Extreme weather making the case for change

The UK Autumn Budget will be set this week, and whatever the Chancellor decides to do will have implications for the Scottish Government’s own budget in December.

That could mean the Scottish Finance Secretary has more, or less room for manoeuvre, depending on the choices made by Prime Minister Andy Burnham’s government.

There is already a £5 billion gap between projected spending and revenue for this parliamentary term in Scotland, which is one of the reasons why there has been such a focus on public sector reform in the early part of this session.

Whatever the outcome this week, Scottish Government Ministers are already facing calls from all sides for increased spending.

The farming budget

On agriculture, NFU Scotland wants to see the budget to keep up with inflation, which the union says requires an extra £183m for 2027/28.

Soil Association Scotland agrees with this, and we made the same point in our evidence to the Rural Affairs Committee in September. However, the key question is not simply how much is available, but how it is allocated.

We have consistently said that the current system for farm payments needs to change, and that spending is poorly targeted and unevenly distributed.

The Rural Support Plan indicates that the current budget split across the four-tier framework – 80% in Tiers 1 and 2 with the remainder in Tiers 3 and 4 – will stay the same until 2030/31 when 30% of the budget will be spent on Tiers 3 and 4.

In the first year, this is shown as a £45m increase for Tier 3 and a £22m increase for Tier 4. This still leaves the bulk of support in Tiers 1 and 2 but would allow significantly more investment in actions to benefit nature and climate (Tier 3) as well as advice, knowledge transfer and innovation support in Tier 4.

We would also suggest a shift of more funding from Tier 1 to 2, to support specific practices on farm that contribute to government policy objectives, such as improving diversity in grass swards, sowing cover crops or reducing agrochemical use, providing an incentive for some to act, and a reward for early adopters.

Climate adaptation

To adapt to a changing climate, Scottish agriculture must move to a more resilient model, starting with reducing reliance on inputs such as synthetic nitrogen fertiliser and imported feed that are subject to market volatility and geopolitical shocks.

MSPs returned from the October parliamentary recess this week to weather alerts from the first named storms of the year, Austen and Boelo.

Travellers faced disruption, high streets were flooded and tens of thousands of households suffered power cuts. The adverse conditions are another reminder that extreme weather events are becoming more frequent.

This week it was flooding and high winds, but it is not long since parts of England and Europe were in drought, emphasising the risk to the supply of produce like fruit and vegetables that we import to Scotland. Over time, these impacts are likely to increase.

Building resilience

Soil Association has set out its thinking in the report, No Drought About It, charting the ways in which agroecological and organic farming practices can contribute to climate resilience, including helping farms withstand droughts, floods and heatwaves.

Some existing support schemes are encouraging activity that can help farmers to adapt, such as Enhanced Greening and the Agri Environment Climate Scheme (AECS), but these are limited in terms of ambition and budgetary allocations.

Government policy must incentivise and reward the types of farming practice that will build resilience – and provide support for farmers to co-operate. And Ministers need not wait until the end of this parliamentary term to do so.

Using mechanisms within the Agriculture and Rural Communities Act 2024, the largest BPS payments could be capped to free up funds to use elsewhere.

For example, using farm payment data from 2024, a BPS cap at £100,000 could free up £35million, which is £10million more than the entire budget for AECS this year. Other countries have done this. For example, in Ireland, under the Basic Income Support for Sustainability scheme (which replaced BPS) the maximum payment is 66,000 euros.

How any extra funds might be used would be a matter for debate. Our suggestion is that some of this could pay for increased support for integrating trees on farms (£10m per the Soil Association/Woodland Trust Scotland proposal), a Market Garden Support Scheme (£2.7m according to the Scottish Agroecology Partnership proposal), and increased funding for knowledge transfer and innovation (£5m per the Scottish Environment LINK proposal) as a starting point.

Next steps

Others will no doubt have different suggestions – and not everyone will agree with a proposal to cap the largest farm payments. Indeed, during the discussion in the Rural Affairs Committee evidence sessions, there was support for “frontloading” Tier 1 payments, which is a different way of attempting to ensure a fairer distribution of funds.

But there is no question that the Scottish Government does have options. Indeed, Cabinet Secretary Gillian Martin told the committee that Ministers could be “agile in shifting money around when we see more demand for one particular area and less demand for others”. There is a strong argument – and arguably an imperative given the impact of a changing climate – to make that change sooner than 2030.