Farmers in England will be able to apply for a “simpler and fairer” Sustainable Farming Incentive later this month.
The 2026 scheme is backed by £240m for new agreements, building on more than £560m already committed.
The environmental scheme is designed to cut red tape and pay farmers for taking practical steps that benefit their land such as improving soil health, keeping waterways clean, and creating space for wildlife.
Applications open on 30 June for two groups: small farms and farms without an existing Environmental Land Management (revenue) agreement.
A second application window will open in September 2026, giving all farmers and land managers the opportunity to apply.
The NFU said the new scheme provided some “welcome certainty” but that it didn’t go far enough in the face of “sharply rising costs”.
“Today’s budgets for key agri-environment schemes provide welcome certainty for farmers and growers, giving them a clearer basis to plan for their businesses,” said NFU vice-president Robyn Munt. “However, it is becoming abundantly clear that there is a significant gap between government and farmers ambition for ELMs and the funding to deliver it.
“At a time when farm businesses are already hard-pressed by the Middle East conflict, we urge Defra ministers to step up funding to meet demand from farmers to deliver for the environment and food security.”
The previous scheme was mired in controversy after the application window closed early last year, leaving many farmers in limbo.
Among the offer are several actions that encourage the reduced use of synthetic fertilisers in favour of more sustainable and environmentally friendly options, cutting input costs and boosting resilience to global market shocks.
At least £50m will also be available for new Countryside Stewardship Higher Tier agreements this year, supporting targeted environmental improvements where they will have the greatest impact.
However, 13,000 Countryside Stewardship Mid-Tier schemes are ending this year which, according to Munt, means, “there is a real risk the budget won’t stretch far enough to support those already delivering for nature to move into SFI26”.
She added: “This contract with government must not be broken at such a critical time, bearing in mind the legislative targets government itself has set for environment delivery.
“Farmers are fundamental to food security. They produce the food we rely on, support rural communities, and play a vital role in our economy,” said environment secretary Emma Reynolds.
“Under the previous Sustainable Farming Incentive, a quarter of funding went to just 4% of farms, so we have redesigned it to be simpler and fairer, helping more farms grow, boost productivity and protect the natural environment they depend on.”
The government said the new offer delivered “greater certainty, fairer access to funding and a simpler, more accessible for farmers”.
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