Welcome to the April 2026 edition of AgriFacts. Spring has arrived marking a particularly busy time for farming operations. The agricultural industry continues to grapple with the ongoing geopolitical impacts of the war, which is evident across grain prices, fertiliser and diesel availability, among other areas.
This issue features an update on Defra’s schemes. We are still awaiting further details regarding the items that will be included in the Capital Grants 2026 offer, anticipated for release in May. If you would like to receive the latest information directly in your inbox, please provide your email address so it can be added to our agribusiness mailing list.
We are keen to ensure that AgriFacts remains both interesting and beneficial to you. Your feedback on the content is highly valued, and we would welcome any suggestions for topics, whether one-off pieces or regular features. Please send all suggestions to agrifacts@fishergerman.co.uk
April 2026
Defra‘s Land Use Framework: What could it mean?
Defra has published its Land Use Framework (LUF), setting out a national approach to managing England’s finite land. It aims to balance food production with housing, climate action, renewable energy and nature recovery. Although it is not a formal planning instrument, farmers will judge it on whether it supports practical decisions, encourages investment and reduces complexity.
Around 70% of England is agricultural, so land managers are central to delivery. Defra’s modelling to 2030 and 2050 suggests incremental change, including land moving to urban development (about 1%), renewables (about 2%) and climate and nature outcomes (about 6%). A further 4% is expected to stay
primarily in food production while also delivering environmental benefits. The key theme is “multifunctionality”, with more than one outcome from the same hectare, supported by better targeting and data.
Food security remains a stated priority. The LUF assumes overall production can be maintained even if some land use changes, provided productivity improves and decisions are guided by reliable information. That matters, because delivering efficiency gains is harder when input costs are volatile and farm businesses are under pressure.
The Framework is built on four principles: multifunctionality; right-use, right-place; future-ready decisions; and adaptive-by-design. The test will be how these translate into incentives, advice and planning decisions. If the LUF is seen as restricting locally informed choices, it risks denting confidence. If it cuts bureaucracy, attracts private funding and provides consistent signals, it could help unlock investment.
Practical changes are expected soon. By spring 2026, a National Soil Map is due to provide detailed soils data for England and Wales. A new predictive Agricultural Land Classification map is planned, alongside a wider review of the ALC system by 2028. From 2027, Sustainable Farming Incentive options are expected to become more spatially targeted, potentially with higher payments or bespoke offers in priority areas. Defra also wants to grow private finance for land-use change and increase transparency, including spatial landownership data for larger estates.
Overall, the LUF is meant to steer better land-use decisions, not replace the planning system. Its value will depend on implementation, especially whether it gives land managers clarity and flexibility while recognising market volatility and rising costs. Farmers and landowners should watch the rollout closely and look for where it changes incentives, data and decision-making on the ground.
Understanding Contract Farm Agreements
What is a Contract Farming Agreement?
A Contract Farming Agreement is a form of joint venture between two parties:
• The farmer (landowner)
• The contractor (who carries out the farming operations)
Under a CFA, the contractor is responsible for managing and carrying out the farming operations. In return, they receive a basic contract fee plus a profit share.
The farmer provides the land, working capital, and any buildings needed for the operation, such as grain storage.
How the finances work
Most CFAs operate through a dedicated bank account, often called an N02 account, although some farmers choose to use an existing account instead.
This account is used to:
• Pay for all crop inputs, including seed, fertiliser, sprays, lime, agronomy, drying and storage, pest control, water rates, crop assurance and insurance
• Cover repairs relevant to the agreement (for example drainage work), professional fees and finance costs
• Receive all crop sale income and any agreed environmental payments
All purchases and crop sales are made in the farmer’s name, and all crops and stock remain owned by the farmer.
Contract fees, prior charges and profits
The contractor receives a basic contract fee, which is lower than the true cost of doing the work. The farmer also receives a prior charge, recognising the value of providing the land, buildings and opportunity to farm.
Once the harvest is complete and all crop sales have been received, full accounts for the cropping year are prepared, usually the following spring or summer. Any remaining profit is known as the divisible surplus, which is then shared between the farmer and the contractor via a tiering system.
A typical CFA profit-sharing structure might look like this:
• Contract fee: £115–£130 per acre
• Prior charge: £40–£80 per acre
Divisible surplus split:
• First £0–£60 per acre: 75% contractor / 25% farmer
• Above £60 per acre: 50% contractor / 50% farmer
Exact terms vary depending on land type, crop choices, yield potential and available buildings.
How CFAs are changing?
CFAs have evolved significantly in recent years. In the past, higher subsidy levels meant lower prior charges, with Basic Payment Scheme (BPS) and stewardship payments often kept outside the agreement to boost the farmer’s return. Contractors sometimes received small top-up payments to ensure cross compliance is adhered to.
With the move towards the Sustainable Farming Incentive (SFI), more payments are now directly linked to cropping decisions, such as reduced insecticide use. Because these options can affect yields or require additional management, they are increasingly included within CFAs and shared fairly between both parties.
With the rapid phasing out of the BPS, new agreements are now being structured with a higher prior charge to account for the reduced subsidy but also to account for farmers introduction of SFI into the agreement for those that have an SFI agreement
The addition of a fuel multiplier as a top up to the basic contracting fee, to provide support to the contractor in times of high fuel prices.
More flexibility to remove land from agreements up to an agreed percentage of the total area, for potentially higher paying specialist crop rents such as Maize or Potatoes in the form of a cropping licence.
Benefits for the farmer
For landowners, CFAs offer several advantages:
• Contractors are motivated to maximise output and efficiency, rather than carrying out unnecessary operations
• The farmer is clearly seen as taking business risk and actively trading, which is important for Business Property Relief (BPR) on inheritance tax
• Regular management meetings (typically three or four per year) provide clear evidence of farmer involvement and decision-making
Benefits for the contractor
Contractors also gain significant benefits:
• The opportunity to earn higher returns in good years through profit sharing
• A way to expand the business without having to fund working capital, unlike a tenancy where rent and input costs are paid long before crops are sold
Grain market prices
April 2026 (Midlands) ex farm
Market outlook
The geopolitical situation between the USA and Iran, as well as the continued unrest in Ukraine, makes grain markets highly changeable, while global weather influences also contribute significantly to market volatility. These factors, alongside shifts in energy and shipping costs, have created a landscape where market sentiment can swing rapidly, reflecting the uncertainty that pervades the sector.
Grains
In the grains sector, the USDA’s recent World Agricultural Supply and Demand Estimates confirm that global stocks remain ample, leading to a neutral or somewhat bearish market sentiment.
Drought concerns in parts of the US had been underpinning prices in recent weeks. However, storms across eastern Kansas and Oklahoma brought beneficial rainfall to winter wheat areas last week, which is expected to see early maize plantings go well and planting is now underway.
Geopolitical tensions, particularly between the US and Iran, continue to cast a shadow over grain markets. The ongoing risk of disruption in the Strait of Hormuz remains a critical concern, as any escalation could impact shipping routes and energy costs. Although a short ceasefire recently eased immediate anxieties, the situation remains fluid. For grain markets, direct supply chain disruption is less likely; however, indirect effects through higher energy prices, shipping costs, and shifts in global market sentiment could have a pronounced impact.
Oilseeds
The oilseed market continues to be driven by the volatility of crude oil prices. Recent ceasefire announcements in the Middle East triggered a sharp fall in crude oil, though prices remain more than 30% above late-February levels. This has a knock-on effect on input costs and transport, further influencing oilseed market dynamics. Additionally, competition from global harvests and fluctuations in export demand present ongoing challenges and opportunities for UK producers.
Fertiliser
Fertiliser prices, while broadly stable week-on-week, are still around 30% higher than pre-conflict levels. Granular urea (46% N) has risen nearly 39% compared to February averages, now at £631/t, with week-on-week increases for potash, phosphate, and polysulphate also noted. Elevated input costs remain a significant challenge for arable producers, potentially influencing planting decisions and crop margins.
The current market presents several opportunities for agile producers. Those able to respond quickly to export demand may be able to capitalise on short-term price movements. Furthermore, the ongoing focus on food security and supply chain resilience, particularly in Europe, could open new markets for locally sourced grain and oilseeds. Producers must stay informed and flexible, leveraging market intelligence and strategic planning to navigate this year’s crop sales and considerations for 2027 planting.
Schemes update
Capital Grants 2026
£225 million will be available to support farmers, land managers and rural businesses drive environmental improvements across England.
When the scheme opens in July, you will be able to apply for funding for a range of items, from hedgerow and tree planting to works that improve water quality.
While the final list of eligible items has yet to be finalised, you can expect full details and guidance in May, just in time to get your application submitted.
As before, the items will be grouped to help you find what you need:
• Boundaries, trees and orchards
• Water quality
• Air quality
• Natural flood management
• Assessments
• Improvements Funding limits remain in place for four out of the 6 groups:
• £25,000 for the water quality, air quality, and natural flood management groups
• £35,000 for the boundaries, trees and orchards group
• You can mix and match items from these groups up to the funding limits, plus add items from the assessments or improvements group to your application
• As with last year, each Single Business Identifier (SBI) can submit one application
Demand for last year’s offer was very high, and we expect the same again this year.
Get ready to apply - This year, the process will emphasise upfront evidence. You’ll likely need to submit maps and photos with your application, so start preparing early and aim to submit promptly to avoid missing out on funding.
Find out more here.
Farming Equipment Technology Fund (FETF)
FETF opened 17 March 2026 and will closes midday 28 April 2026.
A total of £50 million will be available to farmers, growers, foresters and their contractors to invest in equipment and technology.
The funding is divided into three key themes:
• £20 million for farm productivity
• £20 million for animal health and welfare
• £10 million for slurry management
Choose from 290 approved items and apply for grants to cover a portion of the cost, whether you’re looking to modernise your operation or boost efficiency.
Grants range from £1,000 to £25,000 per theme, and you can apply across multiple themes up to a maximum total of £75,000.
Reimbursement is based on a percentage of the item’s cost, with the exact figure depending on your choice, giving you flexibility to tailor investment to your needs.
Find out more here.
SFI 2026
The number of available actions has been reduced from 102 to 71, making it easier to find what suits your farm best. For the full list, including payments rates, where DEFRA has released them, simply click the link below - we have also highlighted any actions in place for added clarity.
Two application windows - Window 1 opens in June 2026 for about 2 months, exact timing will depend on demand, targeting small farms (up to 50 ha) or those without an existing ELM agreement. Window 2 opens in September 2026 for all farms.
Agreement Limits - £100,000 cap applies, with just one agreement per farm.
In your first year, you can’t boost the area or value of rotational options, though you’re free to move them to match your crop rotation. Each year, your area can go up or down, but never beyond what you started with. Plus, for AHW7 (overwinter stubble), there’s a 25% limit on the area.
Payment rates - The latest rates have now been published, and you will find everything we know so far using the link below.
Action duration - Actions previously running for 5 years will now be completed in just under 3 years under the new SFI26.
Find out more here.
Lincolnshire Farming Conference
Our agribusiness team, Samantha Allen and Rachel Cornthwaite, attended this year’s Lincolnshire Farming Conference at the Lincoln Showground.
As ever, the event was both valuable and thought provoking, with the theme of resilience particularly resonant throughout the day. There were candid discussions about the challenges facing farming families, alongside a wealth of practical suggestions for how the sector might adapt in the coming years.
Victoria Atkins MP delivered one of the conference’s most memorable addresses, speaking frankly about the financial pressures currently impacting many businesses, especially in light of recent changes to inheritance tax. She also highlighted the emotional toll these issues are taking on farming families. Nonetheless, she remarked on the enduring optimism among farmers, noting that with appropriate support and clear policy direction, British agriculture has the potential to move forward with confidence.
To concluded proceedings, Minette Batters gave a compelling overview of her independent Farm Profitability Review. She stressed the importance of a unified national strategy, advocating for the out of home food sector to uphold supermarket standards, enhanced Union Jack branding, and the formal recognition of natural capital as a legitimate income stream. Her recommendations centred on bolstering active farmers, increasing transparency around input costs, relaxing planning constraints, and reinforcing commitments to British sourcing.
All in all, the conference proved to be both insightful and inspiring, leaving us with plenty to consider as we continue to guide clients through a rapidly evolving policy environment.
AgriFunFact answer!
The answer is B - the Sagrada Familia in Barcelona is the world’s tallest church, and it is still getting taller!
