SCOTLAND'S rural economy faces its greatest challenge for generations in Brexit – and the potential constitutional changes that could follow.

Speaking at Scottish Land and Estates' annual conference in Edinburgh on Tuesday, the landowner organisation's chairman David Johnstone said that rural businesses would have to demonstrate "unprecedented creativity" to adapt if they are to survive and thrive in the turmoil ahead.

Mr Johnstone suggested that would mean businesses widening their focus beyond the primary industries such as forestry or agriculture, and embracing fundamental change in how they make their money. To achieve this, he urged government and rural business to work together "as never before" to ensure rural communities and businesses are not left behind in the rush of change.

“We are living in an era of huge volatility and whatever the outcome of Brexit and the constitutional situation, change is inevitable," he warned. "Rural businesses themselves will have to lead the way as government cannot do it all.

“We are moving towards a situation where there will be less money available through direct support, whether it be channelled from the European Union or a domestic source. That will mean increasing the profitability of rural businesses will be key to ensuring that they are robust to withstand the challenges."

In a nod towards Defra's stated preference for more of the farm support budget to be tied to environmental targets, he suggested that whatever public funding remained after Brexit available was likely to be directed differently, at the expense of old-style production supports.

“Where the government can assist our rural areas is in providing the infrastructure we need to do business, which unleashes the entrepreneurial potential within the countryside," he suggested. "Better connectivity, including transport and electronic communications, is key to the success of business change.”

Lyn Forbes, one of the owners of Loch Ness Shores, an award-winning camping and caravanning site, also explained to conference attendees how they had equipped themselves to face the challenges posed by future change.

Opened in 2013 in the village of Foyers on the loch’s southeast shore, the area occupied by Loch Ness Shores was originally part of a farm. Historically, a local aluminium smelter had employed 500 people in the area, but after its closure in 1967, the village had one into decline. With a growing awareness that tourism provided the best opportunity for sustainable growth in an area of outstanding beauty, the Forbes family decided to diversify. They now boast a 5-star accreditation from VisitScotland, World Host status and a Gold Green Tourism Award.

Mrs Forbes said: “It had been obvious for a number of years that the farm was too small to be sustainable, so my husband Donald looked for other opportunities within agriculture to supplement his income. However, as rumours spread that the village shop was going to close, we were determined that we must use our assets to help the community, existing and new businesses and also establish a sustainable business for ourselves.

“The time taken to navigate the planning process was a real challenge, and at times it appeared that hurdle after hurdle was being placed in our path," she recalled. "However, our success means we now employ four full-time and four part-time staff, with a further six jobs in the summer – most of whom are employed from the local area.

“Businesses such as ours need to be making choices now that will serve them well for the next decade and beyond.”

By Gordon Davidson

For in-depth news and views on Scottish agriculture, see this Friday’s issue of The Scottish Farmer or visit www.thescottishfarmer.co.uk