Government Commits £2.7 Billion Annually to Support Sustainable Farming and Nature Recovery

The UK Government has announced an updated funding package that will allocate over £2.7 billion per year into sustainable farming and environmental recovery from 2026/27 through 2028/29 in England, following the latest Spending Review on the 11th June 2025.

Key highlights include a 150% increase in funding for Environmental Land Management (ELM) schemes—from £800 million in 2023/24 to £2 billion by 2028/29. Overall, the Farming and Countryside Programme will provide an average of £2.3 billion per year, with an additional £400 million earmarked annually for nature projects like tree planting and peatland restoration.

However, the spending forecast does show a decrease in funding in other grants such as productivity, innovation and transition payments from £350 million in 2026-27 down to £250 million in 2028-29. In addition to this the de-linked payments for 2026 and 2027 are planned to be capped at a maximum of £600 per annum for all eligible farming businesses. The de-linked payments are planned to be reduced by 98% to the first £30,000 of reference payment with any amount over £30,000 being reduced by 100%.

Nearly 50,000 farms—covering about half of England’s agricultural land—are now enrolled in some form of an ELM scheme, these schemes include the Sustainable Farming Incentive, Countryside Stewardship Higher Tier, Landscape Recovery, and other capital grants. Whilst compared to other government department spending reviews, agriculture got off lightly, however the fiscal drag of inflation against spending has to be considered, where real terms of spending power are diluted by the rising costs of inputs the agricultural sector has faced since the previous spending review in 2021.

More details on reforms and funding mechanisms are expected to be announced later this summer.