Defra confirms changes to agri-environment schemes in 2026
The UK government has announced significant updates
The updates relate to the governments agri‑environment funding programmes for 2026, including a streamlined Sustainable Farming Incentive (SFI), the final round of the Farming Equipment and Technology Fund (FETF) and an expanded budget for Capital Grants.
The changes were outlined across Defra communications and sector briefings during and after the NFU Conference on 24–25 February 2026.
Changes to SFI
Defra’s SFI for 2026 has undergone substantial revision, with the offer reduced from 102 actions to 71. No new actions have been added, and several low-uptake or low-value actions – most notably the SFI Management Plans – have been removed.
Key structural changes
- £100,000 annual cap per farm business
- One SFI26 agreement permitted per business
- No ability to increase area or value of rotational actions after year 1
- AHW7 enhanced overwinter stubble added to the list of actions within the 25% farm area cap
- All actions fixed at 3-year duration (no 5-year options)
- Removal of the SFI management payment
- Removal of all management plan actions (SAM1, NUM1, IPM1, MOR1 and HRW1)
Application windows
- Window 1 (June 2026): Open for 2 months, or less if funding is fully allocated. Eligibility is restricted to farms 3–50 ha and those without any current ELMS scheme (SFI 23/24, CSMT, CSHT and HLS).
- Window 2 (September 2026): Open to all farms, with no fixed end date.
Updated payment rates
Significant changes apply across several actions. Increases mainly affect moorland grazing and shepherding, while reductions are concentrated in high-uptake arable and habitat actions.
Increases apply to both new SFI26 agreements and existing SFI 23 and 24 agreements.
Decreases apply only to new SFI26 agreements. Current SFI 23 and 24 rates remain unchanged.
Rate changes
| Action | Old rate (£/ha) | New rate in SFI26 (£/ha) | Difference (£/ha) |
|---|---|---|---|
| UPL1: Moderate livestock grazing on moorland | 20 | 35 | +15 |
| UPL2: Low livestock grazing on moorland | 53 | 89 | +36 |
| UPL3: Limited livestock grazing on moorland | 66 | 111 | +45 |
| UPL8: Shepherding livestock on moorland (remove stock for at least 4 months) | 43 | 74 | +31 |
| UPL10: Shepherding livestock on moorland (remove stock for at least 8 months) | 48 | 102 | +54 |
| CSAM3: Herbal leys | 382 | 224 | -158 |
| CAHL2: Winter bird food | 853 | 648 | -205 |
| CNUM3: Legume fallow | 593 | 532 | -61 |
FETF 2026: Final round in current gormat
The next round of the FETF will run from 17 March to 28 April 2026, marking the final year of the scheme in its current structure.
Funding breakdown per theme
- £20 million – Farm productivity (4 items added)
- £20 million – Animal health & welfare (13 items removed, 4 added)
- £10 million – Slurry management (no changes)
Grant rules
- Funding per theme: £1000–£25,000
- Maximum per farm: £75,000
- Applicants may apply once per theme
Administrative changes
- Removal of the vet advice and new entrant score uplift
- Removal of the option for a separate correspondence address—details must match the Rural Payments service
- Rural Payments Agency will allocate funding after reviewing all applications
Capital Grants: Funding increased for 2026
A refreshed Capital Grants round will become available in July 2026, with funding increasing from £150 million to £225 million.
Defra plans to publish updates when 25%, 50% and 75% of the allocation is committed, signalling that funds may move quickly.
Farmers should ensure mapping and Catchment Sensitive Farming (CSF) approvals are up to date in advance of the application window. Further details are expected over the coming weeks.
Further details
For further details, you can visit or contact your local ADAS adviser through the contact form.
Find out more