, CEO of Regeno – a UK agri-tech firm specialising in on‑farm verification – suggests the policy logic behind SFI26 is hard to argue with.
“The planning actions had high uptake but didn’t directly deliver environmental outcomes… Paying a farmer to assess a hedgerow doesn’t grow a hedge,” he says.
“What remains in SFI26 are all delivery actions… Cover crops, no‑till, precision nutrient application. And delivery actions need evidence.”
Poppelman notes that the combination of SFI26 and FETF grants creates a clear direction of travel: “DEFRA is clearly steering the sector toward doing and documenting, not planning and reporting.”
According to Poppelman, practical implications differ for farmers and advisers.
For farmers, “A 200-hectare arable farm doing cover crops, no-till, and precision nutrient application could be looking at over £45,000 a year. But every pound is tied to delivery – photos, records, geo-tagged data linked to specific parcels and specific actions.”
For advisers, the “role shifts from helping clients write plans to helping them choose the right action stack and then organise proof of delivery across a portfolio. If you’re managing 50 or 100 farms, that’s a serious operational challenge.”
Gaps and risks in the rollout
Poppelman highlights three systemic risks. First, the transition timing – with Window 1 opening in June for small farms, Window 2 in September for everyone else, and 10,000 existing agreements expiring in December – leaves a tight turnaround for farms needing to re‑plan.
Second is payment rate reductions. “Herbal leys dropping from £382 to £224 per hectare and winter bird food from £853 to £648 will hit farms that built their economics around those numbers,” Poppelman explained. “DEFRA’s rationale – that initial rates were too attractive and pulled productive land out of food production – makes sense at a policy level, but it creates a real planning gap for farms already committed to those rotations.”
Finally, is an evidence gap. Most farms currently lack the tools and capacity to gather and organise the evidence SFI26 requires at scale, Poppelman says. He warns that the scheme may under‑deliver unless evidence‑capture infrastructure – such as mobile data tools, automated verification systems and standardised reporting channels – catches up.
He adds that removing planning‑related payments does not eliminate the need for planning: “Farmers still need to know their soil nutrient status before applying variable‑rate inputs… DEFRA’s new free nutrient‑management tool is a step in the right direction.”
Similarly, removing low‑cost assessment actions like hedgerow surveys risks weakening decision‑making: “You can’t improve what you haven’t measured… Without that baseline, less‑engaged farms lose the nudge to think before they act.”
Precision agriculture becomes hard to ignore
In practice, SFI26 will not force farmers into adopting precision agriculture. But the economics, compliance obligations and environmental requirements make it increasingly difficult to meet scheme expectations without some level of precision capability.
SFI26 is not a precision agriculture subsidy, but by narrowing the scheme to delivery‑based, evidence‑heavy, data‑dependent actions, and aligning with substantial tech‑friendly grants, it creates strong structural incentives for farms to adopt precision tools.
