East Anglia's farmers are being urged to explore the financial benefits of "stacking" their environmental actions to earn government payments.

The Sustainable Farming Incentive (SFI) is part of a new system of green payments being launched while EU subsidies, paid via the the Basic Payment Scheme (BPS), are phased out after Brexit.

There was limited uptake when the SFI launched in 2022, but farm agents said the 2023 offer, which is now open for applications, promises a "workable" package for farmers looking for alternative income streams to fill the gap left by BPS.

There are now 23 paid actions across nine SFI "standards", with up to 30 more expected to be added by the end of 2024.

The three-year scheme includes paid options ranging from over-winter green cover and insecticide-free crops to wild bird seed plots, buffer strips and hedgerow management.

Rural agency Brown&Co has analysed three potential SFI approaches on a hypothetical 200ha farm, comprising 180ha of combinable crops, 20ha of improved grassland and 15km of hedges with trees.

In the first scenario, "Farmer A", who crops all the arable land, makes £149 per hectare (£29,733) from SFI on top of their arable revenues, while "Farmer B", who chose the "hybrid" option of focusing on the most fertile land while generating environmental revenue from less productive areas, generates £251/ha (£50,175).

But "Farmer C", who converts all the arable fields into environmental options, generates £622/ha (£124,463) from SFI, while forgoing income from food crops.

Andrew Fundell, an agri-business consultant and partner in the Norwich office of Brown&Co, said: "Some are taking this as an opportunity to take poorer land out of production or replacing break crops such as beans out of the rotation and replacing them with a lower risk option. 

"Some limited examples are considering taking the whole farm out of production."

Mr Fundell said Brown&Co understands that currently around 5,000 SFI applications have been started and more than 1,200 offers made.

Meanwhile, analysis from the Agriculture and Horticulture Development Board (AHDB), shows that while SFI incomes will not replace BPS, the programme "can considerably boost farm business income when SFI options are stacked effectively".

It says additional annual revenue over a three-year period from SFI ranged from £7,000 to £10,000 for a 105ha dairy farm, £7,000 for a 150ha beef and sheep farm, £13,500 for a 220ha mixed farm and between £15,000 and £46,000 for a 455ha arable farm, depending on how "ambitious" the actions are.

But analysts said farmers must also consider the establishment costs and any loss of crop income.

Dr Amandeep Kaur Purewal, AHDB senior economist said: “No action in the SFI is going to be enough to mitigate the loss of direct payments.

"However, our analysis has illustrated that the right combination of actions could go a long way to make up some of the shortfall and play a role in stabilising farm incomes.

“With applications now open for SFI 2023, it’s in farmers’ interest to investigate which options work for their farm."