Outlook 2026: Farm support disparities and uncertainty grows

After four years of agricultural transition under the Environmental Land Management (ELM) model, the sudden closure of the Sustainable Farming Incentive (SFI) in March 2025 has signalled a policy “reset”.

This has been driven by budget constraints and a reassessment of priorities, rather than a move to a more permanent system.

This has created plenty of uncertainty for English farmers.

See also: Planning bill set to change environmental markets for farmers

They no longer have the safety net of the Basic Payment Scheme (BPS), now set at a maximum of £600 for 2026 and 2027, says Caroline Ingamells, a senior business research consultant at Andersons.

The SFI was supposed to be the vehicle through which farmers could recoup some lost BPS money.

We are left wondering what any new scheme might look like and when it will open – it is not expected until April 2026, possibly later.

This leaves “haves”, who remain in current schemes, and “have-nots”, who are excluded.

This could lead to cashflow pressure on the have-not farmers who factored SFI payments into business planning, especially where tenders for tenancy agreements were tied to SFI participation.

At the time of writing, the only element of ELM open was the Countryside Stewardship Higher Tier, but by invitation only. There is no timetable for when it might open to wider applications.

The third element of ELM is Landscape Recovery, which funds a smaller number of long-term, large-scale projects.

There were no application rounds in 2024 and none at the time of writing in 2025.

Attracting and aligning private investment with government funding seems to be proving a challenge.

The standalone “environmental” capital grant funding for farmers in England will open during 2026, according to Defra, but it is unclear what form this might be.

Funding has also been made available under the Farming Innovation Programme for those wanting to research or develop an innovative solution in the agricultural industry or to accelerate a product to market.

The Planning and Infrastructure Bill is one of the government’s flagship pieces of legislation.

It aims to deliver on the “growth agenda” and to boost the drive to net zero through renewable infrastructure.

Farmers and landowners are very likely to feel the effects of this legislation, expected to receive Royal Assent by the end of 2025.

Scotland

How lucky we are that BPS subsidy receipts continue at existing levels, which looks set to continue into 2026, says Andersons Northern director Ben Kellagher.

The new four-tier farm support system has been much simplified when compared to the original proposition.

Last year saw the introduction of the Whole Farm Plan, and enforcement will be applied from 2026 onwards.

The other main change for 2026 will be the introduction of Enhanced Greening, which means more farming businesses will need to engage with ecological focus areas (EFA).

Four new options have been added to EFA. The rate will remain at 5% of arable land for 2026, but is set to increase to 7% by 2027.

Early confirmation that the Agri-Environment Climate Scheme (AECS) will open again for applications in 2026 is to be welcomed.

AECS will also be extended until at least 2030.

This provides more evidence that the transition to the new four-tier policy framework in 2026 will not see a raft of new schemes, but familiar ones with some revisions “slotted” into the tiers.

The likelihood of no change in the level of farm support in Scotland for 2026 is good news. But farmers need to make required strategic and investment decisions.

If the Scottish government’s ambition is to make the country a global leader in sustainable and regenerative agriculture, that aim needs to be matched with financial backing.

Wales

As we move into 2026, preparation for the Sustainable Farming Scheme (SFS) is well under way.

Farmers can enter the scheme from 1 January 2026 or continue to participate in the BPS, reduced to 60% of the 2025 level.

The SFS requires much additional commitment from farms, and includes 12 compulsory “universal actions”, says Andersons consultant Kerry Jerman.

Under BPS, only grassland and crops were allocated entitlements. Eligible land under SFS includes all habitat land, such as woodland, scrub, dense bracken and small ponds.

For upland farms in particular, this will dramatically increase eligible land area; estimated SFS payments will be similar (or in some cases higher) than BPS.

Conversely, farms with mainly productive land will need to create temporary habitat to achieve the 10% habitat area. This will require additional planning and implementation, which usually has a cost.

Universal action requirements for continuous professional development and benchmarking are pushing some older farmers to hand over to tech-savvy younger generations.

These actions will require additional administration and time, which is likely to mean the most profitable farm businesses are unlikely to participate in them or, in turn, the SFS scheme.

However, beef and sheep farming, in particular, is not viable without some form of support.