Farm Funding at a Turning Point: Key Takeaways from the Secretary of State’s NFU26 Speech

We’re seeing a clear shift towards a more disciplined and business‑focused support framework. The simplification of SFI and the introduction of an agreement cap should widen access, but it also means farm businesses need to be more strategic about where schemes genuinely complement production. The increase in capital funding is particularly significant — for many clients, investing in infrastructure and technology will now deliver stronger long‑term resilience than relying solely on revenue payments.
— Elliot Taylor, Partner & Farm Business Consultant

Here are the main takeaways for farm businesses:

SFI is being reshaped, not removed

The Sustainable Farming Incentive is moving towards a simpler and more controlled scheme:

Actions reduced from 102 to 71 to remove duplication and improve practicality
A new £100,000 annual agreement cap, aimed at spreading funding across more farms
Management payments removed for new agreements
Some payment rates adjusted (including reductions on a small number of arable options)
Increased support for certain moorland actions recognising hill farm economics

Crucially, government confirmed payments will still be based on income foregone, but with a stronger emphasis on supporting food production alongside environmental delivery.

More certainty around applications

Two SFI application windows confirmed for this year:

June – prioritising smaller farms (under 50ha) and those not already in ELM revenue schemes
September – wider access

Budgets will be published in advance, with a commitment to no sudden scheme closures, which should help businesses plan with more confidence.

Capital grants expanding

A significant announcement was the reopening of ELM Capital Grants in July with up to £225m available, £50m more than last year. Funding will focus on:

Hedgerows and biodiversity measures
Natural flood management
Livestock and water-quality improvements

For many businesses, this may offer more immediate return on investment than revenue schemes alone.

Productivity funding continues

Alongside ELM changes:

£50m Farming Equipment & Technology Fund opening in March
£70m Farming Innovation Programme confirmed

The direction of travel is clear, environmental payments remain important, but productivity and resilience investment are becoming equally central.

What this means in practice

From a consultancy viewpoint, we are likely entering a phase where:

Schemes reward integration with commercial farming rather than land withdrawal
Mid-sized and smaller farms gain improved access to funding
Capital investment planning becomes just as important as annual scheme income

The detail will matter, but the overall shift is towards a more predictable, and more business-focused, support framework.

Now is a good time for farm businesses to review SFI positioning, future capital investment plans, and how environmental actions genuinely fit alongside production.