On Tuesday 22 September, the second application window for the 2026 Sustainable Farming Incentive (SFI26) opened. By 4pm the money had all been allocated. The Guardian's report compares the rush to "the scramble for Oasis tickets". Some farmers had already built the income into this year's plan.
The same risk applies to any business that puts a discretionary, first-come public scheme into its forecast as if it were guaranteed. SFI26 was redesigned to change the old system, where a quarter of all funding went to just 4% of claimants. With the money capped and spread more thinly, the order in which applications arrived decided who got paid. One farmer told the Guardian he had triple-checked everything and still lost out because the system failed before he could complete a form. If part of your forecast depends on a first-come scheme, model it as uncertain income.
What happened
SFI is the payment scheme that replaced the EU's Basic Payment Scheme after Brexit, paying English farmers for environmental work — soil health, hedgerows, water quality — rather than simply for farming or owning land. SFI26's second application window, Window 2, opened on the morning of Tuesday 22 September 2026. By 4pm the same day the available funding had been fully allocated. Reporting suggests up to 10,000 farmers whose existing funding agreements are due to expire in March 2027 either could not or chose not to apply before the window closed.
Two accounts in the Guardian's report describe technical failures during the window. Cambridgeshire farmer Peter Hatley, who runs a 240-hectare family farm, hit repeated error messages when he tried to apply; by the time the Rural Payments Agency's helpline had acknowledged the fault, the money had already gone. Another farmer, Mat Cole, submitted his application at 3:50pm — ten minutes before the window closed — and was still met with an error message rather than a confirmation.
The farming minister, Stephen Morgan, defended the scheme's overall scale in response: "Farmers will receive almost a third of a billion pounds each year for three years under new SFI26 agreements. That's nearly a billion pounds invested in resilient farming." He also explained the design: SFI26 now caps every individual application at £100,000, specifically because, in his words, "previously a quarter of funding headed to just 4% of farms making claims." The cap spreads a fixed pot across more, smaller claims.
The National Farmers' Union's vice-president, Robyn Munt, summed up the practical stakes: "For food-producing businesses already questioning whether they can survive the year ahead, this clarity is critical." Martin Lines, chief executive of the Nature Friendly Farming Network, said the six-hour exhaustion showed the "desperation" many farmers are feeling after three difficult harvests in a row — extreme rain in 2024, drought-depressed yields in 2025, and unseasonal heat this September.
Grants and subsidies in any business forecast
The same risk applies outside farming. Any discretionary public scheme with a fixed pot and no per-applicant guarantee — a grant, a capped subsidy, a sector-specific fund — may or may not pay out, and the advertised closing date is not necessarily when the money runs out. Apply, but do not spend the money until it has been awarded.
Worked example: what a missed award does to a farm's cash flow
Illustrative figures for a 220-hectare mixed arable and livestock farm that had built an expected SFI26 payment into this year's forecast — not a real business, and not Peter Hatley's or Mat Cole's actual farm, but a realistic shape for a family-run operation of that size.
| Illustrative 220-hectare mixed farm, one year | Amount |
|---|---|
| Farm turnover before any environmental payment | £340,000 |
| Typical net margin on that turnover (6%) | £20,400 |
| SFI26 payment built into this year's forecast (illustrative) | £42,000 |
| Total margin the forecast assumed | £62,400 |
| Actual margin if the SFI26 award is not secured | £20,400 |
On the same turnover, the margin falls from 18% to 6%. In practice that shows up as a strained overdraft, a delayed capital purchase or a supplier payment pushed back a month. Two-thirds of the profit the farm was counting on this year had been applied for but never confirmed. A cash flow forecast built with that £42,000 shown as a separate "if secured" line, rather than folded into the baseline numbers from day one, would have shown exactly this exposure months before the window even opened.
What to do this week
If you farm and missed Window 2, rebuild this year's cash flow forecast on the assumption that the SFI26 income will not arrive, then add any later award to the forecast only once it is confirmed. Read the Guardian's full report and Defra's own SFI26 scheme information page for the current position, and register for Rural Payments Agency update emails so you know a future window's opening time in advance.
If any part of your business, in any sector, has a discretionary grant, subsidy or capped fund sitting in this year's numbers, pull it out of the baseline forecast and run it as a separate "if confirmed" line instead. Our earlier piece on Northern Ireland's farm profits and the tax bill that follows a good year covers a related cash flow problem: the tax bill that arrives months after a good year.
What is still uncertain, and when we'll know
Neither a date nor a design has been confirmed for SFI27. The farming minister has said the department is "exploring alternatives to a first-come, first-served application process" after listening to the concerns raised this week, but nothing published so far commits to a specific mechanism, whether that means a lottery, a longer window, regional allocation or something else entirely. The NFU is pushing for a firm 2027 commitment specifically because up to 10,000 farmers have agreements expiring in March 2027 with, currently, no confirmed route to renew the funding behind them. Until Defra publishes that detail, plan on the basis that this window has closed and the next one is unknown.
Our Budget and cash flow forecast service builds forecasts that show grant income separately until it is confirmed, and our Management Accounts service shows how a scenario like this one affects your own numbers month by month. If part of this year's plan depends on money that has not been paid yet, talk to us.