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I completely recognise that. Of course, we have heard the concerns that have been expressed but, as I say, there are exceptions. There is still more work to be done, and the bill is still working its way through Parliament at the moment. We need to have those further discussions, but I think that we have always been clear—I set it out to Parliament during the passage of the Land Reform (Scotland) Bill—that the issue has been under consideration for some time but we do not want to take an approach that either undermines the work that we have been doing or that has an impact on family farms or crofts in Scotland. That is where we have to make sure that we get this right.

I will certainly try my best on that front.

I thank the committee for inviting me to provide evidence on the 2026-27 budget and the allocations that have been made to my portfolio. Of course, the draft budget was published last Tuesday and is focused on a sustainable and impactful programme that will deliver for the people of Scotland.

The Scottish Government continues to face significant pressures, including a constrained funding settlement from the United Kingdom spending review, rising costs across public services and demographic trends that increase demand for health and social care. Following the UK autumn budget, resource funding is expected to grow by only an average of 1.1 per cent in real terms each year across the forecast period. For capital funding, the position is even more challenging. Scotland’s capital block grant is due to reduce in real terms by 0.3 per cent in each year to 2029-30. Nevertheless, this budget and the Scottish spending review protect and build on the substantial investments that the Government has already delivered.

Rural affairs, land reform and islands remains a strategic priority for the Government, and the budget will invest more than £1.1 billion across the portfolio in 2026-27. We will continue to provide Scotland’s farmers, crofters and land managers with the most generous package of direct support in the UK, investing more than £660 million in support for agriculture. We are continuing to invest in our livestock sector through the voluntary coupled support scheme and less favoured area support scheme. We continue to support crofting through £4.4 million for the crofting agricultural grant scheme and croft house grant scheme. We are investing £25 million in the agri-environment climate scheme to directly support action to reduce emissions and enhance nature. We also have £26 million of capital funding that is going to support transformation and reform in Scotland’s farming and food production industries.

Delivering on our climate commitments is, of course, a key priority in order to meet our legal obligations, as well as our moral obligations to future generations, and to support sustainable jobs and thriving communities across Scotland. In order to ensure that our land and forests will continue to help us to tackle climate change, protect nature and support green jobs, skills and businesses, we are investing £28 million to restore more than 10,000 hectares of peatland, and we are investing £37 million to create more than 12,000 hectares of woodland. Critically, those investments will allow us to meet our climate change plan targets.

Our island communities will benefit from a new national islands plan, with more than £7 million to support the islands programme and our carbon-neutral islands project, and £9.3 million will be invested in community-led local development.

We continue to target our marine budget towards blue economy outcomes and our responsibilities for the integrated management of Scotland’s seas. Funding of £16.6 million for the marine fund Scotland will be available to support marine businesses and coastal communities to deliver innovation and sustainable development across Scotland. That increase in the fund includes the first year of the fishing and coastal growth funding, although the approach that the United Kingdom Government has taken constrains our investment, given that Scotland’s allocation simply does not recognise the size and importance of the fishing sector in Scotland.

My priorities are clear, and I am committed to ensuring that my portfolio delivers a lasting impact for our rural, coastal and island communities and industries.

With that, I am happy to take questions from the committee.

First of all, I am proud of our commitment to maintain our direct support to farmers and crofters. I think that being able to provide that stability has been crucial, especially at a time when we have seen those payments essentially fall off a cliff elsewhere in the UK.

There have been calls from environmental non-governmental organisations and industry representatives for an increase to the budget, but we are in a situation in which we never saw the Brexit promises from the previous UK Government materialise regarding the funding that we should expect to receive. That UK Government funding has stayed flat. That situation has continued and has, in fact, worsened with the change in how funding is allocated from the UK Government to the Scottish Government.

Yes, we have maintained the budget at a similar level, but we are supplementing it with our own funding. It is important to recognise—

Well, you can look at the overall ring-fencer baseline allocation, which is £620 million—

Yes, the overall numbers have stayed the same. I appreciate exactly what you are saying about the inflationary impact of that and what it means in real terms. We have maintained the overall level, but it is hard to deliver more when we are not receiving any more from the UK as we would have done previously.

We are helping farmers and crofters to deliver more. I have talked about the funding that was provided through the national test programme for the whole farm plan, but, outwith agriculture, we also have the changes that we have made to the forestry grant scheme to increase the rates and to encourage smaller-scale planting. For example, amazing work has been done through the integrating trees network to show the wider benefits that come from planting trees on farms, for the environment and animal health and welfare, as well as for the wider business.

We are always looking at the different schemes to see what we can do to encourage more of that, whether it is about tree planting or providing support for people to undertake some of the important baselining work.

I can only reiterate what I said in previous responses. I appreciate the inflationary impact, but it comes back to the fact that we have not seen increases in allocations from the UK Government. We should compare that to the overall spend that the UK Government is now putting into the Department for Environment, Food and Rural Affairs, which I believe is heading on a downward trajectory. We have passed on the baseline allocation of funding that we get from the UK Government and have added our own funding on top of it, as well as having the other schemes to support our farmers and crofters.

I disagree with that. I am sure that my officials will correct me if I am wrong, but the overall funding that has come through in the spending review is about £820 million or £840 million over the course of the period covered by the review, which reflects about a 1.1 per cent increase in resource terms. Capital funding is also falling. In a moment, I will hand over to George Burgess, who can talk more about the impact of the funding settlement coming through the Barnett formula, as opposed to the way in which it worked before.

It is a bit unfair to lay the blame at the Scottish Government’s door when we have provided funding that is over and above the baseline allocation. Previously, we received funding from the EU, and we were told by the UK Government that it would replace that funding in full, but none of those promises ever materialised. We rely on the funding for the payments that we are able to provide to our farmers and crofters.

It is important that we work through the budget process first, but I expect the plan to come in short order after that.

I mentioned big changes, but all the information that we have about when we expect schemes to change is already published in the route map. We have made the promise about there being no cliff edges, and we absolutely stick to that. We published as much information as possible to provide a line of sight and comfort about what potential new schemes could look like. There are no big surprises.

There are a few important things to bear in mind when you look at the AECS line. What we have allocated in the budget for 2026-27 covers the previous year’s contracts, which run on a five-year basis. We not only have the funding to provide for those contracts but have enough to allow all the approved projects from the most recent round of AECS in 2025 to be funded, too.

AECS is a demand-led scheme, so you are not necessarily comparing like with like. We are able to fund all the previous contracts as well as any new ones that are entered into following the success of the 2025 round. By its nature, the line will fluctuate from year to year, depending on the demand.

In previous years, we have had to restrict the items that are available in some rounds of AECS funding because of the capital that was available at the time. From what I remember, in 2025, we expanded that slightly and we are looking to see what improvements or further expansions we could make for 2026, so you could expect that line to change in future years. However, it is important to remember that it is a demand-led scheme, which is why we see those fluctuations.