Emma Reynolds is expected to say an application window for the Sustainable Farming Incentive will be opened to smaller and new farms first

Smaller farms will be prioritised for nature funding, the environment secretary is to announce, in a shake-up of post-EU nature subsidies.

Emma Reynolds is expected to tell the Oxford Farming Conference on Thursday that in June an application window for the Sustainable Farming Incentive (SFI) will be opened solely for smaller farms and new entrants to the scheme, with larger farms only allowed to apply from September.

The SFI is part of a package of payments that replaced the EU’s common agricultural policy (CAP) and paid land managers for the amount of land in their care, with the aim of paying farmers to look after nature, soil and other public goods, rather than simply for farming and owning land. The CAP payments and their successors have often been what has kept farms profitable during inflationary pressures and extreme weather events such as floods and droughts.

The money for the SFI is limited, meaning that when enough applications for it come in, the scheme is closed. Farmers were outraged when the scheme was abruptly shut in March last year and it later emerged that 3,000 farms had been wrongly blocked from applying after the money ran out.