<b>Changes to ‘Greening’ Support in an Orkney Islands Context: Ecological Focus Area extension.</b>

<p dir="ltr">This report investigates the implications of significant changes to Scotland’s agricultural ‘Greening’ support regime in the form of Ecological Focus Area (EFA) requirements and their impacts on Orkney’s farming and crofting systems. </p><p dir="ltr">From 2026, the Scottish Government will remove long-standing derogations that have exempted most Orkney businesses from at least some EFA obligations. These changes, aligned with the transition to a four-tier agricultural support framework, are expected to substantially affect land management practices. Official data and three farm case studies are used to illustrate impacts.</p><p dir="ltr"><b>Key Findings</b></p><p dir="ltr"><b>Major Policy Shifts in EFA Rules.</b> From 2026, all farms and crofts with more than 15 hectares of arable and temporary grassland must allocate 5% of that land to EFAs, possibly increasing to 7% in 2027. Longstanding exemptions for farms with smaller arable areas and for grassland-dominated systems will be removed, resulting in a dramatic expansion in the number of Orkney farms subject to EFA rules and hence compliance burdens (in terms of both opportunity costs and resource costs). </p><p dir="ltr"><b>Category definitions (‘agri-semantics’).</b> A blanket application of new EFA requirements across the existing three payment regions risks attaching the same obligations to very different payment rates depending on context. This suggests that some refinement of categories may be needed to distinguish between (e.g.) permanent grassland in different locations, or indeed different vintages of temporary grass. </p><p dir="ltr"><b>Incompatibility of EFA Options with Orcadian Conditions. </b> Many existing EFA measures were developed with arable cropping systems in mind and are ill-suited to Orkney’s grassland-based systems. Biophysical constraints and infrastructure limitations restrict practicable EFA options (a traffic light assessment suggests mostly red and amber).</p><p dir="ltr"><b>Disproportionate Impact on Orkney Businesses. </b>Orkney has one of the highest shares (c.60%) of temporary grass within ‘arable’ land (60%), reflecting rotational practices not well captured by current EFA design. The new rules place the same obligations on grass-dominated systems as they do on annually cropped land, despite differing environmental baselines and operational contexts. </p><p dir="ltr"><b>Future Conditionality on Permanent Grassland (PGRS).</b> The Scottish Government has signalled intent to extend EFA-type requirements to PGRS, which constitutes a large share of Orkney’s agricultural land. Analysis shows that, depending on threshold levels, between 50% and 80% of Orkney’s 645 PGRS-claiming businesses could be required to comply, potentially affecting over 2,800 hectares. Alternative thresholds or adjusted EFA weightings may better align with Just Transition principles and mitigate burdens on small- and medium-sized enterprises.</p><p dir="ltr"><b>High AECS Engagement Creates Risk of Double Funding and Policy Conflict.</b> Orkney has the highest proportion of businesses enrolled in the Agri-Environment Climate Scheme (AECS), with 35% receiving payments in 2021. Given policy overlaps between AECS and EFA measures, this raises potential problems of ‘double funding’ and participation in either scheme, which may undermine overall policy coherence. </p><p dir="ltr"><b>Advisory capacity constraints. </b>The complexity of new rules and their interactions with other policy requirements (including AECS but also LFASS and coupled headage support) is likely to increase demand for advisory support. However, advisory capacity is already stretched. </p><p><br></p>