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Rethinking Less Favoured Areas

The Less Favoured Areas directive is one of the few examples of British influence on the design of the CAP. It was originally conceived as the Mountain Areas Directive with France pressing for a definition that would have excluded Britain’s hills and uplands. But the British emphasis on latitude rather than altitude won the day in 1975. Other member states saw the Less Favoured Areas directive as a good route to justify more cash for their farmers and by 1995 56 per cent of the utilised area of the EU was designated as less favoured. In Scotland, 85 per cent of the farmed area has LFA status.

Not surprisingly, the Commission thinks that too many farmers get rewarded under the directive. As part of the 2005 reform of rural development policy, it tried to remove all socio-economic considerations from the delineation of the LFAs and to cut the rates of payment. But this was fiercely resisted by many member states and the issue was ‘parked’.

Now the Commission has come up with fresh proposals for a new LFA system by the end of 2008. A consultation suggests only four options:

Option 1. Maintain the status quo linking LFAs to areas of natural handicap, but excluding socio-economic criteria. This option is effectively dismissed by the Commission as failing to meet Courts of Auditors criticisms, but farming unions are saying it is the only one that is acceptable, but even then consideration must be given to socio-economic criteria.

Option 2. Set certain ‘common criteria’ for LFAs relating to natural handicaps, such as temperature, soil drainage and slope.

Option 3. As Option 2, but with each farm assessed for its environmental contribution.

Option 4. As Option 3, but with payments further limited to High Nature Value farmland.

COPA has expressed the hope that because the issue is so complex it will get bogged down in the decision-making process. However, the time has surely come to take a long, hard look at these arrangements and to see whether they deliver realistic objectives.

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2 Replies to “Rethinking Less Favoured Areas”

  1. LFA has lost much of its logic with so much land designated as less favoured. It looks very much like a way of recycling rural development money into old style farm subsidy payments.

    Much better would be if the scheme was reborn as a ‘High Nature Value’ scheme that directed money towards lands that are at risk of abandonment and where it can be proven that the kind of farming carried out is beneficial in terms of wildlife and environmental criteria.

    Leave social protection to social security systems.

  2. I essentially agree with Jack’s comment. The LFA payments system could potentially be extremely useful in supporting high Nature Value farming systems that are crucial for Europe’s biodiversity (and often to landscape etc) but that are mostly economically marginal and uncompetitive. It is also almost the only mechanism with the current CAP that can effectively overcome the “green box trap” that makes agrienvironment schemes very difficult to use for supporting HNV farming. AE payments are based on income forgone and cost incurred. So they work rather well for paying farmers that have over intensified to “clean up the mess”. On the other hand they regularly fail the traditional extensive farmers who have remained sustainable all along. If you’ve been doing good land management for centuries but are making hardly any money out of it, AE can’t help you. You have no income to forgo and doing the right things means keeping up the good work, not incurring new costs for new efforts.

    The problem is that the LFA system has been massively abused by Member States, to the point where it is mostly just another inefficient hand out. It is to be hoped that the current reform will be a real one. However, the Commission still seems to be paying too much attention to redrawing maps and too little to ensuring proper eligibility criteria. A meaningful LFA reform should at least tackle the following issues:

    – Ensure that payment goes to truly disadvantaged farmers (not areas!). Money should be targeted where it is really needed, not spread out to buy votes.

    – Ensure that support is tied to the maintenance of HNV practices- we should help farmers because their activity delivers public goods, not just because they are disadvantaged

    – Ensure that payment level actually make a difference to the viability of HNV systems- handing out a few hundred € a year is handy for the government’s image, but will not keep an extensive farm in business.

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