Analysis: Post-Brexit farm support – how is Defra spending the money?

One of the reasons many farmers voted for Brexit in 2016 was because they were so fed up with Brussels red tape.

Our survey at the time, run in the weeks before the June referendum, had 72% citing “regulation and policies” as their primary reason for planning to vote “leave”.

See also: Support payments issued to Scottish and NI farmers

The hope then was that Brexit would deliver a “bonfire of red tape”, leading to a simpler world in which farmers would be left to get on with the job of farming.

But the recent publication of Defra’s Farming and Countryside Programme (FCP) annual report for England reveals what a forlorn hope that was. 

To give credit where credit is due, the current administration has at least got the money out of the door – unlike the previous government which failed to spend some £358m of the farming budget from 2022 to 2024.

According to the latest FCP report, the £2.6bn Labour said it would spend in 2024-25 has been spent.

The ongoing process of switching from old EU legacy schemes to new post-Brexit policies has, of course, created winners and losers.

But the outstanding impression from the report is one of complexity. So exactly where have the funds landed and what schemes might farmers take advantage of in the years ahead?

Direct payments (£813m)

These are disappearing fast, and while 82,000 farmers benefited from “delinked payments” (formerly BPS) in 2024-25, the amount received came to £811m out of the total budget of £2.6bn – less than half of what it was previously and disappearing fast.

(A further £2m went to the 1,200 farmers who joined the “lump sum exit scheme” in 2022.)

Environmental Land Management (£1.394bn)

Hang on to your hats! This policy area contains no less than nine sub-headings, with further support schemes hidden within each. The main ones are:

Agri-environment schemes  

These make up the bulk of payments – accounting for just over £900m in 2024-25 – comprising of both legacy schemes and newer programmes.

For example, Environmental Stewardship schemes are still managed by about 6,000 farmers, covering Entry Level Stewardship and Higher Level Stewardship agreements.

Countryside Stewardship also operated from 2016 to 2023, so many schemes are still active. They may be Mid Tier CS agreements or Higher Tier CS agreements, comprising of both revenue items and capital grants.

By 31 March 2025, some 31,900 CS revenue payments were issued by the Rural Payments Agency on behalf of Defra.

New Mid Tier CS agreements are no longer available, since the scheme was merged with the Sustainable Farming Incentive in May 2024.

However, a new CS Higher Tier scheme opened this week, paying producers for going “above and beyond” the more basic Sustainable Farming Incentive (SFI).

Sustainable Farming Incentive

The SFI has had a chequered history, having launched in 2022 following a previous pilot. There are now some 25,300 SFI 2023 agreements and 14,000 SFI 2024 agreements in place.

The FCP Programme report shows that just over £300m was paid out in 2024-25 for the SFI. Defra proudly states that 885,000ha of arable land is now farmed without insecticides thanks to the SFI with 85,000km of hedges protected and restored.

While Defra drew a lot of flak for suspending the expanded offer earlier this year, the new Defra secretary Emma Reynolds insists devising a new-look scheme is a top priority.

When it might start, what it will focus on and how it will be targeted remain to be seen.

Landscape Recovery

This is the third “tier” of Environmental Land Management, designed to support large-scale, long-term projects to benefit the environment and climate.

Last financial year it absorbed just £15m, with a particular focus on peatland restoration.

Farming in Protected Landscapes  

Another “big budget” area, with £49m allocated to more than 2,300 projects engaging 4,500 farmers in 44 “protected landscapes”.

With this money, 85km of new hedgerows have been planted, 293 ponds restored and 9.6km of dry-stone wall restored.

Slurry Management Grants  

The Defra report shows that around £10m was spent in this area, including slurry infrastructure grants to build more stores and pay for covers.

Nature for Climate Fund  

Some £18m was spent on this area – with an emphasis on increasing the nation’s tree cover.

The England Woodland Creation Offer comes within this budget heading, paying farmers up to £12,700/ha to cover the cost of planting and managing new woodlands.

Water management grants

Worth £54m last financial year, this covers the work of the Internal Drainage Boards, including works to help improve flood resilience across 400,000ha of agricultural land.

Productivity and Innovation (£274m)

The other main spending area, after Environmental Land Management, is that of grants for productivity and innovation. Again, it takes many forms:

Farming Investment Fund  

This paid out some £46m in 2024-25, including £32.5m for the Farming and Equipment Technology Fund (FETF).

Eligible businesses could apply for up to £50,000 for “small grant” items linked to  productivity and slurry, and £25,000 for animal health and welfare items.

Only one round of the scheme was held in 2024, despite the promise there would be three.

A new FETF has been held in 2025, with more than 100 equipment and technology items on offer, including livestock handling equipment, sealed water tanks, and monitoring systems for poultry housing. More than 9,500 applications have been made.

Defra also spent £13.4m in 2024-25 for “larger grants” linked to adding value, improving farm productivity and water management.

Farming Innovation Programme  

Delivered in partnership with Innovate UK, total spend in this area came to £29m, with various rounds held to offer research groups alongside farmers the chance to test and develop ideas to improve productivity, sustainability and resilience in agriculture.

Farm Resilience Fund  

Some £17m was spent providing one-to-one business advice to more than 5,600 farmers.

Rural England Prosperity Fund  

This fund was worth £78m, helping new and existing rural businesses develop products and facilities of benefit to the local economy, including support for diversification.

Farming Recovery Fund  

This one-off scheme paid some £59m to more than 12,500 farmers affected by storms and wet weather between October 2023 and March 2024.

It paid up to £25,000 for restoring farmland, though questions were raised over whether the distribution of cash was fair or accurate.

Animal Health and Welfare (£83m)

According to the report, some £63m was spent on developing the Livestock Information Service, aiming to deliver a new UK-wide platform to co-ordinate data on livestock movements across all UK regions.

In terms of “money for farmers”, grants were also made to improve calf and laying hen housing, and there was a third round of equipment and technology grants linked to health and welfare.

More than 3,000 claims were made for vet visits and “endemic disease follow up visits”. Pig farmers,  for example, can claim £557 for a vet visit and £923 for a follow-up.

CS Higher Tier scheme launches for 1,500 invited farmers

© Martin Hole

Countryside Stewardship Higher Tier (CSHT) is now open – but so far only to around 1,500 selected farmers in England who have received “pre application advice” from Natural England, the Forestry Commission, or related bodies.

The CSHT rewards sustainable land management that protects, restores, or enhances the environment and combats climate change.

It includes a variety of land types – woodlands, wetlands, floodplains, commons and sites of special scientific interest.

Defra says the CSHT has been streamlined, with online applications, flexible start dates for agreements, and comprehensive guidance available on Gov.UK, including a “Find funding for land or farms” tool to help identify actions.

Participants may build their plan from 99 base actions, 33 supplemental actions, plus capital items. Likely popular actions include:

•  Flower rich margins and plots (CAB18) at £798/ha a year for five years
• Herbal leys (CGS4) at £382/ha a year for five years
• High density in-field agroforestry (CAGF1) at £849/ha a year for 10 years

Agreement durations vary and payments are made quarterly, with the first instalment due four months after the agreement start date.

New actions cover agroforestry, river and floodplain restoration, flood risk reduction, and permissive public access.

Payment gap? 

Grazing marshes at Montague Farm, East Sussex © Martin Hole

Martin Hole, who farms with his family at Montague Farm on the western edge of the Pevensey Levels in East Sussex, is one farmer who has been invited to apply for the CSHT scheme.

He manages a flock of Romney ewes and a herd of Sussex and Angus cattle.

However, with his current Higher Level Stewardship agreement ending in December, he is concerned about a potential payments gap and its impact on the farm’s vital natural habitats.

“Stewardship has been central to how we farm – especially protecting vital wetlands – and any delay or risk to future support is unsettling,” he says.