Background to the report

The Department for Environment, Food & Rural Affairs (Defra) is developing the Future Farming and Countryside Programme as a “once-in-a-generation opportunity to reform agriculture”. It will consist of schemes targeted at enhancing the environment, protecting the countryside, improving the productivity of the farming sector and improving animal health and welfare.

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Central to Defra’s proposals is the Environmental Land Management scheme (ELM), the primary mechanism for distributing the funding previously paid under CAP. Instead of CAP direct payments, ELM will pay farmers for undertaking actions to improve the environment. It has three components, each of which will be launched in full in 2024:

  • The Sustainable Farming Incentive (SFI) will be open to all farmers and will pay them for actions to manage their land in an environmentally sustainable way.
  • Local Nature Recovery will pay for more complex actions that deliver benefits at a local level and aims to encourage collaboration between farmers.
  • Landscape Recovery will support large-scale projects to deliver landscape and ecosystem recovery through long-term land-use change projects such as large‑scale tree planting and peatland restoration.

Before launching ELM in full, Defra is piloting its three components, starting with an initial cohort of farmers from October 2021. In March 2021, Defra invited farmers to express interest in participating in the pilot. In addition, Defra intends to launch some core elements of SFI at scale in mid-2022.

Scope of the report

This report examines three aspects of ELM:

  • the strategic management of ELM (Part One);
  • delivery of SFI2022 (Part Two); and
  • delivering the long-term benefits of the scheme (Part Three).

The report draws on the lessons learnt from our examination of major programmes across government, which we brought together Lessons learned from Major Programmes (November 2020).

Report conclusions

Defra and its delivery partners have worked hard in challenging circumstances to design ELM within the planned timescales. However, important elements are not yet in place, creating risks to environmental outcomes and value for money. ELM is not yet underpinned by a strong set of objectives and Defra’s planning is too short‑term in its focus. Defra also has considerable work to do to ensure ELM is delivered in a cost-effective way including developing its approach to controlling fraud and error and to delivering cost savings.

Achieving the environmental outcomes from ELM depends on high levels of participation. Defra has improved its engagement with farmers, but it still has a lot to do to regain their trust. The late introduction of SFI2022 created additional pressures for Defra and its delivery partners and, to help manage these, Defra has since reduced its scope. Nevertheless, important risks remain and a successful launch of SFI2022 to tens of thousands of farmers will be critical to the ultimate delivery of the intended environmental outcomes.

"The success of the Environmental Land Management scheme depends on securing participation from farmers. Defra has not yet set detailed objectives for the scheme and has been slow to provide information on what farmers can expect from it. Defra must now develop detailed plans for the scheme’s delivery if it is to achieve its intended environmental goals.”

Gareth Davies, head of the NAO


Publication details

Press release

View press release (15 Sep 2021)

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