Agricultural reform: environmental report - strategic environmental assessment

Chapter 4 Strategic Environmental Assessment findings

This chapter of the Environmental Report sets out the assessment findings and the significant environmental effects of the Agricultural Reform by Tier. The Agricultural Reform includes four tiers that will support delivery of its Vision. The assessment identifies effects in relation to each SEA objective arising directly from the Agricultural Reform and any effects, which would indirectly impact on the baseline environment.

Detailed assessment findings are presented within Appendix D.

Summary of assessment findings

Agriculture and Rural Communities Act objectives and Agricultural Reform strategic outcomes

The five objectives of the Act underpin the Agricultural Reform’s strategic outcomes framework. Uncertain significant positive effects are identified across SEA objectives 1: Biodiversity, flora and fauna, 2: Population and human health, 3a: Climate change mitigation, 3b: Climate change adaptation and 5: Soil. This reflects that the objectives of the Act and strategic outcomes of the Agricultural Reform prioritise the adoption of sustainable and regenerative agricultural practices, on-farm nature restoration climate mitigation and adaptation and objectives that support high-quality food and rural communities. The opportunities for change in agricultural policy to address challenges in these topic areas is significant, in the context of baseline environmental conditions. Long-term uncertain minor positive effects are also identified for SEA objectives 4: Air, 6: Water, 8: Landscape, seascape and townscape and 9: Material assets. The Act and Agricultural Reform outcomes will promote positive change for water quality, air quality, landscape character and resource efficiency.

These high-level strategic objectives and outcomes for agriculture will steer the direction of travel for future change brought about within the Agricultural Reform. Effects are generally expected in the medium to long-term, as the Agricultural Reform continues to develop and change in practice is embedded across the industry. However, timescales and magnitude of positive effects are dependent on the speed and scale of change, and the actual measures introduced by the emerging Agricultural Reform.

As such, all effects associated with the strategic vision and aspirations of the Act and Agricultural Reform remain uncertain and are subject to future measures introduced by the Agricultural Reform.

Tier 1 – Base

As set out in the Route Map, ministers have committed to allocating 70% of the Agricultural Reform budget to Tiers 1 and 2 (with 30% to Tiers 3 and 4). Between Tiers 1 and 2, Tier 1 (Base) is expected to receive the larger share. Agricultural Reform. Base payments are designed to be accessible to all farmers and crofters undertaking agricultural activity in Scotland who meet the minimum requirements, similar to pre-existing BPS payments. Therefore, most farmers and crofters are expected to participate in Tier 1 activities. Tier 1 measures outlined in the Agricultural Reform offer relatively limited positive environmental effects when compared against the activities outlined in other Tiers. However, the expected participation in Tier 1 (Base) activities means environmental effects will be experienced more widely across Scotland and result in some significant positive effects for some SEA topic areas. This includes 1: Biodiversity, flora and fauna, 3a: Climate change mitigation, 3b: Climate change adaptation and 5: Soil.

Whole Farm Plan

Pre-existing policy commitments under the Basic Payment Scheme (BPS), Cross Compliance (GAEC/SMRs) obligations, Greening Requirements and Preparing for Sustainable Farming (PSF) have provided income stability for farmers and crofters, supported soil protection, maintained landscape features, and encouraged animal health and welfare. Indirect positive effects, ranging from short to long term, are identified for pre-existing policy actions in relation to all SEA objectives except SEA objective 4: Air, which is negligible.

From 2025, actions under the Whole Farm Plan (WFP) build on existing efforts by embedding whole-farm monitoring and management actions. Overall, these actions are projected to strengthen positive effects to deliver direct significant positive effects for SEA objectives 1: Biodiversity, flora and fauna, and 5: Soil in the medium to long term as management plans take effect over successive years. Direct minor positive effects are strengthened for SEA objectives 3a: Climate change mitigation and 9: Material assets as the WFP integrates biodiversity, climate, and resource efficiency considerations into all aspects of farm management. Strengthened indirect minor positive effects are also expected for SEA objectives 2: Population and human health, 3b: Climate change adaptation, 4: Air, 6: Water, 7: Cultural heritage including architectural and archaeological heritage, and 8: Landscape, seascape and townscape. These effects are likely in the medium to long term as planning, monitoring, and management actions are implemented across farms and crofts.

Scottish Suckler Beef Support Scheme

Existing policy commitments under the pre-2025 suckler beef support scheme (SSBSS) provide payments per calf to support beef production. While the SSBSS supports beef production that is vital to the economic and social sustainability of crofting and other agricultural communities. This production, and the support that underpins it, is associated with greenhouse gas emissions due to the high emissions intensity of beef production. While these payments help maintain grazing patterns and open habitats, they are not designed to deliver targeted environmental outcomes. Baseline protections through Cross Compliance (GAEC) safeguard soils, water, and landscape features. In addition, support for beef production, especially in upland and remote areas benefits the viability of rural communities. Therefore, indirect minor positive effects are expected for SEA objectives 1: Biodiversity, flora and fauna, 2: Population and human health, 5: Soil, 6: Water, 7: Cultural heritage, and 8: Landscape, seascape and townscape. Minor positive effects are mixed with minor negative effects for some SEA objectives where the scheme supports higher stocking with potential grazing pressure, in the short to medium term. Significant negative effects are identified with regard to SEA objective 3a: climate mitigation associated with the high greenhouse gas emissions produced by suckler beef herds.

Future actions under the 2025 scheme introduce a 410-day calving interval requirement which encourage more efficient herd management, potentially improving animal health and reducing some veterinary inputs, supporting minor positive effects for SEA objectives 2: Population and human health and 5: Soil. However, concentrating calving could increase local grazing pressure, soil compaction, nutrient runoff, and risks to sensitive habitats, leading to indirect uncertain minor negative effects for SEA objectives 1: Biodiversity fauna and flora, 5: Soil, 6: Water, 7: Cultural heritage including architectural and archaeological heritage, and 8: Landscape, seascape and townscape. Although a reduced calving interval reduces greenhouse gas emissions from improved efficiency, these gains are minor and suckler beef herds maintain high greenhouse gas emissions, continuing direct significant negative effects for SEA objective 3a: Climate change mitigation and indirect minor negative effects for SEA objective 4: Air. Negligible effects are expected for SEA objective 3b: Climate adaptation. The policy continues the existing minor negative effect regarding SEA objective 9: Material assets, while adding some modest efficiency gains in slower herds in the short to medium term. Small herd derogation will safeguard support for small herds providing supportive positive for SEA objective 2: Population and human health, however the exemption means efficiency improvements for small-scale producers.

Cross compliance: new protections for peatlands and wetlands

GAEC 6 protects priority habitats by restricting drainage, cultivation, reseeding, and chemical inputs on peatlands and wetlands. Muirburn and stubble-burning controls reduce wildfire risk and smoke. These measures deliver direct mixed significant positive and minor negative effects for SEA objectives 1: Biodiversity, flora and fauna, 3a: Climate change mitigation, and 8: Landscape, seascape and townscape, with indirect minor positive effects for SEA objectives 2: Population and human health, 3b: Climate change adaptation, 4: Air, 5: Soils, 6: Water and 7: Cultural heritage including architectural and archaeological heritage.

The update to GAEC 6 strengthens peatland and wetland protection across all supported holdings, enhancing connectivity and restoration. Direct mixed significant positive and minor negative effects are maintained, with significant positive effects also expected for 3b: Climate adaption, 5: Soil and 6: Water in the medium to long term, due to broader coverage of protection, improvements in soil organic matter protection and water regulation and flood risk reduction. Indirect positive effects for SEA objectives 2: Population and human health, 4: Air, 7: Cultural heritage including architectural and archaeological heritage, and 8: Landscape, seascape and townscape are slightly stronger than before, supporting rural community resilience and cultural landscapes in the medium to long term, and air quality improvements in the short to medium term.

Scottish Upland Sheep Support Scheme

No changes have been introduced by the Agricultural Reform with regards to the Scottish Upland Sheep Support Scheme (SUSSS) which is anticipated to continue in 2025 and 2026. SUSSS maintains upland sheep grazing, supporting traditional land management, open habitats, and rural livelihoods. This results in ongoing indirect mixed minor positive and minor negative effects for SEA objectives 1: Biodiversity, flora and fauna, 5: Soil and 8: Landscape, seascape and townscape, minor positive effects for 2: Population and human health and 7: Cultural heritage, minor negative effects for 3a: Climate change mitigation, 3b: Climate adaptation, 4: Air and 6: Water in the short to medium term. Effects in relation to 9: Material assets are negligible.

Tier 2 – Enhanced

Enhanced (Tier 2) measures are more directly focused on delivering positive environmental outcomes, including potential new requirements for Ecological Focus Areas (EFAs) and permanent grasslands. This is a change currently under consideration, and the Scottish Government has indicated that they will review mandatory options for permanent grasslands going forward. Tier 2 has 30% of the 70% Agricultural Reform budget allocated across Tiers 1 and 2. It also seeks to be broad enough to allow all types of agricultural businesses to take part.

EFA changes

The existing EFA measures provide significant positive effects for SEA objective 1: Biodiversity, flora and fauna, benefiting habitats such as fallow land, hedgerows, and nitrogen-fixing crops supporting pollinators, farmland birds, and habitat connectivity. These also provide minor positive effects for the majority of the other SEA objectives, except for 2: Population and human health and 7: Cultural heritage including architectural and archaeological heritage, which are negligible.

The 2026 EFA changes expand coverage and improve habitat quality, carbon-storing and resilience-focused options. The most significant change is the removal of the 75% exemptions for Temporary Grassland (TGRS) and for grassland on claimed land from the arable/EFA calculation. As a result, around 2,300 additional farm businesses will be required to manage EFAs, extending the geographic spread and cumulative scale of measures across Scotland. This ensures that more land contributes to biodiversity enhancement, soil and water protection, carbon storage, and landscape quality. The increase in participating holdings delivers particularly strong positive effects for SEA objective 1: Biodiversity, flora and fauna by expanding the area of pollinator, bird and habitat-supporting features. This is mixed with a minor negative effect for biodiversity, as minor adverse effects may arise from earlier harvesting or chemical use. Effects are expected in the short to medium term as changes are introduced from 2026 and biodiversity benefits, such as increased habitat cover, can start to appear in the first season but will strengthen as features mature over several years. Air quality improvements, soil protection, water quality, landscape character, and cultural heritage provide minor positive effects that are modestly strengthened under the new rules. For SEA objective 9: Material assets, the exemption removal introduces a small additional constraint on production flexibility, but this is offset by efficiency and resilience gains from wider uptake of soil- and input-enhancing practices. A mixed minor positive and minor negative effect is therefore expected, with these effects likely to emerge in the medium to long term.

Progress from 5% to 7% EFA

The existing 5% EFA requirement delivers significant positive effects for 1: Biodiversity, fauna and flora. This provides habitats that improve connectivity and support a range of species. It also provides minor positive effects for the majority of the other SEA objectives by enhancing carbon storage, reducing erosion and runoff, filtering pollutants, and maintaining traditional farmland character. For 2: Population and human health, a negligible effect is expected.

Increasing coverage to 7% strengthens these effects slightly across all objectives, with the overall change considered modest but more impactful in intensively farmed areas. For material assets the policy continues to have mixed minor effects due to 7% of land unavailable for direct production. Effects are likely to emerge in the medium to long term after 2027 as new features are established.

Permanent grassland requirements

Current protections for permanent grasslands maintain over four million hectares of habitat, safeguarding biodiversity, soil, water, landscape, and cultural heritage. These measures deliver significant positive effects for 1: Biodiversity, fauna and flora and minor positive effects for 2. Population and human health, 3a: Climate mitigation, 3b: Climate adaptation, 5: Soil, 6: Water, 7: Cultural heritage including architectural and archaeological heritage, 8: Landscape, seascape and townscape. There are negligible effects for 4: Air and 9: Material assets.

The Scottish Government has indicated that it will review mandatory options for the management of permanent grassland going forward. One option under consideration is the introduction of mandatory management requirements from 2027 which could expand coverage to five million hectares and introduce consistent management practices. If implemented, this would be expected to strengthen all positive effects, particularly for 3a: Climate mitigation and 5: Soil, 6: Water where a significant effect is expected and 4: Air and 9: Material Assets, where a minor positive effect could be produced. Effects would likely emerge in the medium to long term as improvements from new management practices will take time to establish and deliver measurable outcomes.

Less Favoured Areas Support Scheme

No changes to the Less Favoured Areas Support Scheme (LFASS) are currently outlined in the Agricultural Reform. LFASS currently delivers indirect minor positive effects for 2. Population and human health, 7. Cultural heritage including architectural and archaeological heritage, and 8: Landscape, seascape and townscape through the continuation of low-intensity grazing and crofting practices, delivered in the short to medium term. Mixed minor positive and negative effects are identified for 1. Biodiversity, flora and fauna, 5: Soil, and 6: Water, reflecting local variations in grazing and environmental management. Effects on 3a: Climate mitigation, 3b: Climate adaptation, 4: Air, and 9: Material assets are negligible.

Tier 3

The actions within Elective (Tier 3) have the greatest potential for delivering positive environmental outcomes, as they are targeted actions focused on protecting habitats, delivering nature restoration, improving water quality, managing flood risk and offering opportunities for positive management of historic assets and landscapes. However, there is currently a ministerial commitment that only 30% of the Agricultural Reform budget is allocated to Tiers 3 and 4 and schemes within Tier 3 are optional and competitive, thereby limiting the scale of associated positive effects.

Improvements to the existing AECS

The existing AECS provides significant positive effects for SEA objectives 1: Biodiversity, flora and fauna, 3a: Climate change mitigation, 3b: Climate change adaptation, 5: Soil, and 6: Water, and minor positive effects for SEA objectives 2: Population and human health, 4: Air, 7: Cultural heritage including architectural and archaeological heritage, and 8: Landscape, seascape and townscape and 9: Material assets. Options promoting habitat management, species protection, peatland and carbon-rich soil management, sustainable nutrient application, and flood risk mitigation deliver significant positive effects for biodiversity, soil carbon storage, water, air and soil quality, emission reduction, climate resilience and prudent use of natural resources. Cultural and landscape benefits are delivered via options that maintain traditional land management practices, field boundaries, and landscape features.

If progressed, adjustments to AECS, including broader eligibility, reduced geographic targeting, and improved guidance, are expected to slightly strengthen these positive effects over the medium to long term. Minor negative effects may occur for 1: Biodiversity, flora and fauna due to amended stock disposal rules limited to designated sites. While the scheme has the potential to deliver extensive significant positive effects across most SEA topics, it remains a competitive scheme and therefore the change in effects are expected to be minor.

Future Farming Investment Scheme

The existing Agricultural Transformation Fund (ATF) delivers an ongoing positive effect for 3a: Climate change mitigation by directly funding measures that reduce major agricultural emissions such as methane and nitrous oxide. For 9: Material assets it also provides a significant positive effect by modernising farm infrastructure, improving efficiency, and supporting more circular use of resources. For SEA objectives 1: Biodiversity, flora and fauna, 5: Soil, 6: Water, 7: Cultural heritage, and 8: Landscape, the policy has mixed minor effects, with positives arising from reduced pollution, better management of soils and water, and improved farm viability, but small-scale negatives linked to construction, siting, and potential intensification risks. For 2: Population and human health and 4: Air, minor positive effects are expected through improved air quality, odour reduction, and greater community resilience. A minor positive effect is also expected for SEA objective 3b: Climate change adaptation, reflecting co-benefits such as more robust slurry and water management systems, though these are uneven across holdings. Overall, the ATF is most effective in tackling greenhouse gas emissions and resource use, with wider environmental and community benefits being modest and localised. Benefits mainly occur in the medium to long term as infrastructure is established and operated.

The new FFIS scheme expands support beyond the ATF to include habitat creation, soil and water protection, and resilience-focused infrastructure, while retaining investment in low-emission slurry and precision nutrient equipment. These changes are expected to result in a strengthened positive effect for 1: Biodiversity, flora and fauna in the medium to long term, as new planting and habitat measures strengthen ecological networks. Minor strengthening of positive effects is identified in the short to medium term for SEA objectives 3b: Climate change adaptation and 6: Water, and in the medium to long term for 5: Soil, as FFIS adds specific measures moving from incidental adaptation co-benefits to more purposeful actions on holdings. For 9: Material assets, the positive effect is weakened, as capped grant levels and a single application window limit sector-wide efficiency gains compared with the ATF baseline, resulting in a minor positive effect overall.

Forestry Grant Scheme

No changes to the existing Forestry Grant Scheme (FGS) are currently outlined in the Agricultural Reform Route Map. The FGS finances woodland creation and a wide range of management actions. It provides an ongoing mixed significant positive and minor negative effect for 1: Biodiversity, flora and fauna by supporting woodland establishment, species recovery and improved habitat connectivity although some localised negatives may happen due planting or site works. The schemes are expected to continue to provide significant positive effects for 3a: Climate mitigation and for 3b: Climate adaptation. Indirect minor positive effects are seen for 2: Population and human health, 4: Air, 5: Soil, 6: Water, 7. Cultural heritage including architectural and archaeological heritage and 8. Landscape, seascape and townscape associated with benefits delivered by woodland creation. A mixed minor negative and minor positive effect is expected for 9: Material Assets due to temporary disturbance during woodland establishment and resource use during infrastructure works. Effects remain unchanged as the Agricultural Reform does not introduce any change to the FGS. They are generally expected to be delivered the short, medium and long term, as woodland creation, management, and associated environmental benefits take time to establish.

Other targeted capital support

No changes to other existing targeted capital support schemes (i.e. Crofting Agricultural Grant Scheme (CAGS) and Food Processing, Marketing and Cooperation (FPMC)) are outlined in the Route Map. The targeted capital support schemes (CAGS and FPMC) are expected to continue to provide minor positive effects across most SEA objectives by supporting small-scale improvements to farm infrastructure, processing capacity, and croft resilience. For SEA objective 1: Biodiversity, fauna and flora, positive effects are minor, as shelter belts, fencing and crofting support can help maintain habitats and cultural landscapes, though benefits are localised and dependent on uptake. For 2: Population and human health, minor positive effects arise from sustaining rural jobs, embedding Fair Work First, and reducing odour or amenity issues where slurry infrastructure is improved. For 3a: Climate mitigation, 4: Air, and 5: Soil, minor positive effects are expected as investments cut emissions, improve soil protection, and support more efficient nutrient and resource use, though impacts are uncertain and limited to participating holdings. For 3b: Climate adaptation, CAGS provides resilience measures such as shelter belts and drainage, giving minor positive effects. For 6: Water and 8: Landscape, seascape and townscape, mixed minor positive and minor negative effects are expected, as infrastructure improvements can reduce diffuse pollution and reinforce landscape character, but drainage and new tracks or buildings may create localised risks or visual change. For 7: Cultural heritage, effects are negligible given strong planning controls. For 9: Material assets, minor positive effects are expected as new equipment, supply chain improvements and small-scale land investments promote efficiency and support more circular use of resources. Overall, benefits are small in scale and voluntary, with effects emerging gradually in the short to medium term as capital support schemes continue to be delivered.

Innovation and landscape-scale collaboration pilots

If progressed, the Innovation Pilot and Landscape-scale Collaboration Pilot are expected to provide positive effects for all SEA objectives. Pilot actions are expected to include coordinated tree planting, habitat restoration, peatland and carbon-rich soil management, trials of low-emission technologies, and adoption of adaptation-focused farming practices. These interventions are expected to enhance ecological connectivity, increase carbon sequestration, improve resilience to flooding and drought, reduce nutrient runoff and local emissions, and strengthen rural landscapes and character. Positive effects are expected across all SEA topics from these pilots with uncertain minor positive effects identified for most. For some SEA objectives such as 1: Biodiversity, flora and fauna, 3a: Climate change mitigation, 8: Landscape and 9: Material assets there is potential for benefits introduced by pilot schemes to be considerable. However, the significance of effect is uncertain and will be dependent on the design and delivery of pilot schemes. Benefits are medium to long term, dependent on uptake, location, and scale.

Tier 4

Developing a new AKIS, including the implementation of a CPD system for the sector.

The existing informal AKIS arrangements provide minor positive effects for all SEA objectives in the medium to long term. Advice, guidance and resources delivered through the Farm Advisory Service, the Knowledge Transfer and Innovation Fund, the Monitor Farm Network and other organisations help farmers and crofters understand environmental and business requirements. This supports biodiversity protection, sustainable land and nutrient management, climate mitigation and adaptation, soil and water management, rural wellbeing, and efficient use of resources.

The new Agricultural Reform-aligned AKIS with an enhanced CPD system is expected to strengthen these effects across most SEA objectives. By embedding Agricultural Reform outcomes such as biodiversity enhancement, nature restoration, climate change mitigation and adaptation, community wellbeing, and sustainable resource use, the CPD system will promote knowledge transfer, behaviour change, and more effective farm practices. For SEA objective 2: Population and human health, the new AKIS is expected to deliver direct significant positive effects by improving access to support networks, training, and advice that contribute to farmer resilience, community wellbeing and mental health. For objectives 1: Biodiversity, flora and fauna, 3a: Climate mitigation, 3b: Climate adaptation, 4: Air, 5: Soil, 6: Water, 8: Landscape and 9: Material assets, strengthened minor positive effects are anticipated. The scale of change will depend on uptake, content design and delivery of the CPD system. Effects are expected in the medium to long term, allowing for establishing the new AKIS and time for improved knowledge sharing and best practice to become embedded across the industry.

For SEA objective 7: Cultural heritage, indirect minor positive effects are expected, reflecting the potential of regenerative land management to benefit heritage settings and rural character. However, outcomes in this area are uncertain without specific focus on heritage management within the strategic objectives of the Agricultural Reform, which the CPD system will be expected to align to. Overall, the development of a formal AKIS incorporating CPD is expected to enhance the existing system by providing structured training and other learning opportunities and consistent alignment with Agricultural Reform goals, but the strength of its effects will rely on inclusivity, accessibility to all farmers and crofters, and adequate resources to support widespread participation.

Cumulative, secondary and synergistic effects

This section of the Environmental Report sets out the potential cumulative, secondary and synergistic effects which may arise from the actions in the emerging Agricultural Reform. It explores potential effects in relation to each of the SEA topics and identifies key issues arising for each topic. Table E.1 in Appendix E provides an overview of the scores for the changes being introduced by the emerging Agricultural Reform.

Biodiversity, flora and fauna

Nature restoration is included within one of the five key objectives of the Act and this is translated into the strategic outcomes of the Agricultural Reform. The Agricultural Reform applies nationally across 69% of Scotland’s land used for agriculture, so the potential scale of change for biodiversity is considerable. Based on the strategic direction set for farming, significant positive effects are expected in the long-term. However, while this sets a positive aspiration for agriculture, the magnitude and timescales for delivery of cumulative positive effects will be dependent on the actual measures adopted and implemented by the Agricultural Reform towards meeting its strategic objectives.

Many of the measures introduced by the emerging Agricultural Reform are expected to contribute towards protecting and enhancing biodiversity. Overall, new measures being introduced across all the Tiers are expected to slightly strengthen existing positive environmental effects being delivered by previous CAP schemes, introducing a greater focus on the protection and enhancement of biodiversity. Some schemes, such as introducing new protections for peatlands and introduction of the Whole Farm Plan are expected to deliver significant positive effects for biodiversity due to their widespread applicability, delivering more consistent approaches to biodiversity protection. Other actions within Tiers 2, 3 and 4 are more directly focused on delivering positive outcomes for nature. However, these Tiers are less widely available. Many of the scheme changes are expected to slightly strengthen positive effects resulting in a continuation of minor positive effects for biodiversity, flora and fauna. Although some measures will bring short term effects, others will take longer for the benefits for biodiversity to be fully established.

Some minor negative effects are also identified across a number of tiers where agricultural actions present risks to habitats. For example, measures which focus heavily on climate efficiency may encourage land-use intensification and associated adverse effects on nature.

Although cumulative positive effects for biodiversity are expected to be significant, the change in effects introduced by existing measures outlined within the Agricultural Reform are expected to deliver minor cumulative positive effects with regard to SEA objective 1: biodiversity, flora and fauna. These effects are expected to be delivered in the medium to long term and are considered to be relatively stronger than pre-existing CAP schemes.

Population and human health

Enabling rural communities to thrive is a key objective of the Act, which translates into the Agricultural Reform strategic outcomes framework through the focus on support for thriving businesses and a just transition, encouraging skills development, knowledge exchange, wellbeing and mental health and access to services. While this sets a positive long-term aspiration for agriculture, the magnitude of change and timescales for delivery of positive effects is dependent on the actual measures adopted and implemented by the Agricultural Reform in meeting its strategic objectives.

Overall, most scheme changes introduced by the Agricultural Reform are expected to deliver a continuation or slight strengthening of pre-existing positive effects in relation to population and human health. Indirect positive environmental effects are enhanced by encouraging sustainable land management practices which will deliver improvements in landscape, air and water quality, providing associated health and wellbeing benefits in the short to longer term. Direct positive effects for populations are attributed to support for agricultural businesses and opportunities for innovation and skills development. There is potential for significant positive effects associated with the delivery of a new AKIS and CPD system (Tier 4). However, these are uncertain as the outcomes delivered are dependent on knowledge sharing, training, innovation and behaviour change. The budget allocated to Tier 4 is also currently uncertain, which will influence the scale and reach of positive environmental effects.

Overall, most environmental effects consist of a continuation or a slight strengthening of pre-existing positive effects. The overall cumulative effect is expected to be minor positive, with the magnitude of change by measures introduced by the Agricultural Reform expected to deliver minor positive cumulative effects for SEA objective 2: populations and human health, delivered in the medium to long term.

Climate mitigation

The objectives of the Act and the strategic outcomes of the Agricultural Reform place considerable focus on the reduction of greenhouse gas emissions. Agriculture is the second largest source of emissions in Scotland, so action in this sector has significant influence on meeting the 2045 net zero target. While significant positive effects are expected regarding the strategic direction for the Agricultural Reform and the long-term vision for agriculture, the strength of positive effects will be dependent on the magnitude and speed of change being delivered through the Agricultural Reform.

The majority of scheme changes being introduced by the Agricultural Reform are expected to deliver a slight strengthening of positive effects in relation to SEA objective 3a: Climate change mitigation. In some cases, positive effects will be considerably strengthened due to actions which reduce greenhouse gas emissions and protect and enhance carbon stores. For example, new permanent grassland requirements (Tier 2) are expected to deliver significant positive effects due to their widespread applicability given the coverage across Scotland, as grassland is a key carbon store.

However, in most cases effects will be limited to a slight strengthening and continuation of pre-existing minor positive environmental effects. For example, continuing to deliver previous schemes such as AECS which provide direct opportunities for delivering climate mitigation activity. Significant negative effects are also identified as continuing in relation to the SSBSS scheme which directly sustains emissions-intensive production, although these are slightly reduced by the introduction of the new calving interval requirement.

Overall, the change introduced by the Agricultural Reform is expected to deliver minor positive cumulative effects for SEA objective 3: Climate change mitigation in the medium to long term, delivered in the medium to long term.

Climate change adaptation

Climate adaptation is included within one of the five key objectives of the Act, and this is translated into the strategic outcomes of the Agricultural Reform. Scotland faces major risks from flooding, drought and heat stress. Measures that increase resilience in soils, water, and ecosystems are expected to provide widespread climate adaptation benefits over time. While the strategic vision for the Agricultural Reform could deliver significant positive effects in the long-term, the strength of positive effects will be dependent on the magnitude and speed of actual changes implemented by the Agricultural Reform.

Across the Agricultural Reform, most new measures are expected to slightly strengthen pre-existing positive environmental effects in relation to climate change adaptation. Some new measures, such as cross-compliance protections for peatlands and wetlands, are expected to deliver additional significant positive effects due to the role that peatlands and wetlands play in flood risk management. Most other schemes offer some benefits for climate change adaptation, associated with the promotion of land management practices that improve the capacity of farmland to withstand climate risks such as flooding and drought. However, in many cases the scale of change from pre-existing schemes is only expected to deliver minor change, associated with encouraging sustainable farming practices and continuing to deliver schemes such as AECS which provide direct opportunities for delivering climate adaptation measures.

Overall, the change being introduced by the Agricultural Reform is expected to deliver minor cumulative positive effects overall in relation to SEA objective 3b: Climate change adaptation, delivered in the medium to long term.

Air

Air quality is not specifically identified in the objectives of the Act however it is acknowledged within the Agricultural Reform strategic outcomes framework under ‘nature restoration’. Agriculture accounts for 90% of ammonia emissions in Scotland, which is a significant contributor to poor air quality and PM2.5 pollution. Reducing emissions will therefore support cleaner air, but changes are expected to be indirect and gradual. While the strategic vision for the Agricultural Reform could deliver significant positive effects in the long-term, the strength of positive effects will be dependent on the magnitude and speed of actual changes implemented by the Agricultural Reform.

Many of the scheme changes implemented by the Agricultural Reform encourage sustainable agricultural practices, promote nature restoration and reduce emissions. Effects identified under most of the Tiers are limited to a continuation or slight strengthening of minor positive effects. Many of these effects are indirect and associated with the delivery of positive effects for the nature and climate, delivering local improvements in air quality, rather than air quality being the primary policy aim. Some schemes are expected to result in direct minor positive effects associated with encouragement of more efficient agricultural practices, reducing reliance on chemical pesticides and fertilisers, and mitigating greenhouse gas emissions, but which can bring about change in the short to medium term.

Overall, minor positive effects are expected to continue to be delivered for SEA objective 4: Air however the magnitude of change introduced by the Agricultural Reform is expected to deliver minor positive cumulative effects, with most impacts identified as being indirect and gradual, delivered in the medium to long term.

Soil

Soil health is identified as a key objective of the Act and is reflected in the Agricultural Reform’s strategic outcomes framework. Scotland’s soils store around 3,000 million tonnes of carbon so protecting and restoring these soils therefore helps to address broader significant environmental issues. Improvements in soil condition will take time, so positive effects identified for the Agricultural Reform are expected to be delivered in the medium to long term. While the strategic vision for the Agricultural Reform could deliver significant positive effects in the long-term, the strength of positive effects will be dependent on the magnitude and speed of actual changes implemented by the Agricultural Reform.

Measures such as the introduction of the Whole Farm Plan support a systematic approach to improving fertility, soil structure and carbon storage. New cross-compliance protections for peatlands and wetlands strengthen the conservation of carbon-rich soils and reduces erosion, degradation and nutrient loss. These Tier 1 measures will be applicable to a significant number of farms and a large proportion of Scotland’s land area, thereby delivering significant positive effects. The Scottish Government has also indicated that it will review mandatory options for the management of permanent grassland going forward. One option under consideration is the introduction of new permanent grassland requirements (Tier 2), which, if implemented, could deliver significant positive effects due to the widespread applicability, helping to ensure more consistent and proactive protection and enhancement across over 4 million hectares of permanent grassland. Other measures introduced by the Agricultural Reform are expected to deliver continued or slightly strengthened minor positive effects for soil health, quality and quantity by encouraging good practices that protects soils from erosion and degradation and continuing to deliver schemes such as AECS which provide opportunities for enhancement. These measures deliver positive effects in the short and longer term.

Overall, the measures being introduced by the Agricultural Reform, particularly associated with the widespread applicability Tiers 1 and the potential Tier 2 permanent grassland option, are expected to deliver significant positive cumulative effects overall for SEA objective 5: Soil, delivered in the medium to long term.

Water

Water quality is not specifically identified in the objectives of the Act however it is acknowledged within the Agricultural Reform strategic outcomes framework under ‘nature restoration’. 40% of Scottish surface water bodies are at risk of failing environmental targets due to diffuse pollution from agriculture. While the strategic vision for the Agricultural Reform has the potential to deliver significant positive effects for the water environment in the long-term, the strength of positive effects will be dependent on the magnitude and speed of actual changes implemented by the Agricultural Reform. Benefits for water are likely to emerge gradually as farming practices change.

The majority of schemes changes within the Agricultural Reform are expected to deliver a slight strengthening of minor positive effects for the water environment. Some measures, such as new protections for peatlands and wetlands (Tier 1) are expected to deliver significant positive effects associated with their strengthened protection and broad geographic coverage of applicability. Similarly, the Scottish Government has indicated that it will review mandatory options for the management of permanent grassland going forward. One option under consideration is the introduction of new permanent grassland requirements (Tier 2), which, if implemented, could reduce diffuse pollution, limit nutrient losses and protect riparian areas across a large area, delivering significant positive effects gradually across Scotland’s river catchments in the short, medium and longer term. However other Agricultural Reform measures are only expected to result in continued, or slightly strengthened, minor positive effects for the water environment. This includes continuing to deliver schemes such as AECS (Tier 3) and other more targeted support options.

Overall, the Agricultural Reform is expected to deliver positive effects for the water environment. However, the magnitude of change introduced by Agricultural Reform measures is expected to deliver minor positive cumulative effects for SEA objective 6: Water, delivered in the medium to long term.

Cultural heritage including architectural and archaeological heritage

Cultural heritage is not directly mentioned within the Act’s objectives or within the Agricultural Reform strategic outcomes framework. Agriculture is a key pressure on cultural heritage, with risks such as damage to buried archaeology, erosion around historic field systems, or impacts from land-use change. Scotland’s agricultural landscapes comprise many important designated and undesignated heritage assets. Designated assets are protected by other legislation however this leaves many undesignated assets vulnerable to loss and damage by agricultural activity. Future actions introduced by the Agricultural Reform may also have the potential to adversely affect cultural heritage assets due to its omission from the strategic objectives of the Agricultural Reform which will guide future measures. It also may miss opportunities to promote the positive management of heritage assets through agricultural practices.

Many of the effects identified for the changes introduced by the Agricultural Reform reflect continued pre-existing effects. Some strengthening of minor positive effects are identified, associated with the role sustainable practices can play in preserving traditional land-use patterns and schemes play in supporting crofting, which is a unique aspect of Scotland’s cultural heritage. Minor negative effects are also identified where agricultural practices may have adverse effects on heritage assets and landscapes. However, the majority of these effects remain a continuation of effects associated with pre-existing schemes, with no new policy measures introduced that directly promote the sustainable management of heritage assets within agricultural practice.

Overall, the cumulative effect of the change is negligible with regards to SEA objective 7: Cultural heritage, including archaeological and architectural heritage.

Landscape, seascape and townscape

Landscape is not a direct policy focus of the Act or the Agricultural Reform’s strategic outcomes framework. However, delivering positive outcomes for nature and climate deliver multifunctional benefits, including the protection and enhancement of the visual character of rural areas. The Agricultural Reform has impacts across the farmed landscape, which covers a large proportion of Scotland, so positive management practices that promote good land management, help restore habitats and support sustainable grazing will deliver widespread positive impacts. This includes for protected and valued landscapes. While the strategic vision for the Agricultural Reform has the potential to deliver significant positive effects for landscapes in the long-term, the delivery of positive effects will be dependent on the scale and speed of actual changes implemented by the Agricultural Reform. Benefits for landscape will likely emerge gradually as practices shift over time, however there is potential for positive landscape-scale effects due to the widespread applicability of the Agricultural Reform.

Changes introduced by the Agricultural Reform include measures which focus on support for climate mitigation, adaptation and nature restoration which will help support the resilience of Scotland’s landscapes. Across most changes introduced by the Agricultural Reform, a slight strengthening of positive effects is identified where schemes are considered to provide indirect landscape enhancement through improved land management and encouraging nature restoration. There is also potential for secondary benefits for landscape. For example, schemes which support soil quality, such as restoration of peatlands, as an integral part of Scotland’s landscape. In some cases, minor negative effects were identified associated with potential impacts of activities on the appearance and management of some landscapes. As with current schemes, the impact of changes introduced by the Agricultural Reform on landscape are expected to be indirect and realised over the medium to long term, as landscape improvements and ecological changes take time to manifest.

Overall, the changes introduced by the Agricultural Reform are expected to deliver minor positive cumulative effects for SEA objective 9: landscape, seascape and townscape, delivered in the medium to long term.

Material assets

Efficient use of resources through sustainable and regenerative practices is a key focus of the Act and is reflected in the Agricultural Reform’s strategic outcomes framework. Outcomes relating to food production, business profitability, and emissions reductions promote more efficient and sustainable use of land, inputs, and machinery. However, the Agricultural Reform interacts with the competing demands on Scotland’s land, which is a finite resource. While the ambition for adopting an integrated approach to sustainable land use is clear at strategic level, how this can be achieved in practice remains uncertain, meaning that outcomes for material assets may depend heavily on how future implementation of the Agricultural Reform is designed and delivered.

Several schemes are expected to deliver negligible effects, and many positive effects reflect a continuation of effects from previously existing schemes. In some cases, a slight strengthening of minor positive effect is identified. For example, implementation of the Whole Farm Plan (Tier 1) requires audits which will highlight inefficient use of resources across the business. However, they do not require corrective actions meaning benefits depend on voluntary follow-up management decisions and positive effects are limited. Other Agricultural Reform schemes promote measures which generally encourage less intensive farming practices and efficient use of resources, reducing waste. Minor negative effects are also identified where schemes are expected to impact land available for agricultural production or continue to support production systems with high demands on resources.

While minor mixed effects are identified for material assets overall, the changes introduced by the Agricultural Reform are not expected to result in significant change with regards to resource use and waste production. Overall negligible cumulative effects are identified for SEA objective 10: material assets as most effects introduced by the Agricultural Reform are expected to be minor.

Cross cutting policy proposals

In addition to the cumulative, secondary and synergistic effects identified from the change introduced by the Agricultural Reform, there are also strong interlinkages with cross cutting policy proposals. This includes existing and forthcoming Rural Support Plan which will support the delivery of the objectives of the Act, encourage sustainable land use practices, climate mitigation and adaptation, bring positive effects for biodiversity, flora and fauna, water and soils.

Reasonable Alternatives

Part 14(2) of the 2005 Act requires that:

“The report shall identify, describe and evaluate the likely significant effects on the environment of implementing (a) the plan or programme; and (b) reasonable alternatives to the plan or programme, taking into account the objectives and the geographical scope of the Plan or Programme”.

Therefore, the SEA must appraise not only the schemes within the emerging Agricultural Reform, but “reasonable alternatives” to these. The effects of implementing the reasonable alternative in relation to each relevant scheme are outlined below.

Scheme-level reasonable alternatives

An overview of the options considered and detailed assessment of scheme-level reasonable alternatives are presented within Appendix D. A summary of assessment findings is provided below.

New protections for peatlands and wetlands

Adopting an alternative definition for peatland

Using a lower threshold for defining peatland (Option 1) is expected to significantly strengthen positive effects across almost all SEA objectives, as a larger area of Scotland’s peatland would be protected, strengthening biodiversity, population and wellbeing, reducing greenhouse gas emissions and improving climate resilience, air, soil and water quality, and further protecting the integrity of heritage sites, waterlogged archaeology and landscapes. Minor negative effects also are expected to be slightly enhanced for SEA objective 1: biodiversity, flora and fauna, 3a: climate mitigation, 4: Air and 8: Landscape, seascape and townscape due to local activities such as domestic peat cutting.

Using a higher threshold (Option 2a) would lead to reduced positive effects, as fewer areas would benefit from protection, while also limiting the extent of minor negative impacts. Effects for 9: material assets are negligible under both options. Due to current data limitations on the national extent of peatland depth for these options, the exact scale of additional effects that would arise for each SEA objectives are uncertain.

Scottish Suckler Beef Support Scheme

SSBSS Alternative A - Split Payment (base plus top-up):

This option would change the Suckler Beef Support Scheme so that farmers receive a base payment for every eligible calf, regardless of whether the 410-day calving interval is met, and then a top-up payment for calves that do meet the interval requirement. The aim is to provide a safety net for all herds, particularly smaller ones, while still rewarding those that achieve improved fertility and efficiency.

The alternative policy would likely reduce pressure on farmers to intensify production, while still rewarding efficiency. For crofters and small herds, it offers more stability and helps keep traditional, extensive systems viable. This leads to minor improvements for SEA objectives 1: Biodiversity, flora and fauna, 2: Population and health 5: Soils, and 7: Cultural heritage compared to the single-payment policy. The effect on 3a: Climate change mitigation remains significantly negative, as the reduced incentive to shorten calving intervals means smaller emissions savings. Impacts on water, air, landscape and material assets are generally unchanged or show very small (near-negligible) improvements compared to the single-payment SSBSS policy.

SSBSS Alternative B - Front-Loading:

This approach would change how payments under the Scottish Suckler Beef Support Scheme are distributed. Instead of a flat rate for every eligible calf, the first calves in a herd’s claim would receive a higher rate, while later calves would receive a lower rate. This design places greater emphasis on supporting crofters and small herds, who typically have only a few calves, while larger herds would see lower average payments per calf. The 410-day calving interval condition would still apply under this approach.

This alternative would likely help sustain low-intensity grazing with native breeds, which benefits biodiversity, cultural heritage and valued rural landscapes. It also helps strengthen support for small communities and wellbeing, with minor positive improvements compared to the single payment scheme. However, the approach gives larger herds less incentive to tighten calving intervals, so emissions savings are reduced, and the overall effect on SEA objective 3a: Climate change mitigation remains significantly negative, slightly more so than the single payment SSBSS policy. Other environmental effects, including on SEA objectives 5: Soil and 6: Water, are broadly similar to the Alternative A with generally mixed minor effects with some small improvements over the single-payment system.

Alternative delivery mechanisms for Enhanced (Tier 2)

The development of Enhanced (Tier 2) payment framework for 2025/26 was focused on delivering meaningful, achievable changes in the short-term within the current available resources, organisational and technological environment and with minimal impact on business-as-usual services to farmers. Enhanced aims to provide support payments to deliver measures on the ground which would deliver improved biodiversity and climate mitigation. The development process involved an initial review of CAP schemes with payment delivery platforms. Twenty-five existing schemes/delivery platforms were reviewed and reduced to four to allow more detailed consideration. These are Cross Compliance, AECs, MACs and Greening. Greening’ was identified as the best existing payment platform for delivery of the policy outcome.

The alternative approach of using a different delivery mechanism for Enhanced (Tier 2) is not expected to result in different environmental effects from those identified in the Tier 2 assessment. The use of an alternative delivery mechanism does not fundamentally impact the measures Enhanced is seeking to implement or the policy outcomes it sought to achieve. However, the timescales associated with the significant IT development required to adapt AECS, MAC and cross-compliance to meet the needs of Enhanced would mean the delivery of associated positive environmental effects would be delayed, bringing about change in the in the medium to the long term.

Strategic reasonable alternatives

The ‘do nothing’ scenario

Within development of the Agricultural Reform the ‘no change’ option was considered. However, this would perpetuate the existing EU CAP schemes within the limits of the existing legislation and deliver the policy outcomes for CAP as it was at that time. This option would have fallen short of the desired increased deliverables set out in the Vision for Agriculture which intends to push beyond the policy outcomes of the previous CAP.

The assessments presented in this Environmental Report focus on the environmental effects of the change between pre-existing CAP requirements and the scheme changes introduced by the Agricultural Reform. As such, the ‘do nothing’ approach (i.e. maintain the status quo) has been considered within each individual assessment for each component of each Tier.

In most cases, the measures introduced by the Agricultural Reform have resulted in a slight strengthening of pre-existing positive effects being delivered by CAP schemes. As such, the ‘do nothing’ approach would result in these strengthened effects not being delivered.

Alternatives for the pace of budget allocation shift between Tiers

The Route Map sets out their ambitions: ‘To give farmers and crofters an indication of how funding will be targeted, we have made three commitments:

over time, at least half of all funding will be targeted towards nature restoration and climate mitigation and adaption

70% of funding will be allocated to Tiers 1 and 2

we will apply a funding split of 70 / 30 between Tiers 1 and 2’.

This presents a sliding scale of alternative options regarding the share of budget allocated to each of the Tiers. This includes both the balance within Tiers 1 and 2 (with a ministerial commitment to a 70:30 split) and the balance between Tiers 1/2 and Tiers 3/4 (with a ministerial commitment to move to 70:30 overall). At present, the majority of the Agricultural Reform budget goes to Tiers 1 and 2, with a commitment to transition to 70% for Tiers 1 and 2 and 30% for Tiers 3 and 4.

Tier 1 currently requires a comparatively low minimum environmental standards to meet to receive Base payments. While strengthened positive environmental effects are identified for new Tier 1 measures, the magnitude of these effects is largely attributed to the number of farms that will access Base payments and associated land area that will be required to comply with the measures introduced. Adjustment in budget in favour of Tiers beyond Tier 1 would still require farmers to deliver these outcomes and therefore the positive environmental effects for Tier 1 would remain unchanged.

Schemes within Tiers 2, 3 and 4 are more directly targeted at managing agriculture for climate and nature and strengthened budgets (with greater participation) in these schemes will result in strengthened positive effects for SEA outcomes. Resulting in strengthened direct positive effects for nature and climate (i.e. SEA objectives 1: Biodiversity, flora and fauna, 3a: Climate mitigation, 3b: Climate adaptation, 4: Air, 5: Soil, and 6: Water).

Adjusting the budget split between Tiers 1 and 2, consistent with ministers’ commitment to apply a 70:30 split over time, or otherwise shifting the balance in favour of Tier 2 would likely incentivise more farmers to go beyond Base (Tier 1) payments and access Enhanced (Tier 2) payments, further strengthening associated positive environmental effects identified in the assessment. Stakeholder feedback for Tier 2 measures indicates that the measures within Tier 2 are relatively achievable and implementable for many farmers. As such, adjusting the budget ratio in favour of Tier 2 would be likely to encourage more farmers to participate, rather than opt-out.

Tier 3 offers the greatest potential for delivering significant benefits for nature and climate but currently has the lowest level of participants. The scheme is competitive and has a relatively small portion of the overall budget share. Increasing the funding available at Tier 3 would likely incentivise farmers to access this level of funding, with opportunity to deliver significant positive effects across most SEA objectives, further strengthening the effects identified in the assessment due to greater participation in the scheme.

An increased Tier 4 budget has the potential to offer considerable support for farmers and crofters and help support knowledge sharing, behaviour change, innovation and training, with opportunities to embed good practice across the industry and deliver significant positive environmental effects. However, the scale of positive effects are more uncertain as they are dependent on the design of the AKIS and CPD system, as well as the reach, uptake and influence they have.

There are some associated risks with adjusting the budget ratio too quickly and without the appropriate level of support. Some participants, particularly crofters and small landholders, are more likely to struggle to keep pace with the requirements introduced, resulting in loss of payments and adverse effects in relation to SEA objective 2: Population and human health. Furthermore, more profitable sectors and large-scale commercial farms may decide that if change is too much and the level of support afforded is no longer worth the actions, they may opt-out out of the scheme entirely, including from Base payments (Tier 1) thereby losing the associated positive environmental effects. This may result in a number of large-scale farms only meeting minimum legal requirements and potential for significant adverse environmental effects all SEA topics associated with agricultural activity.

These risks may also result in disjointed and spatially uneven environmental outcomes, where some farms are able to participate in Tiers 2, 3 and 4, delivering significant positive environmental effects, while neighbouring farms are struggling to, or opting out of, meeting minimum requirements.

Overall, if the Agricultural Reform budget was weighted more towards delivering outcomes for nature and climate, by adjusting budget ratios more towards Tiers 2, 3 and 4, there is greater opportunity for the delivering of significantly strengthened cumulative significant positive environmental effects across most of the SEA objectives. However, this is weighted on balance with potential risks and associated adverse effects associated with shifting the budget too quickly, which have the potential to result in negative or uneven environmental effects.

Where the ratio is set on the sliding scale of alternative options should be informed by progress in meeting our national aims for Net Zero, halting biodiversity decline, delivering nature restoration and delivering a Just Transition.