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.