More than half of applicants were seeking a Capital Grants agreement for the first time
Demand for farm environmental funding has exhausted Defra’s £225 million Capital Grants budget after around 17,000 applications were submitted across England.
More than half came from first-time applicants, with approximately 9,500 farmers and land managers seeking a Capital Grants agreement for the first time.
The 2026 budget was 50% larger than the previous year’s allocation, while one-third of applications came from farms covering less than 50 hectares.
Defra confirmed in its online blog: “The Capital Grants 2026 offer is now closed as the budget has been allocated.”
Applications are still being assessed, meaning the closure does not indicate that every applicant has secured funding.
The Rural Payments Agency has begun issuing agreements, with the high volume of applications meaning offers are expected to continue throughout the remainder of 2026.
Capital Grants support practical improvements covering areas including water quality, biodiversity, habitat management, climate resilience and farm boundaries.
Early figures show sheep netting was by far the most popular of the 80 items available through this year’s scheme.
The FG2 Sheep Netting option appeared in more than 11,000 submitted applications, representing approximately 20,000km of fencing.
The measure can be used to restrict livestock access to sensitive habitats and watercourses, while supporting longer-term habitat management.
Hedgerow planting was another popular choice, appearing in around 5,000 applications.
Those applications represented approximately 2,500km of new hedgerows across England.
Wooden field gates were included in more than 4,500 applications, while around 2,500 applications included funding for hedgerow laying.
The latter represented approximately 1,300km of existing hedgerows earmarked for restoration.
Defra said the figures remain preliminary and could change slightly as final checks on applications are completed.
The scale of demand follows the expansion of the Capital Grants budget to ÂŁ225m this year, compared with a smaller allocation in 2025.
Applications covered projects ranging from habitat creation and boundary restoration to water quality and resource management measures.
For farmers who have applied, attention now turns to the assessment process.
Defra has warned that requested supporting evidence should be provided quickly to avoid unnecessary delays.
All supporting information should be submitted to the Rural Payments Agency within 10 days of the application form being sent.
Applications that were started but not submitted before the scheme closed will not be processed.
Farmers who have received an offer through this or an earlier Capital Grants round but no longer intend to carry out the work are also being asked to contact the RPA.
With around 17,000 applications now in the system, agreement offers are expected to continue being issued throughout the rest of the year.