Defra Secretary Emma Reynolds announced reforms to the Sustainable Farming Incentive (SFI) at the 2026 Oxford Farming Conference (OFC), as the National Farmers’ Union (NFU) responded to new measures.
The Oxford Farming Conference (OFC), which runs from 7th-9th January, has welcomed delegates to three days of industry discussion and debate under the theme of “Growing Resilience”.
Secretary of State for Environment, Food and Rural Affairs Emma Reynolds delivered a speech at the 2026 conference, announcing a partnership between Government and farmers as well as reforms to the Sustainable Farming Incentive (SFI).
Speaking at the conference, Reynolds said: “Since starting this role in September, I’ve listened to farmers and stakeholders about your concerns on proposed changes to inheritance tax. You told me the threshold was too low. You told me it would hit small family farms – the very farms we want to protect.
“We have listened and we are making changes – increasing the inheritance tax threshold for Agricultural and Business Property Relief from £1 million to £2.5 million pounds. That means couples can pass on up to £5 million pounds without paying inheritance tax on their assets. That’s on top of the existing allowances such as the nil-rate band.
“Around 85% of estates claiming APR, including those also claiming BPR, will pay no more inheritance tax.”
Referencing the former NFU president Minette Batters’ Farm Profitability Review, Reynolds stated: “We are working through all of her recommendations and we will set out a more detailed response in our 25-year Farming Roadmap, built with you, later this year.
“However, we have issued our initial, high-level response. She underlined the need for Government to work in close partnership with the agriculture and food industry. I completely agree.
“So we will set up a Farming and Food Partnership Board to bring together the whole agri-food system – farmers, food processors, retailers and finance.”
The reforms to SFI will aim to “simplify the scheme, level the playing field, and provide stable, predictable delivery”.
Reynolds revealed there will be two application windows in 2026, with the first from June, prioritising smaller farms and those without an existing agreement, followed by a second round from September for wider applications.
NFU welcomes announcements but identifies “lack of detail”
NFU president Tom Bradshaw said: “It’s encouraging to see the Defra Secretary of State’s real ambition for a thriving agriculture industry, demonstrated by her announcements made today, as well as her commitment to working collaboratively with farmers and growers.
“Domestically, creating policies that support productivity and growth remain key and I am pleased to hear the Secretary of State talk about the much-needed clarity coming ahead of each payment windows for the Sustainable Farming Incentive (SFI). Farming is a long-term investment, measured in years, not months, and clarity is essential for confidence. Transparency around the farming budget is critical to this. Without transparency, farmers and growers are unable to plan for their businesses’ future.
“On a global scale, growing exports for British food abroad and ensuring imported products meet our productions standards will ensure our sector can compete on a level playing field.
“Important questions remain on the detail and delivery, from the 25-year Farming Roadmap to the roll out of the Farming Profitability Review. We want to work with Government to drive these policies forward to create confidence and profitability for farming and growing businesses and ensure 2026 sees British farming achieve all it is capable of.”
“There remains a huge lack of detail that farmers and growers urgently need and this uncertainty continues to undermine farmers’ confidence, ability to invest and do the best for their business.”
David Exwood, NFU
Responding to the Defra Secretary of State’s update on SFI, NFU deputy president David Exwood said: “It’s positive to hear Defra Secretary of State talk about much-needed plans to reform the SFI and a commitment to work collaboratively with farmers and growers, particularly in our uplands and protected landscapes.
“But there remains a huge lack of detail that farmers and growers urgently need and this uncertainty continues to undermine farmers’ confidence, ability to invest and do the best for their business.
“We recognise that the farming budget is finite and that SFI has to be spread more evenly across the industry, with a particular focus on the coming 12 months. But for farming and growing businesses to deliver the public goods the scheme originally set out to achieve, it is vital that it is accessible and relevant to all food producing businesses, no matter the size. That is why if there has to be an SFI funding cap, we support a cap per hectare for SFI agreements on farm.
“There are 27,800 farmers in agri-environment schemes whose agreements are set to expire at the end of the 2026/2027 financial year. With that deadline on the horizon, it is essential that we get a clear understanding from Defra about the SFI budget for the two application windows to allow continuity of environmental delivery that already exists of farm.”
