Select Committee on Agriculture Appendices to the Minutes of Evidence

Annex A


  The Agenda 2000 Reforms have changed the basis on which support for farmers in the Less Favoured Areas (LFAs) can be provided. In future, LFA support payments must comply with the Rural Development Regulation (RDR). This requires the payments to be made on an area, rather than a headage basis. However, delays in introducing the RDR mean that special interim arrangements were made for Headage-based Livestock Compensatory Allowance (HLCAs) payments to be made in 2000 only. The new area-based arrangements, to be known as Less Favoured Area Support Scheme (LFASS) payments will be introduced in 2001.


  A new area-based LFASS arrangement forms part of SERAD's Rural Development Programme (RDP), which was approved by the Commission on 24 October 2000. It is intended that payments under the scheme will be made in early 2001, in line with other parts of Great Britain.

  LFASS will be partly funded by the EU and is designed to continue effective support arrangements towards the maintenance of the social fabric and employment in upland rural communities through support for continued and sustainable agricultural activity. The objectives of the Scheme are:

    —  to ensure continued land use and thereby contribute to the maintenance of a viable rural communities;

    —  to maintain the countryside; and

    —  to maintain and support sustainable farming systems which, in particular, take account of environmental protection requirements.

  The statutory authority for LFASS and the RDP is Council Regulation 1257/99 and Council Regulation 1750/1999. Appropriate legislation will be made in the Scottish Parliament to set detailed arrangements in place.

  Claimants will be expected to submit an IACS area aid application in the year prior to the LFASS payment. They must farm at least three hectares of forage land within the designated Less Favoured Areas of Scotland. Eligible activities are:

    —  beef breeding herds;

    —  sheep breeding flocks;

    —  dairy herds in the ring-fenced quota areas;

    —  farmed deer breeding herds; and

    —  herds of cashmere goats or alpaca kept for fibre production.

  Payments per hectare for 2001, as approved by the Commission, will be:

    —  Moorland Farms: £6.10 to £30.40 per hectare;

    —  Southern Upland Farms: £7.90 to £39.40 per hectare; and

    —  Northern Upland Farms: £9.00 to £45 per hectare.

  The lower rate will be paid on rough grazings and the higher rate on improved pasture with a minimum stocking density per farm category to avoid over-compensation.

  In addition, there are two environmental components which will allow producers to qualify for enhancements to the basic rates. These are a supplementary payment to extensive Mixed Farms where stocking density is 0.65 livestock units (lus) per hectare or less, and where cattle account for at least 10

per cent of eligible lus. In this event the rate will be increased by £2.50 per hectare.

  Further, in Moorland Farms, with mixed stocking, where cattle account for 10 per cent or more of the total lus, there will be an additional payment of £3.00 per eligible hectare.

  To allow for hill farmers to adjust to the new payments, and to take advantage of other income schemes that may build up under the RDP, a safety net mechanism will cushion those farmers who will lose money with the new arrangements as compared to the former ones. In 2001, the safety net guarantees that no farmer will receive less than 90 per cent of the 2000 payment paid under HLCA, provided the forage area does not decline. In 2002, the safety net falls to 80 per cent on the same basis. In 2001, the safety net is calculated either on the basis of 50 per cent of the difference between the entitlement under the new arrangements and the year 2000 payment or the safety net element paid in 2002, whichever is the smaller.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2001
Prepared 3 April 2001