Defra unveils £225m farm grants as demand set to outstrip supply

Farmers face a race for funding this summer as £225 million in Capital Grants opens amid expectations the scheme will be oversubscribed.

Details released by Defra on 19 March show the 2026 offer, due to launch in July, will support environmental improvements across England, including hedgerow planting, tree work and measures to improve water quality.

Full details of the scheme are still being finalised, with the complete list of eligible items set to be published in May alongside official guidance.

As in previous years, the grants will be split across six categories: boundaries, trees and orchards; water quality; air quality; natural flood management; assessments; and improvements.

Funding caps will remain in place for most groups.

Applicants will be able to apply for up to £25,000 across water quality, air quality and natural flood management, while a higher limit of £35,000 applies to boundaries, trees and orchards.

Each application can combine items from these groups, along with additional elements from the assessments or improvements categories.

Only one application per Single Business Identifier (SBI) will be allowed, continuing the approach used last year.

The scheme comes after strong uptake in 2025, and Defra has warned that competition for funding will be intense once again.

Updates will be issued as funding is allocated, with progress markers at 25%, 50% and 75%.

Applicants are being warned to prepare early, particularly when it comes to submitting supporting evidence.

Defra said there will be a “greater emphasis” on providing this information upfront, after last year saw widespread delays due to incomplete submissions.

This resulted in “additional chasing, slower decisions, and in some cases, applications being rejected”, underlining the risks of missing documentation.

Farmers who have already completed capital works under existing Countryside Stewardship agreements are urged to submit claims promptly and confirm when these are finalised.

Doing so releases land parcels from existing agreements, allowing them to be included in new applications.

Applicants must also ensure their details are up to date with the Rural Payments Agency (RPA), including business records and land mapping.

Accurate maps will be required as supporting evidence to show where works will take place or to identify features such as historic sites or woodland areas.

Financial readiness is another key requirement.

Because grants are paid after work is completed, applicants must be able to cover costs upfront and reclaim the funding later.

For applications worth more than £50,000, proof of funds will be required through a letter from a qualified accountant confirming the business has sufficient resources.

The scheme forms part of wider efforts led by Defra to support environmental land management, as farm funding continues to shift away from direct payments.

Meanwhile, Catchment Sensitive Farming (CSF) advisers have been working with farmers to prepare for the latest round.

A large number of advisory visits have already taken place, helping applicants qualify for specific items within the scheme.

However, due to high demand, new requests for visits will not be prioritised before the application window opens.

Further support is expected later in the year, and farmers are being encouraged to attend free CSF events in the meantime.

With funds limited and competition intensifying, incomplete or poorly prepared applications risk being left behind.