Defra publishes guidance for 2026 Capital Grants scheme

Farmers in England are being urged to prepare applications immediately for Defra’s reopened Capital Grants scheme after ministers confirmed a £225m funding pot for 2026 amid expectations demand could again outstrip supply.

The guidance for the 2026 Capital Grants offer was published this week ahead of applications opening in July, with Defra promising funding for environmental improvements including hedgerow planting, water quality projects and natural flood management.

Defra secretary Emma Reynolds announced the £225m Environmental Land Management (ELM) Capital Grants scheme for 2026 at the NFU Conference in February – 50% more funding than was available in the previous year (£150m).

See also: Farmers told prepare now for next £225m Capital Grants scheme

Writing in a blog, Sarah Blatchford, a senior policy adviser in the Future Farming team at Defra, said: “Demand for last year’s offer was very high, and we expect strong interest again this year.”

The department said the scheme had already funded more than 1,200km (746 miles) of new hedgerows and supported the renewal of more than 800 concrete yards to improve slurry and effluent management.

Applications will open in July, although no exact date has yet been confirmed.

Defra said updates would be issued once 25%, 50% and 75% of the available funding had been allocated, signalling that applicants would need to move quickly to secure support.

Ms Blatchford warned that incomplete submissions had caused major delays during the previous round.

“In 2025, many applications were incomplete, which caused delays and meant some applications were rejected,” she said. “We therefore ask applicants to provide their supporting evidence together with their application.”

NFU advice

The NFU said farmers should study the newly released guidance carefully before the window opens.

NFU vice-president Robyn Munt said the “publication of the guidance for 2026 “provides much needed clarity for those looking to invest in environmental delivery and sustainability, enabling better forward planning”.

She urged Defra to provide similar clarity “as a matter of urgency” for the 2026 Sustainable Farming Incentive (SFI) scheme, which is due to open for applications in June.

This includes SFI26 action details, how those in existing schemes ending this year could access the scheme and how the budget will be allocated across the two application windows.

The NFU also highlighted significant changes to the scheme, including the removal of agroforestry items and woodland condition assessments from the main Capital Grants offer. Those measures will instead move into Higher Tier Capital Grants later this year.

There are now 80 eligible items available, up from 78 last year, including new grants for fruit tree planting, stone gate posts and educational access accreditation.

Spending caps remain unchanged, including limits of £25,000 for water quality, air quality and natural flood management, alongside a £35,000 cap for boundaries, trees and orchards.

‘Don’t delay’

Farm business consultants also warned businesses not to delay preparations.

Kelly Farm Consulting, based in Bristol, said: “The biggest headline remains the increased funding pot, with £225m allocated to Capital Grants in 2026, up significantly from the 2025 offer.”

However, the firm cautioned: “Given how quickly funding was allocated last year, we would not recommend delaying applications unnecessarily.”