New drought support for farmers – what you need to know
With prolonged dry weather continuing to put pressure on farming businesses, the Government has announced a package of measures aimed at helping farmers manage the immediate impacts of drought while building longer term resilience.
Temporary flexibility under ELM agreements
Farmers with Environmental Land Management (ELM) agreements can benefit from temporary adjustments where dry conditions are affecting their ability to meet agreement requirements.
These include:
- Allowing land in an ELM agreement to be cut or grazed, helping with shortages of grazing, fodder, forage crops and bedding
- Allowing firebreaks to be created to help protect homes, livestock and crops from wildfires
- Giving farmers additional time to establish certain ELM actions where dry conditions have made planting seed mixes impractical
Importantly, using these temporary adjustments will not affect payments under the ELM agreement.
As of 15th August, all counties in England meet the criteria for these temporary adjustments, meaning that ELM agreement holders across England can currently make use of them. The flexibility will remain available until the relevant county returns to normal drought status.
£50 million additional funding for SFI26
The Government is increasing the funding available for Sustainable Farming Incentive 2026 (SFI26) Window 2 by £50 million, taking the total budget for new agreements to £290 million.
Window 2 is due to open in September 2026 and will be available to all farmers.
The additional funding is intended to provide farmers with a more reliable income stream while also supporting measures such as improved soil health, reduced soil disturbance and better water retention – all of which can help improve resilience to future periods of dry weather.
Water Management Grant to reopen
The Water Management Grant is also being reopened, with up to £15 million available to support the construction of on farm reservoirs.
The grant is expected to open in autumn 2026 and will particularly support water storage for crop irrigation, helping horticultural and arable businesses improve their resilience to drought.
Planning support for reservoirs
The Government is also looking to reduce planning barriers to the development of on-farm reservoirs and other agricultural infrastructure, including greenhouses, polytunnels and farm shops.
Environment Agency regulatory flexibilities
Farmers who hold an abstraction licence and are concerned about their water supply are encouraged to contact the Environment Agency as early as possible.
Temporary flexibilities are already available to help farmers access water during periods of extreme dry weather. Depending on individual circumstances and water availability, these can include:
- Extending abstraction seasons
- Allowing earlier reservoir refilling where conditions permit
- Trading water rights between licence holders
- Joining licences together to provide greater flexibility over where water can be used
- Moving or adding abstraction points
- Increasing licensed quantities where water is available and environmental conditions permit
Each request will be assessed by the Environment Agency, taking account of potential impacts on the environment and other water users.
There is also a longer-term change coming. From September, the Environment Agency will simplify the application process for long duration abstraction licences for reservoirs. This is intended to make it easier for farmers and other abstractors to secure licences that support investment in water storage and improve access to long-term finance.
What should farmers do now?
If you are affected by the current dry conditions, it is worth reviewing your ELM agreements to establish whether the temporary flexibilities could help your business.
It is also worth preparing ahead of the opening of SFI26 Window 2 and the Water Management Grant, particularly if you are considering investment in water storage or changes to your environmental land management.
We will continue to monitor the guidance and funding opportunities as further details are released.
Read the full Defra announcement: New drought support for farmers – Defra Farming Blog
