Farm funding loses 27% of buying power, NFU Scotland warns

Scottish agricultural support has lost around 27 per cent of its buying power since 2014, prompting calls for an additional £183 million in government funding to protect farmers and crofters.

NFU Scotland is urging ministers to increase the annual agricultural support settlement from around £677 million to £860 million in the 2027–28 Budget.

The union warns that rising costs for fuel, fertiliser, machinery and labour have significantly eroded the value of existing support, placing growing financial pressure on farming businesses.

It wants the next Budget to establish a higher funding baseline, with agricultural support protected against inflation through to 2030 and beyond.

NFU Scotland argues that greater investment is essential to maintain domestic food production, strengthen food security and enable farmers to meet environmental and climate commitments.

Union President Andrew Connon said: “Those are legitimate expectations, but they cannot be delivered on ambition alone. They require viable agricultural businesses, confidence to invest and a properly funded support system.”

According to the union's analysis, agricultural inflation has reduced the purchasing power of the current indicative £677 million settlement by approximately 27 per cent compared with 2014.

NFU Scotland believes simply maintaining existing funding levels would leave farmers and crofters increasingly exposed to rising costs.

The union is also backing the Scottish Government's commitment to deliver at least 70 per cent of agricultural support through direct payments under Tiers 1 and 2 of its future four-tier support framework.

It argues that these payments must provide a stable financial foundation for active farming and crofting, allowing businesses to invest in productivity, resilience and environmental improvements.

Scottish agriculture generates around £5.1 billion in gross output annually and underpins a wider food and drink industry worth approximately £19 billion.

The union says agricultural support should therefore be recognised as an investment in jobs, food production, supply chains and rural communities.

While welcoming the Scottish Government's Rural Support Plan, NFU Scotland has warned that long-term certainty must extend beyond maintaining existing cash allocations.

Mr Connon said: “We welcome the greater visibility that provides, but certainty cannot mean knowing that the cash figure will stay the same while its real value continues to fall.”

Alongside increased direct payments, NFU Scotland is calling for improved rounds of the Future Farming Investment Scheme and Food and Drink Processing Scheme Scotland from 2027.

The union wants dedicated budgets for both programmes throughout the Rural Support Plan period to help agricultural and food businesses invest in productivity, resilience and future growth.

It is also seeking a ring-fenced, multi-annual funding settlement that protects agricultural support against inflation through to 2030 and beyond.

NFU Scotland maintains that greater financial certainty is essential if farmers and crofters are to invest in food production, environmental improvements and the long-term future of rural communities.

Mr Connon concluded: “If Scotland expects more from its farmers and crofters, it must be prepared to invest in what they can deliver.”