Defra’s capital grants scheme will remain closed until next year after the latest round allocated £150 million to farmers in less than a month.
The latest round opened for farmers on 3 July following the sudden closure of the grant offer last November. But it closed again on 1 August after the entire £150m budget was fully allocated to growers and livestock producers.
“The next round of funding will be available in 2026,” said a Defra update. “This uptake shows that farmers are embracing opportunities to deliver sustainable food production and restore nature.”
The department had previously warned that on 22 July that 50% of the available funding had been allocated, based on applications submitted. It updated farmers again on 29 July, saying this had increased to almost 75%.
Timely updates
NFU deputy president David Exwood said: “We recognise the capital grants scheme budget is limited and now fully allocated.
“In the past, transparency has been entirely lacking and we’ve long called for clearer communication to help farmers and growers plan. On that basis the recent timely updates from Defra have been welcome and must continue going forward. The strong uptake within the scheme again highlights farmers’ commitment to sustainability and their willingness to invest in delivering environmental benefits, despite the challenges facing the industry.”
“It’s now vital we understand how the RPA plans to deal with applications that couldn’t be processed due to outdated records. We look forward to continuing to work with Defra to shape the 2026 capital grants offer.”
Improvements
Capital grants fund environmental improvements such as planting hedgerows, managing boundaries, improving water and air quality, restoring habitats, and introducing natural flood management measures.
Defra says these improvements deliver long-term benefits, reducing pollution and making the environment more resilient. It says the grants support farmers who enhance biodiversity, protect natural resources and improve the landscape. The government says changes made to the scheme have made access to the grants fairer, so more farm businesses can get funding and Defra can more effectively manage taxpayers’ money.
It says the improved offer is another step in the government’s New Deal for Farmers to support growth and return farm businesses to profitability.