Chancellor Rachel Reeves’ budget has overhauled agricultural funding for the devolved nations, integrating it into each region’s broader block grant through the Barnett formula, rather than maintaining separate, ring-fenced allocations.

This shift means agricultural support will now compete with other regional priorities, such as health and education, potentially undermining long-term stability for farming in Scotland, Wales, and Northern Ireland.

Under the new budget, Scotland will see a £3.4bn increase in its overall block grant, bringing it to approximately £47.7bn for 2025-26. This will be the largest budget allocation Scotland has received since devolution.

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However, the change also means that, in the 2024/25 budget, the separate, ring-fenced allocation for Scottish agriculture has been removed. Agricultural funding will now be incorporated into Scotland’s overall block grant and distributed according to the Barnett formula, which adjusts funding based on changes in UK government spending.

As a result, agricultural funding is no longer guaranteed or isolated but will be subject to the same financial adjustments as other public services.

The previous funding arrangement, which was introduced in 2021, stemmed from Lord Bew’s extensive review of agricultural funding for the devolved nations.

Chief executive of Scottish Land & Estates (SLE), Sarah-Jane Laing has written to the Treasury to advocate for greater support for Scotland’s farmers and to ensure their voices are heard amid the growing backlash to the budget.

In her letter, Laing stated: “The Bew Review provided a welcome uplift in funding for Scottish farmers, reflecting their contribution to the UK’s food security and shared ambition for more sustainable and regenerative farming practices.

“This uplift was a short-term solution to historic inequalities in intra-UK funding allocations. The review recommended further work to establish a fair division of funding post-Brexit. SLE is concerned that the decision to alter this funding model could leave farmers in Scotland shortchanged in what is already a tightly squeezed agricultural support budget.”

SLE also raised concerns that by using the 2024/25 budget as a baseline, assumptions were made that the funding allocation was based on a 'fair methodology' –something the 2019 Bew Review found needed significant overhaul.

Additionally, they have called for a reassessment of the cuts to Agricultural Property Relief (APR) and Business Property Relief (BPR), which they argue will disproportionately burden Scotland’s rural communities.

Finance secretary Shona Robison expressed her disappointment with the budget, claiming it penalises Scotland’s farming and fishing industries.

She noted that the settlement does not reverse previous real-term cuts and offers no long-term certainty for sectors already struggling due to Brexit.

Robison said: “This short-term settlement was imposed contrary to the Bew Review’s recommendation for collective engagement on the principles of future intra-UK allocations.

"The UK Government must now outline how and when this meaningful engagement will take place to inform the UK Spending Review process.”

She also confirmed that £46.1m in funding would be returned to Scotland’s rural portfolio for its intended purpose, with further details to be provided in the Scottish Budget for 2025-26.