It has been an incredibly challenging year for farmers across England. Following the driest July on record and the third drought in five years, the government has announced a £65 million support package through DEFRA to help farm businesses manage the immediate pressures of drought and build longer-term resilience.

We wanted to share the details here to make sure our farming clients, friends and connections across Cheshire and beyond are aware of what’s available. Please feel free to share this with anyone in farming who might find it useful – the more people who know, the better.

What’s included in the package

  • £50 million added to the Sustainable Farming Incentive (SFI) 2026, taking its total budget to £290 million, to help more farmers access support.
  • Up to £15 million for building on-farm reservoirs, helping farms store water and become more resilient to future dry periods.
  • Updated planning guidance intended to reduce barriers to building on-farm reservoirs, with further detail expected as part of the National Planning Policy Framework.
  • Improved access to water during drought, with the Environment Agency prioritising short-term variations to abstraction licences and simplifying longer-term access arrangements.
  • Greater flexibility within environmental land management (ELM) agreements, including allowing some protected habitat land to be used for grazing or feed where needed, without breaching agreement terms.

Why it matters

Around three-quarters of England has been in drought this summer, with many farms facing poor yields, early harvests, restricted water access and livestock producers dipping into winter feed reserves early.

The National Farmers’ Union and other industry bodies have welcomed the package as an important step, while also being clear that it won’t solve every immediate cashflow pressure farm businesses are facing.

For many, the SFI flexibility and reservoir funding will help with resilience going forward, but the current season’s challenges remain very real.

What you can do

If you’re a farm business owner, it may be worth:

  • Reviewing whether you’re eligible for the additional SFI 2026 funding or flexibility within your existing agreement.
  • Considering whether on-farm water storage could form part of your resilience planning, and keeping an eye on the updated planning guidance.
  • Speaking to the Environment Agency if you’re affected by abstraction licence restrictions, as they are prioritising variation requests during this period.
  • Working with us to understand how this year’s conditions might affect cashflow, tax planning, or claims you’re entitled to.

Further reading

Farmers Weekly: [Drought package: what the £65m means for English farmers]
(https://www.fwi.co.uk/news/farm-policy/drought-package-what-the-65m-means-for-english-farmers)

FarmingUK: [Government unveils £65m package for drought-hit farmers]
(https://www.farminguk.com/news/government-unveils-65m-package-for-drought-hit-farmers_68984.html)

DEFRA Farming Blog: [New drought support for farmers]
(https://defrafarming.blog.gov.uk/2026/08/15/new-drought-support-for-farmers/)

Farmart Media: [£15m Government Funding Opens for On-Farm Reservoirs and Drought Resilience]
(https://farmartmedia.co.uk/news/15m-government-funding-opens-for-on-farm-reservoirs-and-drought-resilience/) – a good read if you’re weighing up reservoirs, drainage or wider water resilience on your farm.

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It’s been a genuinely tough year for farming, and we know many of our clients and their families are feeling the strain. If there’s anything we can do to help you think through the numbers, please do get in touch. In the meantime, please share this post with anyone in farming who might find it useful – we’re all better off supporting each other through periods like this.

Hall Livesey Brown are an Independent firm of Chartered Accountants who support their clients, including farming and agricultural business, from offices in Tarporley, Cheshire. Do get in touch on 01829 733333 or email us at info@hallliveseybrown.co.uk