How will farmers be affected by the latest Defra announcements?

This week saw a batch of announcements made by Defra Secretary of State, Steve Reed, regarding a selection of grant schemes for farmers in England.

The thrust of the announcements are largely welcome and follow a long period of silence from the Labour government on the future of these schemes. However, as is often the case, we are yet to see the detail behind these overarching announcements, which makes it difficult to determine how individual businesses will be impacted.

The announcements featured some details which had already been trialed, such as the commitment to protect farmers in trade deals, but also included new information on the UK Government’s plans for a number of grant schemes.

The key points for farmers and land managers to consider are:

• Payment rates for a range of Higher Level Stewardship (HLS) options will be increased in 2025
• The applications for the paused capital grant schemes submitted in 2024 will be processed. Applications will reopen in the summer
• The Farming in Protected Landscapes (FiPL) scheme has been extended for one year to March 2026
• Further rounds under the Farming Equipment and Technology Fund (FETF) will launch in the spring
• The Animal Health and Welfare Pathway has been expanded to allow a vet visit for multiple species
• The Farming Innovation Programme will include £63m of competitions in 2025/26, with £20.6m available for the Accelerating Development of Practices and Technologies (ADOPT) fund across 25/26

The increase in HLS payment rates for a range of options is a positive step, and is something the CLA has been pushing particularly hard for over the past 12 months.

The proposal is to increase payment rates by £30m ‘from this year.’ However, it remains to be seen how individual agreement holders will benefit, with news on this expected by April. The process for those seeking to end HLS agreements and start new Sustainable Farming Incentive (SFI) and Countryside Stewardship Higher Tier agreements is still very unclear, and the CLA continues to push for clarity on this.

Similarly welcome is the news that the 4,040 capital grants applications which had been submitted last year will be processed, particularly given speculation around whether all of the paused applications would be honoured. It’s also encouraging to see that capital grant applications will reopen in the summer. To try and better control spending under the scheme, the proposal is to re-introduce caps per application for items within four categories. More information can be found in this government blog.

The 12-month extension of the Farming in Protected Landscapes (FiPL) scheme is welcome news, though it is only a short-term extension and the level of funding allocated has not been confirmed. The CLA will continue to push for a longer-term extension and expansion of the FiPL programme to areas outside of Protected Landscapes.

The proposal to launch a further round of the FETF is positive, though the list of eligible equipment is still to be verified. The scheme is due to be split between a £30m round for productivity and slurry and £16.7m round for animal health and welfare. This is expected to run in a similar fashion to previous rounds, with discussions on how to refine any in the future due later in the year. There is more information in this blog.

The expansion of the Animal Health and Welfare Pathway to allow vet visits for multiple species is of niche interest but is also a positive step that eligible members can take advantage of. Similarly, the Farming Innovation Programme, which funds research and development projects, is also of more limited interest to CLA members, though there is more scope for farmers to be involved through the upcoming ADOPT fund. More information is available in this blog.

The announcements were not all-encompassing and there remain grant schemes we will have to wait for further information on until after the spending review in June. This includes the Landscape Recovery Scheme, the Farming Transformation Fund (which included schemes such as the Slurry Infrastructure Grant) and the process for ending Higher Level Stewardship agreements early to begin new Environmental Land Management (ELM) agreements.