The government has announced the re-opening of Capital Grant Funding for Agricultural Land in a welcome boost to farmers and rural investment.
The scheme was temporarily closed to new applications in November 2024 after unprecedented demand saw a 42% increase in the net value of applications. The government reported it had by that point paid out £120m to approved schemes during the calendar year.
But writing to farmers who receive funding via the Rural Payments Agency (RPA) following the National Farmers’ Union (NFU) conference in February, the Secretary of State for Environment, Food & Rural Affairs, the Rt Hon Steve Reed MP, announced that the scheme would reopen again in summer 2025.
Capital Grants Funding is designed to support investment by farmers in infrastructure, machinery, and sustainable technologies in pursuit of specified environmental objectives, namely:
- Protecting and expanding boundaries, trees and orchards
- Improving water quality
- Improving air quality
- Natural flood management
Grants take the form of three-year agreements managed by the RPA. There is no limit on the amount applicants can apply for.
Applications submitted before November 24, 2024 are unaffected by the current announcement, with many currently being processed. Anyone who did not submit an application before the scheme was suspended is encouraged to look out for further announcements in the coming months.
HLS Rates to Rise
Mr Reed’s letter to RPA clients also included a number of other policy announcements for farmers. They included the news that Higher Level Stewardship (HLS) payment rates are set to rise in a further boost to landowners investing in biodiversity and landscape management initiatives. The updated rates are due to be announced in April.
Applications for the next tranche of the Farming Equipment and Technology Fund (FETF) will open in the spring, with a £30 million budget allocated to Productivity and Slurry and an additional £16.7 million for Animal Health and Welfare. Mr Reed indicated that rather than focusing on farm innovation, he wants the money “to help farmers who need the support, rather than those who just want it,” indicating that the fund will look to back any suitable investments that “develop your business and protect your bottom line”.
Similarly, the Farming Innovation Programme (FIP) competitions will offer up to £63 million in grants for pioneering agricultural projects over the course of the 2025/26 financial year. This includes the new Accelerating Development of Practices and Technologies (ADOPT) fund, launching in Spring 2025, which will provide £20.6 million to support farmer-led innovation trials. Additional rounds will focus on Net Zero Farming and Precision Breeding, each receiving £12.5 million to advance sustainable and profitable farming practices.
Summing up these and other policy updates, Mr Reed reiterated his view that “farmers must get a fair reward for the food they produce, and our package of reforms will achieve this.” As the agricultural landscape continues to evolve, farmers are encouraged to stay informed of all potential funding opportunities and plan in advance to take advantage of them. With funding windows opening soon, now is the time to plan ahead and maximise the benefits of these initiatives. Get in touch with Xeinadin’s Agriculture and Farming Finance team to discuss your next steps.
