Lizzy Elgie, Farm & Environmental Advisor at StephensonsRural, shares the latest on SFI26, Capital Grants, FETF agreements and other funding opportunities for farmers and land managers.
The stewardship and grants team at StephensonsRural has had a busy start to the summer, preparing for the latest funding opportunities and helping farmers and land managers plan their applications.
The Sustainable Farming Incentive 2026 (SFI26) is now under way, the main Capital Grants offer is due to open shortly and Farming Equipment and Technology Fund (FETF) agreements are beginning to arrive. Here is what we know so far and what rural businesses should be considering over the coming weeks.
SFI 26: where are we now?
SFI 26 includes 71 actions, with each farm business limited to one agreement across the scheme. The maximum value of an agreement is £100,000 per year.
The first application window opened on 30 June with £60 million available for farms with between three and 50 hectares of agricultural land linked to their Single Business Identifier (SBI) on 1 January 20261 January 2026, as well as farms without an existing Environmental Land Management revenue agreement.
In its latest update, published on 13 July, Defra confirmed that around 75% of the Window 1 budget had been allocated based on applications received so far. Demand has levelled off following a strong start, but funding is becoming increasingly limited and eligible businesses planning to apply are being encouraged to submit their applications as soon as possible.
Defra will continue to monitor the remaining budget and provide a further update if all the funding is allocated and Window 1 closes.
Farm businesses eligible for the current round that do not apply will have another opportunity when Window 2 opens, which is expected to be in September. However, each business, identified by its Single Business Identifier, can have only one SFI 26 agreement across the two windows.
With much of the Window 1 budget already committed and sufficient time needed to develop a well-planned agreement, our stewardship and grants team is now concentrating much of its work on helping clients prepare for the wider opening in September.
Demand is expected to be high, particularly among businesses with Mid Tier and SFI 23 agreements approaching their end. Anyone considering an application should begin reviewing their land and available actions now.
Rural Payments Agency (RPA) maps should show all the land parcels to be included in an application, with the correct areas and land covers. Land details, permissions and contact information should also be checked in advance. Resolving any discrepancies early will help to avoid delays once an application is submitted.
Capital Grants 2026
The main Capital Grants 2026 offer is scheduled to open in late July, with £225 million available to support environmental improvements across England.
Items are expected to include support for work such as hedgerow planting and gapping up, stone wall restoration, stock-proof fencing, field gates, livestock troughs and associated pipework, subject to the eligibility of the land and the individual item.
Demand is likely to be strong. The 2025 offer was open for less than a month before all available funding was allocated, leaving many businesses unable to apply.
Those considering an application should begin gathering the necessary information and supporting evidence now.
Before applying, businesses should check that:
- RPA maps, contact details and business information are correct
- the proposed work has not already begun
- materials have not already been purchased
- any necessary consents and permissions are in place
- the land and proposed items meet the relevant eligibility requirements
Work must not begin and materials must not be purchased before a live agreement is in place. Agreements normally provide three years in which to complete and claim for the approved work.
Defra is also placing greater emphasis on supporting evidence. The required documents must be sent to the RPA within 10 working days of submitting an application. Applications worth more than £50,000 must also include a letter from an accountant confirming that the business has sufficient funds to complete the work.
A separate announcement on 10 July opened several agroforestry and woodland assessment items through Higher Tier Capital Grants. These are available throughout the year and sit separately from the main Capital Grants 2026 offer due to open later in July.
Our team is currently helping clients review eligibility, map proposed work and prepare draft applications so they are ready when the main offer opens.
Farming Equipment and Technology Fund offers
Offers are now beginning to arrive for applications submitted to the Farming Equipment and Technology Fund (FETF) 2026.
The scheme supported investment across three areas: productivity, slurry management, and animal health and welfare. Applications were submitted between mid-March and 12 May.
As outcomes are received, the StephensonsRural team will contact clients about the next steps. Anyone receiving an offer should respond promptly so that the agreement can be accepted before approved equipment is purchased.
Successful applicants must purchase and receive their equipment and submit their claim by 20 January 2027.
Defra has confirmed that FETF 2026 will be the final standalone round of the scheme in its current form. From 2027, it plans to bring together elements of its existing grant schemes, although further details have yet to be announced.
Farming in Protected Landscapes (FiPL)
Our stewardship and grants team also continues to work closely with the North York Moors National Park and Howardian Hills National Landscape on opportunities available through the Farming in Protected Landscapes programme.
FiPL can support projects that benefit nature, climate, people or place. These may include restoring traditional agricultural buildings, improving habitats, conserving the character of the landscape or helping local communities engage with the countryside.
Funding levels depend on the balance between the public and commercial benefits of each project and can reach up to 80% in some circumstances.
Farmers and land managers within the North York Moors or Howardian Hills who have a potential project in mind are encouraged to discuss it with the team at an early stage.
We look forward to supporting clients with their applications throughout the summer and wish everyone a safe and successful harvest.
For professional advice on SFI 26, Capital Grants, FETF agreements or Farming in Protected Landscapes funding, please contact the StephensonsRural stewardship and grants team.
Call the York office on 01904 489731 or the Malton office on 01653 692151 and ask for Lizzy Elgie or Chris Muir. Early contact is recommended to allow sufficient time to assess eligibility and prepare the required information.