New report calls for rural businesses to be placed at heart of Scotland’s economic growth

Press Release

Practical measures by government to support progress in agriculture, food and drink, skills and supply chains can reap dividends for Scotland’s national economic growth, a new report has said.

Scottish Land & Estates, the rural business organisation, has launched a new paper which argues that rural Scotland should not be treated as peripheral to the economy but instead recognised as a source of productive growth, business opportunity and long-term national resilience.

The report- Strengthening Scotland’s Agricultural Economy: How economic growth delivers a resilient and secure food and drink system - was formally launched at an event at the Royal Highland Show at Ingliston this weekend. It makes more than 30 recommendations, including:

• Expanding support for benchmarking, business planning and on-farm management improvement so more businesses can adopt the traits of high-performing farms.

• Backing investment in precision agriculture, resource efficiency and practical innovation that lowers production costs and strengthens resilience.

• Expanding support for knowledge exchange, research and on-farm innovation to accelerate uptake of better practice and strengthen business performance.

• Learning lessons from the Dutch co-operative sector and establishing a Co-operative Growth Fund to provide capital for farmer-owned processing, storage, packing, branding, digital trading and export development.

• Supporting confidence and investment measures that enable sustainable expansion in breeding herds and flocks to capitalise on demand for high-provenance red meat.

• Supporting a more resilient domestic barley supply chain to capitalise on the success of Scottish whisky.

• Testing future tax changes against affordability, proportionality and likely impacts on business investment in rural areas.

The paper calls for a more practical, evidence-based approach from government, with future agricultural and rural policy co-designed with land managers and focused on delivery. It says policy must support food production, climate action, biodiversity, rural employment and business profitability together, rather than treating them as competing priorities.

Eleanor Kay, Senior Policy Adviser – Agriculture & Climate Change at Scottish Land & Estates, said:

“Scotland’s rural economy has a central role to play in national economic growth, food security and environmental delivery.

“Agriculture and land management can deliver multiple outcomes at the same time, including food and fibre production, climate mitigation, biodiversity gains and rural jobs. However, to achieve that, policy must be practical, evidence-based and developed in partnership with the people who manage the land.

“The central policy test should be whether government decisions strengthen the capacity of rural businesses to invest, adapt and deliver for the wider economy over the long term. That means judging rural policy not simply by the level of expenditure attached to it, but by whether it improves productivity, resilience, skills, market power and the ability of businesses to respond to change with confidence.

"Every pound invested in Scottish agricultural output generates around £1.51 of wider economic activity once supply chain effects are counted - but the question is how much of that actually stays in rural Scotland. Co-operative models from other countries show what is possible when producers own more of the processing, branding and route to market. Strengthening local processing, supporting co-operation and improving procurement links are not niche rural issues - they are the levers that make growth inclusive, and we want to see Scotland take serious steps in that direction."