Rural Exchange

Island Agriculture

Rural and Agricultural Development: Maximising the potential in the islands of Orkney, Shetland and Outer Hebrides

This SRUC research brings together data analysis and the views of island communities in Orkney, Shetland and the Outer Hebrides to explore the potential impacts of agricultural and land use policy changes for communities across the island groups.  The report was commissioned by the Orkney, Shetland and Outer Hebrides Local Action Groups in collaboration with Orkney Islands Council, Shetland Islands Council and Comhairle nan Eilean Siar and Highlands and Islands Enterprise. It was funded by the Scottish Government’s Community Led Local Development Collaboration Fund, as part of the Scottish Rural Development Programme.

The findings confirmed that agriculture accounts for a higher share of private businesses, turnover and employment and population in these communities compared to other local authorities in Scotland, and that there are differences both within and between the island groups.  The research highlights that in their current form, future policy proposals present some challenges for some island economies, environments, and communities.

The research built on research and expertise within the Scottish Government’s Environment, Natural Resources and Agriculture Strategic Research Programme 2022-2026 – in particular the NISRIE, ReRIC and ‘Modelling the socio-economic, greenhouse gas and natural capital impacts of land use policy and opportunities’ projects.  Without access to a wide range of official Scottish Government data the added value that this project offers would have been impossible.

A short summary paper with selected data tables is available for downloading here.  The extensive report can be downloaded in full below or by clicking on the following links to report sections:

Presentations made to officials, elected members and Local Action Group members in each of the island groups in May 2024 that summarise the key data from the research findings for each area are also available.

The research highlighted that:

  • Agriculture has important local multiplier effects on island economies, along local supply-chains and into the wider rural economy. Moreover, farming and crofting are important aspects of local culture. 
  • The Island areas contain a high proportion of nationally and internationally important habitats, species and peatlands reflecting the unique interaction between land management and nature in our islands. A prosperous farming and crofting sector matters economically, environmentally, and socially in our three island areas. 
  • The agricultural sector across all three island groups is constrained by several critical factors, including: the unreliability and higher costs of haulage of inputs to and selling outputs from islands; uncertainty over future provision of ferry services; an ageing and shrinking workforce: and inflation impacts that have eroded the Government’s financial support for farmers and crofters.
  • There has been long term consolidation of the number of farms and crofts receiving agricultural support across the three island areas, with some localised declines in agricultural activity, most notably the decline in sheep production in the Outer Hebrides.  Complexity and compliance costs of policy proposals may lead to further withdrawal from support structures and activity, particularly for small scale producers.
  • Practical and policy solutions need to be found to retain agricultural and environmental activity in respect of crofting and common grazings, particularly in Shetland and the Outer Hebrides.
  • Evidence on the impacts of peripherality and distance from markets must be embedded in future support schemes such as evolutions of, for example: the Less Favoured Area Support Scheme (LFASS) & the Scottish Suckler Beef Support Scheme (Island Calf Scheme)
  • The report findings indicate that a thorough Islands Community Impact Assessment (ICIA) is likely to be needed in relation to the combined effects of different strands of future agricultural policy interventions, and the delivery of the ‘Rural Support Plan’. Future ICIAs should be place-based and should take into account differences within island groups, acknowledging the additional costs of transporting goods to outer isles for example. 
  • Community Led Local Development (CLLD) has a critical role to play in sustaining island communities, particularly by sharing solutions and experience across island groups. This is amplified by the low business base meaning that community solutions are all the more important to overcome challenges. The current allocative model for funds from Scottish Government places limits on capacity building and leads to uncertainty for paid staff and volunteers. A return to multi-annual funding is needed. 
The full report can be downloaded directly using the link on the link below:

Further Reading

More within the Island Agriculture project


Agricultural Support Payments

The Agricultural Support Payments section of the SRUC report


Research Presentations

As part of the project outputs the findings from Shetland, Orkney and Outer Hebrides were presented to Local Authority staff...[more]

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