Farmers may turn their backs on environmental work for more intensive food production after the government suddenly closed a green funding scheme, the National Farmers’ Union (NFU) has warned.

The Sustainable Farming Incentive (SFI), which pays farmers in England to manage land to protect soil, restore hedgerows and boost nature recovery, was a key part of the post-Brexit payment scheme that replaced EU subsidies.

The government said SFI had been a success, with 37,000 funding agreements agreed, but it would not accept any new applications. No replacement has been announced.

Tom Bradshaw, NFU president, said that it was “another shattering blow to English farms”.

Mr Bradshaw said the sudden closure would force farmers to decide “whether to turn their backs on environmental work and just farm as hard as they can to survive”.

Organic arable farmer Anna Biesty, who has a 300-hectare farm on the north Norfolk coast, said she was planning to apply for SFI funding and its closure means she now faces a £140,000 shortfall in her future income.

She told BBC News she is now “angry, frustrated and apprehensive about the future”.

“You spend time making plans based on the best information you have but then that plan I made is now pointless. It’s a waste of time and that must be multiplied all around the country, whether it’s farmers or nature charities who are managing land and using similar schemes.

“It just feels like we are being punched at from every angle possible,” she explained.

The Department for Environment, Food and Rural Affairs (Defra) announced the closure of SFI, which was launched in 2022, with little warning.

It said that in total, more than 50,000 farm businesses – covering half of all farmed land – were now benefiting from wider environmental land management schemes (Elms).

The 37,000 agreements signed for SFI funding had meant all the scheme’s budget had been allocated and no more new applications could be accepted.

In total, under the SFI scheme, £1.05bn has been paid out or is contractually committed to farmers in current agreements or applications for funding since 2024.

SFI is the largest part of Elms, which is the system of farm payments set up to replace EU subsidies with the idea that “public goods”, like restoring and creating wildlife habitats, would be delivered by farmers in return for public money.

The government said it was still committed to paying £5bn over two years for such sustainable farming and nature recovery work.

It added that a “new and improved” SFI, which will have a capped budget, will be set up but its details will not be announced until later in the year.

Daniel Zeichner, minister for food security and rural affairs, said: “This government is proud to have set the biggest budget for sustainable food produce in history.

“More farmers are now in schemes and more money is being spent through them than ever before. That is true today and will remain true tomorrow.”

But Mr Bradshaw said the closure of the current SFI scheme had “slammed shut” the door for funding for thousands of farmers.

He said the closure was “delivered yet again with no warning, no understanding of the industry and a complete lack of compassion or care”.

Victoria Vyvyan, the president of the Country Land and Business Association (CLA), which represents thousands of rural landowners, said that closing the scheme was the “most cruel” betrayal.

She added that the decision “actively harms nature. It actively harms the environment. And, with war once again raging in Europe, to actively harm our food production is reckless beyond belief”.

Martin Lines, chief executive of the Nature Friendly Farming Network (NFFN), said the gap before a new SFI scheme is in place would leave some farmers “in a really difficult financial position”.

“This has left many farmers feeling frustrated and let down, with no clear opportunity to be rewarded for delivering public goods in the near future,” he said.