£150m Capital Grants offer returns to help farmers boost profits
Source: gov.uk (2025-07-03)

The government is making a substantial investment in the future of farming, supporting cleaner rivers, healthier soils, and more resilient landscapes.

Thousands of farmers will benefit from £150 million in new funding as the government opens a new round of its flagship Capital Grants offer (https://www.gov.uk/government/collections/capital-items-guidance-for-applicants-and-agreement-holders), supporting sustainable food production and environmental improvement.

The offer funds a wide range of on-farm projects – from tree planting and flood prevention to improved slurry storage and water filtration – helping farmers boost profitability while protecting the environment.

Last year alone, Capital Grants helped plant over 4,000 miles of hedgerows and upgrade slurry systems to keep our rivers clean – real, tangible improvements for farming and the environment.

Environment Secretary Steve Reed said:

British farmers work tirelessly to feed the nation and look after our countryside. This major investment will give them the tools to cut pollution, restore nature, and grow their businesses.

It forms part of the record £11.8 billion we’ve committed to sustainable farming during this Parliament – boosting food security, supporting rural growth, and protecting the environment.

The announcement is the latest in a series of steps taken by the government to support the farming industry. These include slashing costs for food producers by cutting red tape on exports to the EU, appointing former NFU president Baroness Minette Batters to recommend reforms to boost farmers’ profits, and ensuring farmers get a bigger share of food contracts across our schools, hospitals, and prisons.

Farmers and land managers are now able to apply for a total of 78 items, ranging from supporting natural flood management projects to improving water quality on farms under this new round of the Capital Grants offer. Four new items have been added including assessing woodland condition, creating wildfire management plans, repairing drystone walls and hosting educational visits.

Changes are also being introduced to ensure that more farm businesses can access these grants - making it fairer for farmers by setting funding limits that maximise the number of farms benefiting, while enabling Defra to manage budgets more effectively. This includes funding limits to four of the six groups of capital items in this Capital Grants offer. An application can include items from each of the six groups. The funding limit for four of the groups is:

£25,000 maximum for each of the following three groups: water quality, air quality, and natural flood management

£35,000 maximum for the group covering boundaries, trees, and orchards

Defra will also listen to feedback from farmers and use it to improve the offer ahead of the next round, which we plan to open in 2026.

This comes as the Environment Secretary and Farming Minister head to the Groundswell Show to discuss the new Capital Grants launch. More details about the reformed SFI scheme will be published this Summer.

This is part of the government’s wider Plan for Change to grow the rural economy, support our farmers and boost Britain’s food security.