DEFRA announces a raft of updates
Capital Grants – wide ranging farm capital grants scheme, with those applications which were on hold from 2024 now to be processed in 2025 and new applications will be accepted later in 2025 but with funding limits.
Farming Equipment & Technology Fund – a useful grant scheme that partially funds a range of farming implements, equipment and technology and which will reopen in the spring but with an emphasis on ‘innovative equipment’.
Delinked payments – DEFRA have confirmed how Delinked Payments will be calculated in 2025, a significant reduction for most.
Sustainable Farming Incentive – very little new about SFI which, as a revenue based scheme, may be more exposed to the next Spending Review than capital schemes.
Farming in Protected Landscapes – for those in National Landscapes (AONBs) or the South Downs National Park, a flexible grant scheme which will remain open through 2025.
Capital Grants
In November 2024, ‘unprecedented demand’ led DEFRA to close applications to the Capital Grants scheme, halting the processing of active applications. Having secured additional funding, DEFRA are processing these outstanding 2024 applications.
DEFRA have announced that the scheme will reopen to new applications later this year, however there will now be funding limits in each of the 4 categories:
- £25,000 for water quality – which includes the fencing grants
- £25,000 for air quality
- £25,000 for natural flood management
- £35,000 for boundaries, trees and orchards
Each Single Business Identifier (SBI) can make one application per year, which can include items from more than one category, as long as the amount claimed under each category does not exceed its funding limit.
The Farming Equipment and Technology Fund (FETF)
DEFRA are reopening That Farming Equipment and Technology Fund in Spring 2025. This fund offers grants of between £1,000 and £25,000 for equipment, technology and small infrastructure to boost productivity, improve slurry management and enhance animal health and welfare.
We will provide more details as they are announced.
2025 Delinked Payments
Defra have announced how delinked payments will be calculated for 2025.
This year, for Reference Amounts less than £30,000, the Delinked Payment will be a 76% reduction to the Reference Amount.
As a reminder, the Reference Amount is the average of the income received in BPS years 2020, 2021 and 2022.
For Reference Amounts over £30,000, there will be the same 76% reduction to the Reference Amount below £30,000, with a 100% reduction to the Reference Amount over £30,000.
Defra have provided a calculator which can be used to calculate your 2025 payment https://calculate-direct-payment-reductions.defra.gov.uk/.
As last year, the payment will be made automatically from 1st August 2025, with no need to apply.
Payments will be further reduced in 2026 and 2027, though the exact reductions are yet to be announced.
Sustainable Farming Incentive
As we have reported previously, last July, the expanded offer of the Sustainable Farming Incentive (SFI) was released, making 102 individual Actions available. In recent months, our Rural Professional team have completed a number of successful applications for clients from a wide range of farming systems and sizes, the scheme proving popular with clients for a number of reasons:
- Flexibility – include as many or as few actions as works for your holding.
- Management Payment – to reflect the administrative costs, worth £40 per hectare* included in the first year, £20 per hectare* in years 2 & 3.
- Regular payments – quarterly, starting 3 months after the agreement starts.
- No minimum area – of land required.
- Advise & Prevent approach – from Defra, supporting farmers with compliance rather than issuing immediate penalties.
If you would like more information on SFI and how it can be applied to your holding, then please do contact a member of the Rural Professional team.
*Available on the first 50ha entered into an agreement.
Farming in Protected Landscapes (FiPL)
This funding programme has, since its launch in 2021, supported thousands of projects in National Landscapes (AONBs) and National Parks that support nature recovery, mitigate the impacts of climate change, provide opportunities to discover landscapes and cultural heritage, and support nature-friendly, sustainable farm businesses.
It has been announced that funding under FiPL will continue into 2026 – we will report further when more details come available.
For further information, please get in touch with our Rural Professionals on Kent 01892 832 325 or Sussex 01435 873 999.
