The Board of Agriculture for Scotland was established in 1912 by the Small Landholders (S) Act, 1911, with the chief purpose of encouraging the development of small holdings on private estates. The general effect of this Act was to extend to the whole of Scotland, with a number of important modifications, the provisions of the Crofters Holdings (S) Act, 1886 and the Congested Districts (S) Act, 1897, which had applied only to to the crofting counties. Estates acquired by the Congested Districts Board to provide land for crofters and cottars or to assist migration to new settlements in the Congested Districts were transferred to the new Board.
Land settlement activities were largely suspended during the First World War, when the Board's efforts were concentrated on food production. New powers were, however, conferred on the Board by the Small Holding Colonies Acts, 1916 & 1918, and the Sailors and Soldiers (Gifts for Land Settlement) Act, 1916, for the creation of holdings for discharged servicemen and the purchase of land for the purpose. The Land Settlement (S) Act 1919 extended the scope of the Small Holding Colonies Acts, and gave the Board powers of acquiring land by purchase, either by agreement or compulsorily and provided a new code for the creation of allotments. In December 1932 a scheme was introduced for providing plots of land for cultivation by unemployed persons in industrial areas.

The Congested Districts Board was constituted under the Congested Districts (Scotland) Act, 1897 to take such steps as they thought proper for aiding and developing agriculture; providing seeds, implements and machinery; providing land for sub-division among crofters and cottars in congested districts; aiding migration of crofters and cottars from congested districts to other places in Scotland; aiding and developing fishing; aiding the providing or improving of lighthouses, piers or boat-slips, public roads or bridges; aiding and developing spinning, weaving and other home industries and subject to the consent of Treasury, aiding the providing or improving of harbours. The functions of the Congested Districts Board were transferred to the Board of Agriculture for Scotland in terms of the Small Landholders (Scotland) Act, 1911.