New Drought Support for Farmers: What You Need to Know

2 days ago
5 min read

Following one of the driest summers on record, the Government has announced a package of measures to support farmers dealing with the immediate impacts of drought, while also helping farm businesses become more resilient to increasingly unpredictable weather.

The announcement follows the driest July on record in England and Wales and forms part of a wider government response to drought, extreme heat and heightened wildfire risk.

A total of £65 million of additional funding is being made available through Defra’s farming budget, alongside temporary flexibilities for Environmental Land Management (ELM) agreements and measures intended to make it easier for farmers to access and store water.

Importantly, the £65 million is not a direct drought compensation payment. It comprises an additional £50 million for SFI26 Window 2 and up to £15 million for the Water Management Grant, alongside a number of other practical measures.

What has been announced?

Temporary flexibility for environmental agreements

Temporary adjustments have been introduced for farmers and land managers whose Environmental Land Management agreements are being affected by the exceptionally dry conditions.

The adjustments apply to:

Sustainable Farming Incentive (SFI)
current Countryside Stewardship Higher Tier
legacy Countryside Stewardship, including Mid Tier and Higher Tier
Higher Level Stewardship under Environmental Stewardship.

The temporary measures are designed to give farmers greater flexibility where drought is making it difficult to meet existing agreement requirements. Depending on the individual action or option, this can include allowing land to be cut or grazed to help address shortages of grazing, fodder and bedding, creating firebreaks, and giving farmers longer to plant and establish some seed mixes.

Using an eligible temporary adjustment will not affect the payments received under an ELM agreement.

As of 15 August, all counties in England were classed as either in drought or prolonged dry weather, meaning agreement holders across England could use the adjustments where applicable. They will generally remain available until the Environment Agency returns the relevant county to normal status, although individual actions can have different end dates.

Farmers should check the detailed guidance carefully before making changes. Other agreement obligations and relevant regulatory requirements continue to apply, including requirements relating to protected sites and species.

Find out which temporary adjustments are available and the conditions that apply: https://www.gov.uk/guidance/hot-and-dry-weather-temporary-support-for-farmers-in-2026

Additional £50 million for SFI26

The Government has added £50 million to Sustainable Farming Incentive 2026 Window 2, bringing the total SFI26 budget for new agreements to £290 million.

Window 2 is due to open to all farmers in September.

Defra says the additional funding is intended both to give more farmers access to the scheme and to support farming practices which can improve resilience to future drought.

This includes actions designed to improve soil health and water retention, such as increasing soil organic matter through cover cropping and minimising soil disturbance.

Find out more about SFI26, including eligibility, actions and how to apply: https://defrafarming.blog.gov.uk/2026/06/26/sfi-2026-what-you-need-to-know/

Up to £15 million for on-farm water storage

The remaining element of the £65 million package is up to £15 million to reopen the Water Management Grant, with the new round expected to open in autumn 2026.

The funding will support investment in on-farm water storage, helping farmers store water when it is available and use it when it is most needed during dry periods.

Defra says the scheme will focus particularly on water storage for crop irrigation, helping the horticulture and arable sectors adapt to climate change and improve their resilience to drought.

Detailed guidance for the new round, including eligibility and the application process, has not yet been published. Farmers considering investment in water storage should therefore look out for further information from Defra ahead of the scheme opening.

Find out more about the new Water Management Grant and drought support package: https://defrafarming.blog.gov.uk/2026/08/15/new-drought-support-for-farmers/

The Government has also announced plans to reduce barriers to the development of on-farm reservoirs. Updated planning guidance is expected in September, while Defra and the Ministry of Housing, Communities and Local Government will work with farming organisations to review the effectiveness of existing permitted development rights for farm reservoirs.

Greater flexibility around access to water

The Environment Agency will also prioritise requests from farmers for short-term variations to abstraction licence conditions where water supplies are under pressure.

Depending on local conditions, existing regulatory flexibilities can include:

extending abstraction seasons
allowing earlier reservoir refilling
trading water rights between licence holders
joining licences 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 allow.

Existing environmental protections and hands-off flow restrictions remain in place, however, and requests will continue to be assessed for their potential impact on the environment and other water users.

Farmers with abstraction licences who are concerned about water availability are being encouraged to contact the Environment Agency as early as possible.

From September, the Environment Agency is also expected to simplify the application process for long-duration abstraction licences for reservoirs, with the aim of giving farmers greater certainty when investing in water storage.

Wildfire risk

The exceptionally dry conditions have also resulted in an unprecedented number of wildfires across the country this year, prompting a wider Government response.

Alongside the drought measures for farming, the Government has announced additional support for fire and rescue services and measures intended to reduce the risk of further fires.

Farmers and land managers should remain particularly aware of the risk of fire during periods of prolonged dry weather. The temporary ELM adjustments include provisions for creating firebreaks on land within eligible environmental agreements where necessary.

What does this mean for Cluster members?

While recent rainfall may have provided some welcome relief, the pressures created by this year's prolonged dry weather have highlighted the importance of building greater resilience into farm businesses and the wider landscape.

For members, there are several practical points to consider:

If drought is affecting an existing environmental agreement, check whether one of the temporary adjustments applies before changing the management of agreement land. The detailed guidance sets out exactly which actions and options can be adjusted and the conditions that apply.

If you are considering SFI26, an additional £50 million has been allocated to Window 2, which is expected to open to all farmers in September. Now is a good time to familiarise yourself with the available actions and application requirements.

If water availability is becoming a constraint on your business, the reopening of the Water Management Grant this autumn may provide an opportunity to consider investment in on-farm water storage. Further details on eligibility and applications are expected from Defra ahead of the scheme opening.

If you hold an abstraction licence and are concerned about water supply, speak to the Environment Agency as early as possible about whether temporary regulatory flexibility could be available.

More broadly, this summer has again demonstrated how rapidly farming conditions can change. Building healthier soils, improving water retention and storage, managing water effectively across catchments and creating more resilient farming systems will become increasingly important as farms adapt to more frequent periods of extreme weather.

These are challenges that cannot always be addressed at individual farm level.

Collaboration across holdings and catchments has an important role to play in building resilience while continuing to support productive farming and environmental delivery.