Thousands of farmers will benefit from £150 million in new funding as the government opens a new round of its flagship Capital Grants offer, supporting sustainable food production and environmental improvement.
The offer funds a wide range of on-farm projects – from tree planting and flood prevention to improved slurry storage and water filtration – helping farmers boost profitability while protecting the environment.
Last year alone, Capital Grants helped plant over 4,000 miles of hedgerows and upgrade slurry systems to keep England’s rivers clean – real, tangible improvements for farming and the environment.
Environment Secretary Steve Reed said, “This major investment will give [farmers] the tools to cut pollution, restore nature, and grow their businesses. It forms part of the record £11.8 billion we’ve committed to sustainable farming during this Parliament – boosting food security, supporting rural growth, and protecting the environment.”
Farmers and land managers are now able to apply for a total of 78 items, ranging from supporting natural flood management projects to improving water quality on farms under this new round of the Capital Grants offer. Four new items have been added including assessing woodland condition, creating wildfire management plans, repairing drystone walls and hosting educational visits.
Focus on ‘biggest impact’
Martin Lines, Chief Executive of the Nature Friendly Farming Network, welcomed the investment from government. He said, “This is a welcome investment in nature-friendly farming as the sector faces difficult times. It is now essential that this funding is spent on actions that will have the biggest positive impact on the environment. Capping the amount farmers can apply for should ensure that the benefits of these grants reach as many farmers as possible.
“Farmers are confronting the existential threat that the climate crisis poses to their businesses. Nature-friendly farming, rolled out at scale, is one of the most effective solutions we have to secure a sustainable future. These capital grants are a step in the right direction, but the Government must commit to more ambitious levels of investment to secure the future of farming, ensure nature can thrive and safeguard our food production.”
Agroforestry ‘back on the table’
Soil Association Head of Farming Policy, Gareth Morgan, said that farmers needed the support to deliver the transition to regenerative and agroecological systems. He said, “Farmers need the support of both the government and the British public to make the changes necessary to transform the UK farming system to a profitable one that allows nature to thrive. So we are delighted to see capital grants reinstated for educational visits on farms. We know from the farms and Food for Life schools we work with that when people better understand the realities of farming and the beauty of UK wildlife, they want to support nature-friendly farmers. Reconnecting people with where their food comes from is a vital piece of the sustainability puzzle.
“The renewal of funding for capital grants is also an encouraging sign that the government is committed to reopening an improved Sustainable Farming Incentive scheme. This news should give farmers a much needed boost in confidence that the government is still backing the nature-friendly farming plans so many farmers were making before the SFI closed. It also puts tree planting and hedgerow restoration back on the table after support for agroforestry was paused, which is a great result for farm resilience and nature. Defra must next ensure the SFI is revamped and reopened swiftly, and that both the SFI and capital grants are used to spark a true transformation to agroecological and organic practices across entire farms all around all around the country.”
Changes are also being introduced to ensure that more farm businesses can access these grants – making it fairer for farmers by setting funding limits that maximise the number of farms benefiting, while enabling Defra to manage budgets more effectively.
This includes funding limits to four of the six groups of capital items in this Capital Grants offer. An application can include items from each of the six groups. The funding limit for four of the groups is – £25,000 maximum for each of the following three groups: water quality, air quality, and natural flood management – and £35,000 maximum for the group covering boundaries, trees, and orchards.
Defra says it will also listen to feedback from farmers and use it to improve the offer ahead of the next round, which is planned for 2026.