Scottish farmers and crop traders are once again facing flat funding after the Scottish Government sets out its 2026-27 Budget, with industry groups warning that support has not kept up with rising costs.
NFU Scotland said the budget largely maintained existing levels of direct support, providing short-term certainty for producers but little long-term security.
Andrew Connon, chairman of NFU Scotland, said: “The Scottish Government has tabled a budget that will effectively smooth out vital direct support payments. This will provide some certainty and security.”
But he said the settlement falls short of what the industry needs. “Scotland’s farmers and crop traders deserve a budget that recognizes their essential role in providing quality food, climate and natural outcomes, and supporting rural communities,” he said.
The Scottish Government has confirmed more than £660 million of support to farmers, crop traders, land managers and rural communities. Of this, £540m has been allocated to direct support schemes.
A further £170.5m will go towards key programs such as the Agri-Environment and Climate Plan and the Agricultural Reform Programme, along with £26m for the Agricultural Modernization Fund.
Additional funding includes £4.4 million for crop farming grants and £1.3 million for skills development in regenerative and sustainable agriculture.
NFU Scotland welcomed the return of £26m of modernization funding, but warned that flat cash payments across schemes such as basic payment schemes, greening, support for poorer areas and voluntary combination support amounted to reductions in real conditions.
As input costs continue to rise, the union said fixed budgets reduce the value of support available to farmers year on year. It also said the modest increase in agri-environment funding did not reflect the scale of investment needed to meet climate and nature ambitions.
NFU Scotland confirmed that the Budget sets out spending plans for agricultural support to 2028-29, following the UK Government’s Spending Review, and said it welcomed this long-term outlook.
Mr Connon said: “Agriculture and crops are long-term industries. Without stable, multi-year investment frameworks, food security, climate, nature and rural livelihoods will be much harder to achieve.”
The union said it would continue to push for multi-year funding enhancements, protection of the farm support budget, full implementation of the capital regime, practical regulation and continued commitment to UK-wide tax reform affecting family farming.
Scottish Land and Estates echoed these concerns across the rural economy, saying the Budget provides little confidence for rural businesses who are being asked to invest and adapt.
Stephen Young, director of policy at Scottish Land and Estates, said: “Scotland’s local businesses appear to have little to look forward to in this Budget, as the portfolio of local businesses faces another round of real cuts.”
He said some measures only provide short-term relief. He said: “While the Scottish Government has taken some measures regarding domestic and international rates, these measures are just a band-aid on a system that is widely acknowledged to be broken.”
Mr Young warned that even with the proposed relief measures, many local businesses could still face higher costs and increased uncertainty, which would likely discourage investment in the short to medium term.
He said it was positive that Pillar 1 farm payments remained broadly flat and welcomed the £26 million to the Agriculture Modernization Fund, but stressed that meaningful engagement with industry was needed to ensure this funding delivered tangible results.
Scottish Land & Estates also welcomed the increase in funding for forestry grants, peatland restoration and nature recovery funds, saying the £26 million allocation for nature recovery was an encouraging step.
The organizations said the coming months will be critical in determining whether budget commitments translate into meaningful support for agriculture, land management and rural businesses on the ground.
