Grants of up to £20,000 to help farmers and crofters invest in their businesses and modernise operations will open for applications from winter 2026, First Minister John Swinney has announced.

But the Scottish Crofters Federation says that, while some improvements have been made to the scheme, questions remain about the fair allocation of funds

At least 725 farming and crofting businesses will share £14.25 million as part of the next round of the Future Farming Investment Scheme. The funding will support a range of initiatives, including improving soil quality, creating hedgerows and upgrading livestock management infrastructure.

New entrants to farming, businesses based in the Highlands and Islands and projects delivering environmental benefits will be eligible for enhanced rates of support.

Mr Swinney said:“Farmers and crofters play a vital role in producing food, supporting jobs and caring for our natural environment. That is why we are doing everything we can to ensure rural Scotland and our food and drink sector continue to thrive.

“This funding will have far-reaching benefits for agricultural businesses. It will help farmers and crofters invest in new equipment, modernise their operations and respond to the challenges posed by climate change, including increasingly frequent extreme weather events.

“The next round of this scheme has been shaped by feedback from farmers and crofters and reflects our commitment to supporting a competitive, sustainable and resilient agricultural sector.”

The Future Farming Investment Scheme will help farming and crofting businesses with the cost of select items. A list of eligible items will be published ahead of the scheme opening.

Most applicants will receive funding covering 50% of eligible costs. New entrants to farming will be eligible for funding of up to 80% of eligible costs, while businesses based in the Highlands and Islands will be eligible for up to 60%. Items delivering environmental and nature benefits will be eligible for funding of up to 100% of eligible costs.

The maximum grant value available under the scheme is £20,000 per business, regardless of size.

The SCF has urged the government to ensure that this list covers machinery and items requested by crofters in the last round that are not covered by the Crofting Agricultural Grant Scheme.

The SCF says: "We are pleased to see that the government has taken on board our plea to offer a higher intervention rate of 60% to island businesses, given the higher costs these businesses face. We also welcome higher intervention rates for new entrants and items delivering environmental benefits.

"However, much will depend on how applications are scored and weighted in practice. The last round was extremely disappointing, leaving most crofters who applied empty-handed, including many who belonged to multiple priority groups at once, such as small and island businesses, tenants and young crofters.

"At a meeting with government officials last month, we made clear that this year’s scheme must:

• distribute the FFIS budget fairly across the whole country and give crofting applications a genuine chance
• allow common grazings committees to be eligible to apply under the scheme
• provide clear guidance on which items are eligible under FFIS and CAGS respectively

When FFIS was announced last year, the selection of island and smaller businesses as priority groups was seen as a positive. The disappointment arose from the fact that these groups were not effectively prioritised. The government has now done away with the concept of “priority groups”, yet concerns remain that the scoring mechanism will favour larger-scale businesses in particular areas of the country, just as it did last year.

SCF Chief Executive Donna Smith said: “We urge the government to make the scheme equally accessible to all parts of the sector, including small businesses and grazing committees.”

Furthermore, in the 2025 round, messaging about items eligible under FFIS and CAGS respectively appeared to be mixed and confusing for crofters in some instances. Mrs Smith continued: “We expect clear guidance to be issued for crofters, setting out which items are exclusively available under the FFIS route, which are exclusively available under CAGS, and which are available under both schemes. In any case, FFIS is not an alternative to CAGS, and current funding under CAGS must be maintained.”