Farmers face £50,000 cap on nature payments as Defra reopens scheme with a smaller budget

England’s flagship scheme to pay farmers for hedgerows, wildflower margins and soil care will reopen to new applicants on 3 November but with a cap of £50,000 a year per business, Defra said on Monday, ending a seven-month freeze that left thousands of farms in limbo.

The sustainable farming incentive closed to new entrants in March after its £1.1bn budget was committed faster than expected. The reopened scheme will have £920m available for 2027-28, the department said, and will give priority to farms under 200 hectares, upland holdings and those in nitrate-vulnerable catchments. Existing agreements will be honoured until they expire.

Officials estimate that about 6,000 of the 42,000 farms currently in the scheme receive more than the new ceiling, with the largest single agreement worth £412,000 a year. The cap will apply when those agreements come up for renewal.

“The money was going disproportionately to the biggest estates for doing things many of them were doing anyway,” a Defra spokesperson said. “This version puts it where the environmental return per pound is highest: smaller, mixed and upland farms that were underrepresented in the first round.”

Farming groups gave the announcement a mixed reception. The National Farmers’ Union said reopening the scheme was “overdue and welcome” but that the cap would punish farms that had restructured to deliver nature work at scale. Its vice-president, Judith Penhaligon, who farms near Launceston in Cornwall, said: “A 2,000-acre arable farm with 30 miles of hedges does not become less valuable for wildlife because it is big.”

For smaller farmers the picture is different. Elis Pritchard, 44, who runs 180 ewes and a small suckler herd on 90 hectares above Clun in Shropshire, applied in February and was told the scheme had shut three days before his application was processed. “I had planted 400 metres of hedge on the promise of the payment,” he said. “Seven months with nothing coming in for it. If I get in this time, the £11,000 a year is the difference between the farm washing its face and not.”

The scheme is the main successor to the EU’s area-based subsidies, which were phased out in England at the end of 2027 under the government’s agricultural transition. Wildlife groups said the cap was defensible but that the overall budget, which is lower in real terms than the EU payments it replaced, was not. The Wildlife Trusts estimated that meeting England’s 2030 nature targets would need at least £1.6bn a year in farm payments.

Defra said it would publish a list of the 20 highest-paying actions, including species-rich grassland creation at £646 a hectare and winter bird food plots at £853, next week.