Rural Grants Update March 2026

Published: 03/03/2026 By Phoebe Wreford-Glanvill

Following last Tuesday's announcement from DEFRA Secretary Emma Reynolds at the NFU Conference in Birmingham, Agricultural Consultant Phoebe Wreford-Glanvill provides a clear summary of what's been released.

There was a lot of information announced, so there's quite a bit to digest. The key points can be broken down into three main areas:

• SFI26
• The Farming Equipment and Technology Fund (FETF)
• Capital Grants

SFI - What's Changing?
The new Sustainable Farming Incentive offer for 2026 has been streamlined. There will now be 71 actions, reduced from the previous 102. Some actions have been removed, and others adjusted.

Key structural changes:

• There will be an annual agreement cap of £100,000
• Each farm business can only have one SFI26 agreement

Application Windows
There will be two application windows:

1. June
   • Open for around two months
   • Aimed at smaller farms between 3-50 hectares, or those without an existing agreement
2. September
   • Open to all other farms

Important Scheme Changes

• Rotational actions - The area and value cannot be increased beyond what was included in Year One. Planning from the outset will be crucial.
• Enhanced Winter Stubble has now been added to the 25% area limit cap.
• SFI Management Payments are no longer available.
• Any actions that previously had a five-year duration will now move to three-year agreements.

So, overall, there will be shorter agreements, tighter caps, and more structured entry windows.

Payment Rate Changes (SFI26 Only)
These rate changes are not retroactive. They apply only to new SFI26 agreements.

• Rate Increases - Increase in payments for some moorland actions, namely 3 livestock grazing rates and 2 shepherding livestock rates.  
  • UPL1: Moderate livestock grazing on moorland – £35/ha (increased from £20/ha)
  • UPL2: Low livestock grazing on moorland – £89/ha (increased from £53/ha)
  • UPL3: Limited livestock grazing on moorland – £111/ha (increased from £66/ha)
  • UPL8: Shepherding livestock on moorland (remove stock for at least 4 months) – £74/ha (increased from £43/ha)
  • UPL10: Shepherding livestock on moorland (remove stock for at least 8 months) – £102/ha (increased from £48/ha)

We will apply the uplift to existing SFI agreements and SFI26 agreements. This is to ensure upland farmers are properly compensated given recent changes in livestock prices.

• Rate Reductions -Reduced payment rates for:
  • CSAM3: Herbal leys from £382/ha to £224/ha
  • CAHL2: Winter bird food from £853/ha to £648/ha
  • CNUM3: Legume fallow from £593/ha to £532/ha

Farming Equipment and Technology Fund (FETF)
The FETF opens on 17th March, and guidance is now available via GOV.UK. Farmers can apply for grants ranging from £1,000 to £25,000 per theme:

• £20 million for Farm Productivity
• £20 million for Animal Health and Welfare
• £10 million for Slurry Management

This is competitive funding, so preparation and early applications will be key. The application window closes on 28th April.

Capital Grants 2026
Capital Grants will reopen in July 2026.

The total funding pot is increasing significantly - from £150 million last year to £225 million in 2026.

We're still waiting on further details, but this uplift shows continued investment in fencing, water management, environmental infrastructure and other capital works.

In Summary
There's a lot to take in from this announcement, so we would strongly encourage early planning, particularly with agreement caps and restricted application windows now in place.

Overall, 2026 is shaping up to be a year of tighter controls, clearer funding caps, and more targeted environmental delivery.

As more detail is released, we will provide further updates. Please get in touch with Phoebe on 01305 236237 or our rural grants experts in your nearest office if you would like to discuss how this may affect your farm business.

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