Defra has announced new measures to support farmers affected by prolonged dry weather and drought across England. The measures include greater flexibility within existing Environmental Land Management (ELM) agreements, additional Sustainable Farming Incentive (SFI) funding, support for on-farm reservoirs and changes to help improve access to water.
ELM agreement flexibilities
Defra has introduced temporary adjustments to ELM agreements to help farmers affected by the current drought. These changes will allow agreement holders to:
• Cut and graze land within ELM agreements to help address shortages of grazing, forage and bedding.
• Create firebreaks to reduce the risk of wildfire damage to crops, livestock and property.
• Delay the establishment of certain actions where dry conditions have prevented successful planting.
Importantly, making use of these temporary adjustments will not affect ELM payments. The measures apply to SFI, Countryside Stewardship and Higher Level Stewardship agreements. As of 15 August 2026, all counties in England meet the required drought status, making the flexibilities available to all eligible agreement holders.
Increased budget for SFI 2026
A further £50 million has been allocated to SFI 2026 Window 2, increasing the available budget for new agreements to £290 million. Defra says the funding will help more farmers access support at a time when many businesses are facing reduced yields and rising costs.
The scheme supports a range of sustainable farming practices that can improve drought resilience, including measures that enhance soil health and increase the land’s ability to retain moisture. Window 2 is expected to open to all farmers in September.
Water Management Grant
Defra has confirmed that the Water Management Grant will reopen this autumn, with up to £15 million available to support the construction of on-farm reservoirs.
The grant is intended to help farmers capture and store water, with funding expected to focus primarily on water storage for irrigation within the horticultural and arable sectors.
Easier planning for reservoirs
Alongside the grant funding, the Government has announced measures to reduce planning barriers associated with reservoir construction. Updated planning guidance is expected later this year, providing greater clarity for farmers looking to invest in water infrastructure.
Defra and the Ministry of Housing, Communities and Local Government will also work with industry representatives to review whether further planning reforms may be required to support future investment in water storage.
Support with abstraction licences
Farmers with abstraction licences could be granted additional flexibility by the Environment Agency, such as longer abstraction periods, earlier reservoir refilling, or opportunities to trade water allocations with other licence holders, subject to environmental safeguards.
From September, the Environment Agency is also expected to simplify the application process for long-duration reservoir abstraction licences.
If you would like to discuss how these announcements may affect your business, or explore future funding opportunities, please contact the office on 01884 212380 or email mollyhunter@acornrpc.co.uk.
