Scotland’s 2026 Budget includes significant headline investment for farming and rural businesses. With £540 million committed to direct farm support and £170.5 million for Agri-environment and reform programmes, the figures appear positive.
However, in real terms, the rural affairs budget continues to face pressure. For many farming businesses, this means margins are likely to remain tight, despite overall funding levels.
Our agriculture team has highlighted four key areas every farming business should be aware of.
- Big Budget, Tight Reality
While the total level of support remains substantial, rising costs, labour pressures and ongoing market uncertainty mean many farms will continue to feel financial strain.
Although funding has been maintained in several areas, it does not fully offset the impact of inflation and increased operating expenses.
As a result, careful financial planning and cashflow management remain essential for farm businesses in 2026 and beyond.
- Investing in Future Farming
The Budget includes targeted investment to support modernisation and sustainability, including:
- £26 million for agricultural modernisation
- £1.3 million for regenerative and sustainable farming
- £4.4 million for crofting grants
These measures aim to help farms improve efficiency, reduce emissions and remain competitive in a changing industry.
For businesses considering upgrading equipment, investing in new systems or adapting their operations, this funding may provide valuable opportunities. However, accessing support often requires forward planning and clear financial forecasting.
- Nature and Land Use in Focus
Environmental and land reform policies continue to shape the future of agriculture.
This year’s Budget includes:
- £37.4 million for woodland creation
- £28 million for peatland restoration
- £7 million for the Scottish Land Fund
These investments bring farming more closely into Scotland’s environmental strategy, creating both opportunities and challenges.
For some businesses, this may open doors to diversification, carbon-related projects or land management schemes. For others, it may require adapting traditional practices to meet new expectations.
Understanding how environmental funding fits into your wider business strategy is becoming increasingly important.
- Tax Relief Won’t Reach Every Farm
Changes to income tax thresholds will provide some relief for lower- and mid-income workers in agriculture.
The Basic and Intermediate rate thresholds have increased to £16,538 and £29,527. However, Higher and Advanced thresholds remain unchanged.
This means many farm owners and diversified agri-businesses with higher or variable profits are unlikely to see significant benefit.
For businesses with fluctuating income, tax planning and profit structuring will continue to play a key role in protecting long-term financial stability.
What Does This Mean for Your Business?
Every farm is different, and the impact of the Budget will vary depending on size, structure, income streams and long-term plans.
While there are opportunities for investment and development, many businesses will still face ongoing financial pressure.
Taking time to review your position, explore available support and plan ahead can make a real difference.
Our agriculture team is here to help you understand what these changes mean for your business and how to respond with confidence.
If you’d like to discuss your situation, please get in touch.