Prepare early for 2026 Capital Grants applications

Farmers planning to apply for a Capital Grant when the scheme reopens in July 2026 are advised to start their preparations now, with Defra warning it expects there to be more applications than funding available.

The Capital Grants scheme provides one-off grants for items or works which will improve air and water quality, support natural flood management and restore hedges and walls.

Defra revealed last month that the budget for the scheme has been increased from £150 million in 2025 to £225 million in 2026.

However, last year the funding allocation ran out less than a month after the opening of the application window and strong interest is expected again this year.

As an early warning system for when the scheme may close, ministers have said updates will be issued when uptake reaches 25%, 50% and 75% of the allocated budget.

Rob Wilkinson, a farming consultant within the Rural team of Strutt & Parker, says: “‘Our advice is to prepare early, so you’re ready to submit as soon as the window opens in July.

“Guidance notes for the 2026 round of the scheme will not be published until May, but we are assuming the list of items available will be broadly similar to previous years.

“Preparation involves checking that the business information and mapping details held by the Rural Payments Agency is up to date.

“It is also important to take the time to review cash flows and weigh up the likely returns before committing to an application. Businesses will need to fund the full cost of any works upfront, with the grant paid retrospectively. It is therefore vital to ensure the figures stack up and that any investment supports your longer-term strategy.”

As in previous years, there are items which require support from the local Catchment Sensitive Farming Officer (CSFO) before making an application in July. These include concrete yard renewal, hardcore tracks, self-supporting slurry store covers, sprayer load and washdown areas and the roofing of silage clamps, collecting yards, muck heaps and slurry stores.

“Booking a visit from a CSFO at this point may be difficult – although always worth a try – as Defra has said the priority over the coming weeks will be carrying out visits that are already in the diary.

“However, if you have received CSFO support in the last two years for these items, you can use this support when you apply.”

The list of items available through the Capital Grants scheme will be organised into the following six groups:

• Boundaries, trees and orchards
• Water quality
• Air quality
• Natural flood management
• Assessments
• Improvements

Funding limits will continue to apply to four of the six groups in the offer:

• £25,000 for the water quality, air quality, and natural flood management groups 
• £35,000 for the boundaries, trees and orchards group.

If you would like help in making a Capital Grants application, please contact Natalie Gaibani or Rob Wilkinson.