New study finds at least £1.17bn a year needed for nature and climate-friendly farming in Scotland to meet legal targets and commitments

• RSPB Scotland is warning that farming's ability to achieve net zero, restore priority habitats and wildlife, and protect soil and water resources is dependent on the UK Government committing to farm funding beyond next year.
• Current incentive schemes fall far short, and more ambition is needed to help farmers bring back nature and tackle climate change while producing food sustainably.

A new study published today shows that at least £1.17bn a year must be invested in nature and climate-friendly farming by the Scottish Government over the next decade to meet legally binding targets and environmental commitments. This represents 26% of the total £4.4bn that must be spent by the UK and devolved governments across the whole of the UK to meet such commitments.

The new report, An assessment of the financial resources needed for environmental land management in the UK, is written by an independent economist and reveals that at least £4.4bn a year needs to be directed solely towards environmental land management schemes that will allow the UK as a whole to achieve its net zero greenhouse gas emissions target on land, halt and reverse the catastrophic declines of nature, improve air and water quality, and look after our cultural heritage. The study estimates the costs for each of the four UK countries; Scotland must spend £1.17billion per year for the next ten years to meet its commitments.

The UK government currently allocates about £3.5bn in total to the agriculture budget each year. This amount is based on historic spending patterns that emerged under the EU Common Agricultural Policy (CAP) and was divided between Scotland, England, Wales and Northern Ireland accordingly. Since Brexit, and leaving the CAP, the UK Treasury has ring-fenced farm funding and divided it between the four UK countries in the same proportions as previously. Scotland’s share of that total farm budget currently is c.£600 million (17%) per year.  The study shows that Scotland needs almost double the current allocation of farm funding to ensure farmers and crofters can help meet its nature and climate commitments through sustainable land management over the next ten years. There is currently only a UK Government commitment to farm funding until 2024/25.

According to the report, the ‘scale of need’ has risen due to ongoing declines which have not been sufficiently tackled, leading to new environmental commitments and legally binding targets, most notably to achieve net zero greenhouse gas emissions. In addition, factors such as the war in Ukraine and the associated cost of living crisis have led to significant changes in the cost drivers impacting UK agriculture.

The Scottish Government is currently in the process of developing new farming policy and an Agriculture Bill will come before the Scottish Parliament in early Autumn. Around 75% of Scotland is farmed and there are growing calls for urgent investment in a future farming system that sustains and replenishes nature instead of damaging it.

Vicki Swales, Head of Land Use Policy for RSPB Scotland said: “It is vital there is ongoing commitment to increased levels of farm funding in Scotland over the next ten years. The majority of this funding must be spent on supporting nature and climate friendly farming so that this becomes the norm across all of Scottish farmland and our crofting areas. This requires a very significant shift from our current funding system which allocates only 6% of funding to environmental land management schemes.

We must get this right. Farming and food production depend on nature and having a climate conducive to growing crops and rearing livestock. The long-term societal benefits of shifting to nature and climate friendly farming will far outweigh the costs required to help farmers achieve it.”

The report builds on two previous studies and underlines that investment in environmental land management schemes must be on par with the level of ambition required, with the £1.17 billion also needing to support farmers by funding the creation and restoration of priority habitats and wildlife, protecting soil and water resources, and expanding organic farming.

Download the report: An assessment of the financial resources needed for environmental land management in the UK