Rural Business Diversification

Rural Business is widely recognised as one of the most challenging sector to work in. What I have always admired is the resilience and adaptability of those in the industry, continually adjusting to evolving market conditions. Diversification from traditional rural enterprises is often essential, providing financial stability and new revenue streams. However, it can also stem from passion, recognising a market opportunity or creating roles for family members who might otherwise seek employment elsewhere.

Regardless of the motivation, diversification projects come with their own unique challenges, from regulatory hurdles to financial planning. In Scotland, the regulatory landscape for estate and farm diversification is constantly evolving. The Country is still adjusting to post-Brexit policies, many of which continue to emerge. At the heart of most new regulations is a focus on climate change and sustainability, exemplified by the National Planning Framework 4 (NPF4). NPF4 prioritises sustainability, climate action and biodiversity, meaning any landowner looking to diversify must align their plans with these goals.

Many landowners hope that the promised ‘eco schemes’ will offer financial incentives for sustainable practices. These schemes could encourage diversification into organic farming, rewilding or farm-based eco-tourism. However, to access available grants and funding, landowners will likely need to provide clear evidence of how their projects contribute to sustainability.

While environmental regulation is necessary to protect our natural resources and meet sustainability targets, it must also support growth. The government has pledged to reduce regulatory burdens while fostering economic expansion, but how this will be achieved amid economic pressures and trade commitments remains uncertain.

While broader trends and factors certainly shape the direction which businesses in the rural sector take, it’s the personal, tactical decisions and the professional guidance obtained that can make a real difference on the ground.

From my perspective, having practical, on the ground knowledge of the rural sector and the day-to-day operations and challenges of running rural business, as well as being a professional adviser, I can see how much value there is in leaning into network of peers and experts who understand the unique challenges and opportunities within the rural sector.

Davidson Chalmers Stewart is well known in the rural business sector, providing legal and commercial advice on a wide range of issues including diversification projects. We have specialist expertise in the environmental, residential development and renewable energy matters. What truly sets us apart is our deep understanding of the rural sector and the daily realities of running a rural business.

This article was originally featured in the Spring 2025 edition of LandBusiness magazine.

Disclaimer 
The matter in this publication is based on our current understanding of the law.  The information provides only an overview of the law in force at the date hereof and has been produced for general information purposes only. Professional advice should always be sought before taking any action in reliance of the information. Accordingly, Davidson Chalmers Stewart does not take any responsibility for losses incurred by any person through acting or failing to act on the basis of anything contained in this publication.