Scotland's Land Use Strategy: annual progress report – 2025-2026

Funding

Agri-Environment Scheme

Since the Agri-Environment Climate Scheme (AECS) was launched in 2015, around £350 million has been committed to support more than 3,400 businesses across Scotland. A further £5 million has been committed to over 200 contracts from the 2025 AECS round, bringing total AECS commitments for 2026 to £25.6 million.

Supports: Enclosed farmland and Semi-natural land

Knowledge Transfer and Innovation Fund (KTIF) Grants awarded

Knowledge transfer and innovation are critical components in supporting skill gaps in the agricultural sector and delivering innovation through on-the-ground improvements. The KTIF supports projects in agricultural competitiveness, resource efficiency, environmental performance and sustainability.

A £900,000 budget for KTIF was secured for 2025/26. £142,000 was committed to ongoing multi-year KTIF projects, and approximately £758,000 was made available for new KTIF projects in 2025/26. Six new projects were subsequently awarded £554,000 (with approximately £253,000 allocated for 2025/26, and £301,000 agreed in principle for 2026/27).

Supports: All landscapes

Skills

We provided over £280,000 of funding for the Next Generation Practical Training Fund and £372,823 for the Land-Based Pre-apprenticeship Programme – both of which were co-designed by the agricultural sector, with the NFUS being a main contributor – providing meaningful capacity building in the rural workforce.

Supports: All landscapes

Future Farm Investment Scheme

In July, the Scottish Government launched the £14 million Future Farm Investment Scheme, which provides upfront payments of up to £20,000 at a 100% grant rate. This gives farmers the flexibility to choose the most appropriate capital investments for their businesses.

Supports: Enclosed farmland and Semi-natural land

Fruit and Vegetables Aid Scheme

The Fruit and Vegetables Aid Scheme in Scotland has provided £6 million in support over the last two years. We will continue to work with our stakeholders to ensure the long-term success of the scheme.

Supports: Enclosed farmland

Small Producers Support

This year we have recognised the importance of small producers by providing financial support. This included £500,000 worth of capital funding through the Small Producers Pilot Scheme and up to £200,000 worth of resource funding to be made available through the Small Producers Practical Training Fund. This will support small producers and crofters entering the agricultural sector through hands-on training in farming, alongside essential skills in business, sustainability, and health and safety.

An additional £55,000 in funding was given to the Small Producers Info Hub to support ongoing website maintenance. Funded by the Scottish Government and developed by Nourish Scotland and piloted with small producers, the Hub was identified by the Small Producers Pilot Fund Steering Group as a key solution. It offers an accessible, one-stop shop for small producers to find the information they need to manage and grow their businesses.

We also provided £55,000 to support the Scottish Smallholder Festival. This is a unique event showcasing livestock, rural skills and handcraft competitions. It offers education, demonstrations and inspiration for both new entrants to agriculture and experienced smallholders looking to expand their knowledge.

Supports: All landscapes

Regional Food Fund

Funding of £100,000 was made available by the Scottish Government with a contribution from Scotland Food and Drink, for the sixth round of the Scotland Food and Drink Partnership’s Regional Food Fund.

Grants of up to £5,000 were available to Scottish food businesses for projects aimed at elevating Scotland’s food and drink industry, enhancing food tourism and showcasing the best local produce the country has to offer.

Since 2021, the Scottish Government has provided around £600,000 to the fund, which has supported 116 collaborative projects, varying from creative artwork to increase customer numbers, new equipment and regional marketing campaigns.

Supports: All landscapes

Crofting

To ensure the sustainability of our rural and island communities, the Scottish Government approves and provides crofting businesses with over £40 million each year, through various support mechanisms including the Croft House Grant, Crofting Agricultural Grant Scheme (CAGS), Cattle Improvement Scheme, Less-Favoured Area Support Scheme, FFIS, Forestry Grant Scheme and AECS.

In 2025, 24 crofters and their families received funding of almost £660,000 from the Croft House Grant scheme towards the costs of house improvements and new houses. Of those awarded funding, 17 were island-based crofters and 12 of the grants were for the construction of new homes.

The CAGS provides grants towards the costs of a diverse range of agricultural operations. The CAGS is designed to aid and develop agricultural production on croft businesses, thereby supporting the economic basis of crofting and helping to retain people in rural and island communities. The funding also supports collective investments on common grazing land. In 2025/26 a total of over £3.2 million was paid out, helping 572 crofters with their businesses.

Together these schemes allow crofters to maximise the full potential of their crofts, generate economic activity and live and work in rural and island crofting areas, thereby protecting the crofting system for future generations.

Supports: Semi-natural land and Enclosed farmland

Basic Payment Scheme and Greening

Support payments of almost £415 million were made to Scottish farmers and crofters in 2025 though Basic Payment Scheme (BPS) and Greening funding.

The BPS supplements agriculture income, while Greening payments encourage agricultural practices that benefit the environment and climate. 16,756 businesses received payments to help support a resilient and stable agricultural sector to ensure our food security.

Supports: All landscapes

Forestry

We provided an additional £1 million in forestry grants to help farmers and crofters to create more small-scale woodland projects of up to 20 hectares and integrate trees into their business plans.

Following extensive collaboration with Scottish Forestry and a wide range of partners from across the forestry, conservation and rural sectors, Forest Research published a new list of future productive tree species. The list includes a diverse mix of species that have been carefully selected to help ensure our forests and woodlands are able to cope with climate change whilst continuing to provide multiple economic, environmental and social benefits in the future.

Supports: All landscapes

Peatland

In the 2025 Programme for Government we committed to restore at least 12,000 hectares of peatland supported by £35.5m of public funding.

Scotland’s Peatland ACTION partnership has put 15,448 hectares of degraded peatlands on the road to recovery in the last year, helping to reduce carbon emissions, increase biodiversity and make our landscapes more resilient to the damaging effects of climate change.

The 2026 Scottish Spending Review provides spending plans for the next three years for resource, with an additional year for capital. Over the next four years, to take us towards our 2040 ambition, we will invest £110 million in peatland restoration.

Supports: Enclosed farmland and Semi-natural land

Nature Restoration Fund

The Scottish Government’s Nature Restoration Fund (NRF) supports projects to help tackle the nature-climate crises, working to restore Scotland’s biodiversity and increase resilience to climate change, while improving the health and wellbeing of local communities.

Since its launch in 2021, it has awarded over £65 million to more than 300 projects. Throughout 2025/26 over £6 million was awarded to around 25 projects to help reverse nature loss and tackle the impacts of climate change across the country.

Supports: All landscapes