Defra has confirmed a major reduction in delinked Basic Payment Scheme (BPS) support for farmers in 2026 — a move expected to have significant financial implications for thousands of businesses.
In 2025, delinked payments amounted to £330m, with a cap of £7,300 per business — but in 2026, that pot will shrink dramatically to just £20m, with payments capped at a mere £600 per farm.
The news adds to growing pressure on the rural economy as many farmers continue to navigate squeezed margins, policy transition and rising input costs.
The Country Land and Business Association (CLA) has voiced concern at Defra's announcement, warning it could have a severe impact on farm profitability.
CLA President Victoria Vyvyan said: “In the context of last week's spending review the sharp fall in BPS payments was expected but is nonetheless unwelcome.
"It will hit especially hard those whose profit margins are now cut to the bone.”
She added that while the government’s Sustainable Farming Incentive (SFI) 2026 scheme may offer some hope, its details remain uncertain.
“While there might be a consolation that the new SFI 2026 scheme could be ready for applications in spring 2026, there is as yet no clarity on what that will look like and who will have access to it,” she said.
The rural business organisation also expressed concern over the reduced funding for productivity investment over the next three years.
Ms Vyvyan said: “The reduction in productivity investment over the next three years will also risk dampening investment, at a time when businesses need to look at new technology and equipment to drive efficiencies and improve environmental sustainability."
