Lister Haigh’s March Rural Update

The Department for Environment, Food & Rural Affairs has now published full details of the Sustainable Farming Incentive 2026, alongside a £345 million funding package announced by Environment Secretary Emma Reynolds at the National Farmers’ Union Conference 2026.

£345 Million Funding Package

Farming Equipment and Technology Fund (FETF) – £50 million

The 2026 FETF round will open on 17 March 2026 and run for six weeks, closing at midday on 28 April 2026. The grant will consist of three themes: productivity, slurry management, and animal health & welfare.

Given the short application window, early preparation will be essential.

Capital Grants – £225 million

Capital Grants funding will increase by 50% compared to the £150 million available in 2025, with the scheme scheduled to open in July 2026. Grants are expected to be in high demand so please get in touch as soon as possible if there are any of interest. It is also recommended to contact your Catchment Sensitive Farming Officer to gain approval for any grants which require it.

Farming Innovation Programme – £70 million

The Government has allocated £70 million to the Farming Innovation Programme, which supports research and use of new technologies on farms. The programme aims to help farmers improve efficiency, sustainability and profitability through new approaches to crop and livestock management.

DEFRA Confirms SFI 2026 Details

SFI 26 will reduce the number of available actions from 102 to 71, with DEFRA aiming to simplify the scheme and focus funding on measures that support both environmental outcomes and productive farming.

Key structural changes include:

• A £100,000 annual cap per agreement
• A limit of one SFI agreement per farm business
• Confirmation that rotational actions cannot be increased in years 2 and 3 of the agreement
• There will be two SFI 26 application windows:
  • The first window will open in June for small farms (3ha to 50ha) and business without any Environmental Land Management Scheme agreements
  • The second application window will open in September for all other farms

Payment Rate Reductions for Key Actions

While some upland and moorland options have received uplifts, several widely used actions will see reduced payment rates under SFI 26 for new agreements:

• Herbal Leys (CSAM3) – reduced from £382/ha to £224/ha
• Winter Bird Food (CAHL2) – reduced from £853/ha to £648/ha
• Legume Fallow (CNUM3) – reduced from £593/ha to £532/ha

The Government has indicated these changes are designed to reduce payments for options which had previously led to large areas of productive land being taken out of food production and to spread funding more fairly across farms.

Existing SFI 23 and SFI 24 agreements will continue at their agreed payment rates for the duration of their agreements.

Limited Area Actions

There are 10 actions which cannot be done (individually or in combination) on more than 25% of the total agricultural area of the farm. These are as follows:

• Flower-rich grass margins, blocks or in-field strips (IPM2/CIPM2)
• Pollen and nectar flower mix (AHL1/CAHL1)
• Winter bird food on arable and horticultural land (AHL2/CAHL2)
• Arable grassy field corners or blocks (AHL3/CAHL3)
• Grassland field corners or blocks (IGL1/CIGL1)
• Winter bird food on improved grassland (IGL2/CIGL2)
• In-field grass strips (WBD3)
• Enhanced overwinter stubble (AHW7)
• Unharvested cereal headland (AHW9)
• Cultivated areas for arable plants (AHW11)

Farming Equipment and Technology Fund (FETF) – Claim Deadline Reminder

A reminder to clients that the deadline for submitting Farming Equipment and Technology Fund (FETF) claims is midday on 31 March 2026.

To ensure your claim is processed smoothly, you will need the following information:

• A copy of the invoice
• A bank statement showing payment
• Photographs of the item
• The serial number of the item (where available)

We recommend preparing this documentation in advance of the deadline to avoid any last-minute issues.

Hedge Cutting & Trimming Timings

A reminder that any hedgerows which are covered by the hedgerow management rules must not be cut from 1^st March to 31^st August.

If you need advice or help applying for exemptions, we’re happy to assist. More details on rules and exemptions can be found here: Hedge Cutting Rules

If any of the grants mentioned above are of interest, or you have any questions regarding the schemes, please do not hesitate to contact us for a discussion to be in the best position for when schemes open.