The Water Innovation Fund has today launched the Agri-Water Cross Sector Challenge, which will award up to £8 million to collaborative innovation partnerships in England and Wales that bridge agriculture and water.
The challenge aims to accelerate solutions with the potential to scale for a healthier, more resilient water system, bringing together partners from across sectors to tackle shared challenges facing farmers and the agricultural sector.
Water is fundamental to food production, rural livelihoods and healthy biodiverse landscapes but as its availability becomes more pressured and the need to protect water quality grows, farmers and land managers face increasing challenges to adapt their practices. Working with agriculture offers a major opportunity to improve how water is stored, managed and protected across the wider water system.
Prolonged hot, dry spells and summer droughts are exposing the natural environment to fire, soil degradation, and heat stress. Agricultural runoff can cut crop yields and increase costs for farmers, and the nitrogen and phosphorus compounds it carries into rivers and lakes encourage algal blooms that damage ecosystems and pose risks to human and animal health. These are complex and urgent challenges that vary across every farm type and region, and no single organization or sector has all the knowledge, relationships or capacity needed to solve them alone.
Agriculture sits in a unique position as both a primary user of water and a key steward of the water system. The people and communities working with the land every day understand exactly where the pressures are felt and what can work in practice, while water and environmental partners can bring data, technical expertise, investment and routes to wider adoption.
Seeking Solutions with Scalability
The Agri-Water Cross-Sector Challenge is therefore calling for solutions that draw on this practical knowledge and have the potential to scale. Potential solutions could include, but are not limited to:
- Physical interventions: On-the-ground infrastructure and land-based solutions that create replicable frameworks for how to directly improve water storage, quality or resilience.
- Monitoring, evidence and data tools: This could include tools to turn field-level environmental data into actionable insights that lower farm costs, to monitor and restore the health of the water environment on agricultural land, or to build the evidence base to make the scaling of such tools viable.
- Market and allocation mechanisms: The commercial, regulatory and governance structures (e.g. trading, crediting, shared licensing) that make cross-sector collaboration and adoption possible at scale.
Up to £8 million is available, with the winners to be announced in spring 2027. Awards of £200,000 to £2 million will support proven, mature to mid-stage innovations, helping solutions accelerate, scale or move into real-world deployment.
Dr Jo Jolly, Director for Natural Assets, Environment and Innovation, Ofwat, said:
“Farmers and land managers know their land better than anyone. They see the pressures on water first-hand, from drought and changing rainfall, to the challenge of protecting water quality and safeguarding soil health. Promising solutions already exist, but are often small-scale, bespoke or blocked from growing. The Agri-Water Cross-Sector Challenge is designed to scale this fragmented patchwork of innovation to have nationwide impact. This challenge will bring the practical experience of farmers and landowners together with expertise, technology and investment from across the water sector and beyond, helping proven ideas grow and making it easier for solutions to be adopted and scaled.” Projects must deliver clear benefits for both agriculture and the wider water environment, address regulatory and operational barriers, and demonstrate a credible pathway to scale across regions, catchments and agricultural settings. Successful teams will need to show how people from agriculture and other sectors with a connection to the water ecosystem are working together, how solutions can be scaled and implemented, and how learning will be shared so that others can follow.
Building a Cross-Sector Network for Innovation
By working more closely with other sectors, the water industry can build stronger cross-sector partnerships to identify and unlock more effective points for intervention.
These partnerships could bring together farmers and growers, landowners, water companies, catchment and environmental organizations, regulators, researchers, technology providers, food and drink businesses, investors and supply-chain partners. A webinar for prospective entrants will take place on 17 November 2026 to cover the selection criteria and opportunities for cross-sector partnership.
Successful applicants will benefit from the Cross-Sector Water Innovation Network, which brings together organizations from across water, agriculture, industry, regulation and investment to tackle shared water challenges. Successful projects will be able to draw on the network for knowledge exchange, partner matching, and shared learning.
Agriculture Innovation for Water in Action
The Water Innovation Fund is a key pillar in Ofwat’s mission to drive innovation that ensures that the sector is meeting the challenges faced across the water system. Since 2020, the Fund has awarded £251 million to 156 projects involving 354 partners, with 65% of funding going to universities, charities, technology companies, engineering firms and wider business.
The Agri-Water Challenge builds on the established relationships between water companies, farmers and land managers, extending collaboration to a wider range of partners and shared water challenges.
Water Net Gain, one of the winners of Water Breakthrough Challenge 3, is testing smart on-farm ponds that capture water when it is plentiful for use by farms or release to rivers when water is scarce, bringing together water companies, Rivers Trusts, farmers, regulators, researchers and technology partners.
Lucia Grimm from Westcountry Rivers Trust, a partner of the Water Net Gain project, said:
“In the Westcountry we have all the water we need, just not when and where we need it. Water Net Gain is exploring the development of a network of smart on-farm ponds that save winter rainfall for summer. This could benefit farmers, water companies and the environment by reducing mains water demand, keeping more water in rivers while producing more sustainable food. Water Innovation Fund funding has enabled us to build our demonstration pond and test the concept in a cross-sector environment with farmers and water company stakeholders. If proven, these networks could help the water and farming industries work together to manage water better, whatever the weather.”
PEDAL, one of the winners of Water Breakthrough Challenge 5, aims to forecast and detect algal blooms in lakes and reservoirs before they take hold, protecting nature, reducing water treatment costs and keeping water safe and affordable. This summer the project mobilized its first group of citizen science volunteers, using smartphone cameras to measure the color changes of water in lakes in the South West.
Diego Panici, Project Lead, PEDAL (one of the winners of the fifth Water Breakthrough Challenge):
“Harmful Algal Blooms (HABs) in reservoirs regularly cause problems for water companies, their customers, and the environment by increasing treatment costs and contributing to environmental degradation. The PEDAL project aims to tackle these issues by creating a digital twin to detect and predict HABs through short- and medium-term forecasting.
“The Water Innovation Fund has turned this idea into reality, enabling us to bring together a diverse consortium of partners and the building blocks required to generate operational insight into water quality at reservoirs, including satellite observations, volunteer- and drone-based observations, and high-frequency measurements on buoys.”
How to Enter
The Agri-Water Cross-Sector Challenge is delivered by Challenge Works (part of Nesta), in partnership with Arup and Isle, and funded by the Water Innovation Fund, and is part of the Water Innovation Cross-Sector Programme, a five-year, £40 million Ofwat initiative designed to unite industries to foster a water-conscious community, driving collaborative innovation to deliver long-term, system-wide resilience.