Business and Policy April 2026 – Policy Brief

Food and Drink Processing Scheme  

As part of a £9 million investment by the Scottish Government to drive efficiency, productivity, innovation and investment in the Scottish Food and Drink sector, applications have opened for the Food and Drink Processing Scheme.  

The Food and Drink Processing Scheme offers grants of up to £400,000 to cover up to 40% of a project’s eligible costs.  

 

Eligible costs include: 

Buildings and Fixed Infrastructure – including construction, extension, or refurbishment of buildings to enable food or drink processing to take place.  This includes new or extended storage or conditioning facilities that are integral to such processing. 

Machinery & Equipment – This includes transforming, preparing, fermenting, refining, preserving, stabilising, maturing/conditioning, packing, or otherwise finishing the product as part of a processing operation. 

The deadline for applications is 12pm on Friday the 15th of May 2026.  Successful grant applicants will be notified during July.  All grants awarded under the Scheme will need to be spent by the 31st of March 2027. 

Please note that Food and Drink Processing grants will not be awarded for: 

• Primary production costs i.e. equipment or buildings/infrastructure used for growing, rearing, harvesting, or extracting raw materials (e.g. cultivation equipment or livestock sheds and/or milking equipment.  

• Building works or equipment used mainly for retail or direct sales to the public e.g. farm shops & cafes. 

• Processing into a non-food or drink product.  

• Transport and distribution e.g. delivery vehicles. 

• Routine maintenance, repairs, or replacement of existing items that do not add new processing capacity or seek to boost overall efficiency or productivity.  

• Operational costs, consumables, and marketing.  

To find out if your business and project are eligible, please click the  Apply link  below: 

Apply now 

 

Review of Community Right to Buy 

Following earlier public consultation, new proposals to combine existing Right to Buy legislation to simplify the process for community groups to take over land and assets have been published.   

Taking into consideration the existing powers introduced since 2003, the Community Right to Buy Review examined: 

• The Community Right to Buy 

• The Crofting Community Right to Buy 

• The Community Right to Buy Abandoned, Neglected or Detrimental Land 

• The Right to Buy Land to Further Sustainable Development 

Analysis of consultation responses showed widespread support for consolidating the non-crofting compulsory purchase rights and non-legislative changes such as updating guidance and setting up a public register for existing community groups.  However, following the consultation, due to the unique nature of crofting in Scotland, the Crofting Community Right to Buy will not be merged; instead it will be updated to simplify the process.    

It is expected that the revisions and mergers will be made during the course of the next Parliament.  For further information, please click on this link – Community rights to buy review – gov.scot 

 

Funding for Greylag Geese on Uist 

The Scottish Government has announced an additional £20,000 in funding for the culling of  Greylag Geese in Uist, bringing the total annual budget for control measures in the islands to £30,000. 

Thousands of Greylag Geese feed on Uist’s machair – species-rich coastal grasslands that are internationally recognised for their biodiversity and cultural importance.  Numbers of geese have increased significantly in recent years, causing damage to crops, and their increased numbers are impacting on ground-nesting birds including corncrakes.  

 

Help for Households Using Heating Oil 

In response to the conflict in the Middle East and the resultant significant increase in fuel costs; the Scottish Government have launched an emergency fund to help support lower income households dependant on oil to heat their home.  It is estimated that ~ 142,000 Scottish households (~6%) use heating oil.  The £5.4 million pounds of Scottish funding is in addition to the £4.6 million pledged by the UK Government.   

Further details of eligibility for the Scheme will be announced in the coming weeks, with the Scheme being delivered through Advice Direct Scotland  For more information, please click on this link: Energy Grants Assistance | Energy Advice | energyadvice.scot 

 

Electronic Identification for Cattle  

The Scottish Government have announced a delay in the implementation of Electronic Identification (EID) for cattle linked to the ongoing Sanitary and Phytosanitary (SPS) talks between the UK Government and the EU.  

While compulsory EID for cattle is now not expected to be implemented in Scotland until January 2028; the exact form of the Identification is not yet known as while currently, the Scottish Government favours Ultra High Frequency (UHF) ear tags, this is a divergence from the current EU requirement which uses low frequency (LF) ear tags and two matching identifiers.    

Defra have already committed to a LF system, with an anticipated mandatory switch to LF tags for newborn calves from 2027. 

 

Scottish Agricultural Wages Order 2026 

From 1 April 2026, the new Scottish Agricultural Wages Order (SAWO) comes into force.  Changes of note are – the minimum hourly rate increases to £12.71;the apprentice rate to £8.00,  the additional sum increases to £1.91, and the dog allowance rises to £11.81.   

From the 6th of April, Statutory Sick Pay (SSP) becomes a ‘right’ from Day one.  However, Agricultural Sick Pay (ASP) continues to only apply after 52 weeks of employment, and only from Day 4 of illness.  This means workers will receive SSP from the very first day they are off sick, with ASP kicking in later for those who meet the eligibility criteria, meaning that employers will need to manage both systems at once.  

 

Rural Support Plan 

The Scottish Government have published their Rural Support Plan 2026 – 2031 as part of the planned support for Scotland’s active farmers and crofters.  Replacing the legacy EU Common Agricultural Support (CAP), the focus of the new four-tier framework is on sustainable food production, action for climate and nature, and supporting rural communities over the next five years. 

The new framework will allow new support measures to be launched using the powers of the Agriculture and Rural Communities (Scotland) Act 2024 for payments to be made under the following four-tiers: 

 

Tier	Title	Payment Type	Scottish Government Budget*
1	Base	Direct	£282 million
2	Enhanced	Direct	£142 million
3	Elective	In-Direct	£25.6 million
4	Complementary	In-Direct	£6.5 million

* Illustrative Budget Split Between Support Schemes – Based on figures for 2026-2027 and 2025-2026. 

 

Tier 1 – initially based on the current Basic Farm Payment (BPS), this Base Level Direct Payment is aimed at supporting farmers and crofters engaged in food production and land management.  It will be ‘conditional’ on essential standards being met to ensure appropriate activity, climate, biodiversity, and business efficiency outcomes and will include eligibility criteria such as being deemed an active farmer/crofter, having a Whole Farm Plan, Cross Compliance, Greening and Fair Work First. 

Tier 2 – building on the Base Level Direct Payment, the Enhanced Level Direct Payment will support farmers and crofters whose agricultural practices do even more for climate and nature.  It will offer ‘additional’ measures to deliver outcomes relating to efficiencies, reducing greenhouse gas emissions and nature restoration and enhancement.  

Tier 3 – will involve an Elective Payment to support action that creates and/or protects habitats or species or improves business sustainability.  It will focus on wide ranging but targeted measures for nature restoration, innovation, and supply chain support.  This could be specific to a particular species or habitat, the creation of new agroforestry systems or woodlands, supporting conversion to alternative forms of agriculture such as organic production, encourage innovation and provide supply chain support.  Aspects of Tier 3 will initially be delivered through familiar mechanisms such as AECS, with improvements to the scheme being made going forward. 

Tier 4  – is ‘complementary’ to Tiers 1, 2, and 3 and will focus on aspects such as continuous professional development (CPD), advisory services; support for tree planting, woodland management, peatland restoration, and management in order to grow skills and capabilities within Scottish Agriculture and within rural and island communities.  

While Tiers 1 & 2 will not be competitive, Tiers 3 & 4 will have elements of competition for funding.  A further ~ £34 million of funding will be made available to cover Animal diseases (£23.5m) and smaller scale, one-off and generalist rural support including funding for: RSABI, Farmstrong, Tenant Farmers/Agricultural Holdings, SASA Agricultural Wages and Food and Drink Industry Strategy (combined circa ~£10m) 

For further details of the Rural Support Plan, please click on this link: Rural Support Plan (RSP) – gov.scot 

 

Christine Beaton, christine.beaton@sac.co.uk 

 

Relevant Scottish Government Publications and Consultations 

 

Consultations	Closing Date
https://consult.gov.scot/planning-architecture/penalties-incentives-to-speed-up-housing-delivery/	30th April 2026

 

Publications	Publication Date
Biosecurity practices for animal health: Guidance	27th March 2026
Scottish Farm Business Income Survey 2024-25 – Annual Estimates	26th March 2026
Sustainable and regenerative agriculture: code of practice	25th March 2027
Ecosystem Restoration Code (ERC): A Competent Model for private investment in nature restoration in Scotland	25th March 2026
Rural Support Plan	24th March 2026
Scotland’s Climate Change Plan 2026-2040	24th March 2026

 

Key Dates

 

Date	Action
15 May 26	Land used to claim Basic Payment Scheme payment in the current scheme year has to be ‘at your disposal’ on this date.
15 May 26	Basic Payment Scheme entitlements transfer window opens.
15 May 26	Deadline of midnight for SGRPID to receive Single Application Form / Basic Payment Scheme application.
2 April 26	Deadline for SGRPID to receive an application to transfer Basic Payment Scheme entitlements with an effective date of 15 May this year.