In this article Lyndsey White talks about the economic potential within Scotland’s land-based businesses, how it is considerable and that the challenge facing landowners is how they can most effectively realise this in a way which works for them.
This is not just about farming and forestry. These are enterprises with many tentacles, the foundations upon which numerous industries are built. And - in spite of many misconceptions - they have a pivotal part to play in building a stronger and more sustainable future, from ensuring the nation’s food security to green energy. All along the way securing jobs and building community wealth.
Scotland’s multi-billion pound, internationally-celebrated food and drink sector - from quality-assured Scotch beef, lamb and pork to whisky that is exported all over the world - is rooted in our land-based businesses.
It is also vital to leisure and hospitality, providing the ingredients and experiences which make visits and staycations around the country special and unique.
Agritourism has become a sector in itself, with farms and estates increasingly places where people visit to stay, with glamping pods and country retreats adding yet another attraction to the visitor industry, as well as being an invaluable source of diversification for many rural enterprises.
Scotland’s drive to net-zero would be far weaker were it not for the opportunities that our land possesses for renewable energy production, whether that be wind, solar or hydro-power. Opportunities in forestry, carbon storage and peatland restoration show no signs of slowing either.
In some areas, there may also be the possibility to help tackle rural housing issues by utilising buildings or land for new developments.
Without land-based businesses, Scotland’s economy will not grow at the pace the nation aspires to. That opens possibilities for greater economic growth for landowners, including through diversification.
Following years of relatively smaller-scale projects - including farm shops, farm parks or modest renewables initiatives - we sense that the next wave of diversification will be on a larger scale.
To maximise the economic benefits of a new venture - whether they be to supply meat through livestock production or provide land for a renewables scheme - it is vital that every move has a sound legal structure behind it and that specific legal requirements are fully understood.
When it comes to renewables and forestry, be sure to have taken proper advice about the long-term implications of any project, whether they be about supporting infrastructure, access or tenants’ rights. A sensible starting point is to ensure you are clear on how much land is needed. It is thought that about 25 acres is required for every five megawatts of power produced.
Whether you are looking at wind, solar or hydro, space will be needed for critical support equipment such as battery storage. With all of that, a detailed understanding of access and services is needed. Might cables need to be run over land that is not yours? What agreements might that mean you need to have in place? You also would not want to find yourself unable to work as you need with livestock or lose access to certain areas because you have not fully understood the detail around rights on that front or, indeed, whose responsibility infrastructure is. Tenants’ rights can also be a factor where agricultural or other leases are in place. How might they be affected?
If you are redeveloping existing buildings or building new ones, do you understand what legal permissions need to be obtained and what the opportunities - and constraints - of them are? Does what you are planning for constitute a change of use? Do you need to factor securing that into what you are doing?
And what might all that you are venturing into mean for succession, undoubtedly one of the hottest topics in land ownership with debate over the UK Government’s impending inheritance tax threshold change showing no signs of abating?
Whatever the policy backdrop, our general advice remains that obtaining early legal, tax and financial advice is crucial for every aspect of business.
Diversification for land-based businesses is about economic growth. But it’s about resilience too. Securing the professional, tailored advice you need is an investment that will pay off by making your enterprise resilient and successful.
Lyndsey White is a Senior Associate in our Rural - Land and Business team, which advises landowners and farmers across Scotland.
Published 17 March 2025
