DEFRA grant funding announcements

Recently, DEFRA (Department for Environment, Food & Rural Affairs) confirmed that several grant funds will re-open in the coming weeks, providing financial support for farmers and estates. These grants are designed to help improve productivity, sustainability, and innovation across the sector. However, this has been somewhat overshadowed by the closure of the Sustainable Farming Incentive (SFI) scheme, stopping payments with immediate effect. You can read more about recent grant announcements below.

What grants are re-opening?

Farming Equipment and Technology Fund (FETF)

The fourth round of the FETF will open this spring, offering grants for one-off purchases of equipment and technology to enhance efficiency and resilience. Funding will support items such as direct drills, slurry management technology, and livestock welfare improvements. The total funding available is £46.7m, with grants ranging from £1,000 to £25,000.

Capital Grants scheme

The Capital Grants scheme will reopen later this year, following a pause to the scheme last year. Around 4,000 applications from last year are being reviewed and processed, meaning that much of budget for this scheme may be used up before new applications are considered. The overall budget is £45m, with funding caps set for different categories:

£25,000 for water quality improvements
£25,000 for air quality measures
£25,000 for natural flood management
£35,000 for boundaries, trees, and orchards

Successful applicants will have up to three years to claim the funding, and farmers and estates can apply for multiple categories under a single application.

Accelerating Development of Practices and Technologies Fund (ADOPT)

Launching in Spring 2025, ADOPT will provide grants of between £50,000 and £100,000 from a £63m fund to support farmer-led trials of innovative technologies and methods. This funding aims to support projects that improve productivity, food security, and environmental sustainability.

Farming in Protected Landscapes (FiPL)

FiPL has been extended beyond March 2025 and will continue to offer up to 100% funding for land managers in National Parks and protected landscapes. This funding prioritises projects that supports the climate, nature conservation, and rural communities.

Higher Level Stewardship (HLS) payment increases

DEFRA have also announced a £30m increase in payment rates for HLS agreements to ensure a fairer compensations for farmers delivering environmental benefits under these schemes.

Farming Innovation Programme (FIP)

FIP continues to fund research and innovation in the agricultural sector. Upcoming funding rounds will focus on precision breeding, net zero initiatives, and industry-led R&D competitions, with a total investment of £98m committed to ongoing projects.

Sustainable Farming Incentive (SFI) closure

In addition to the re-opening of several DEFRA grant funds, it is important to note the closure of the SFI payments announced on 11 March 2025 with immediate effect. The SFI scheme closure was initially introduced to reward farmers for adopting practices which improve productivity and at the same time protect the environment and climate.

For farms that were considering SFI, this closure means that they will need to look to alternative funding sources for future environmental work. This includes seeking grants through the various schemes outlined above, such as the Capital Grants scheme and ADOPT fund, which may provide opportunities to continue improving productivity and sustainability. Farms should also consider the extension of the Farming in Protected Landscapes (FiPL) programme as an alternative source of funding for conservation and rural development projects.

We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.

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