Union Committee Hits Out at Possible LFA Funding Shift

NFU Scotland’s Less Favoured Areas Committee has hit out at suggestions that the delivery of an important stream of European funding that is crucial to many of Scotland’s farmers and crofters could be altered as a consequence of forthcoming CAP Reform discussions.

Almost 85 percent of Scotland is recognised by Europe as being disadvantaged.   This allowed payments under the Less Favoured Area Support Scheme (LFASS) last year to deliver £64 million to almost 13,000 businesses in these areas, underpinning the economic, social and environmental benefits being delivered by farming and crofting in these parts.  In the most disadvantaged areas, the relative importance of LFA support to a business increases to the point where it is critical to the survival of many active farming units.

At the moment, LFA funding at a European level is delivered as part of the rural development pot, known as Pillar 2 of the CAP.  Several European documents related to the planned CAP Reform in 2013 have suggested that such funding should be shifted to Pillar 1 – the pot of European funding that currently delivers direct payment schemes such as the Single Farm Payment (SFP).  

The Union’s LFA Committee is adamant that LFA support must remain as a rural development measure delivered through Pillar 2.  This is crucial if LFA support is to continue to deliver a wide range of benefits to Scotland’s rural economy and landscape.

LFA Committee chairman, Sandy Tulloch said:

“Recent statements of where LFA support might fit into a future CAP are causing real concern.  We are adamant that there is a clear case for continued LFA support and that it should remain separate but complementary to Pillar 1 payments, such as SFP, and the other elements of Pillar 2, such as agri-environment schemes.

“In essence what we believe is necessary is a revised LFA scheme which encourages sustainable economic activity within a vibrant rural economy provided by an active farming and crofting body.  To achieve this, there is an overwhelming need to retain LFA support as a stand-alone Pillar 2 measure. 

“LFA support is distinct from other types of support available to farmers and crofters and should remain so.  Although it underpins much of the agricultural activity in the LFA, it is much more than simply a production, agri-environment or social payment.  LFA payments compensate for the natural disadvantage by covering the additional costs and income foregone related to the natural handicaps faced by many farmers.   As such, they merit being viewed as distinct and separate to any area-based direct payment scheme such as the SFP.

LFA farming is inherently vulnerable to wider market forces with low productivity in these areas, fewer opportunities for diversification and fewer comparative advantages.  Rolling LFA support into Pillar 1 runs the unacceptable risk that incomes could fall, businesses could collapse and land abandonment and rural depopulation may accelerate.   That is not an acceptable vision for the large areas of Scotland regarded as disadvantaged.”

Notes to editors

  • At the most recent meeting of NFU Scotland’s Less Favoured Areas Committee, it agreed that what is necessary from CAP Reform discussions is a revised LFA scheme.   This must encourage sustainable economic activity within a vibrant rural economy such that appropriate public goods could be provided by an enthusiastic farming industry with the necessary capacity to deliver.  For these reasons, the Committee where strongly committed to the need to retain LFA support as a Pillar 2 measure.
  • In addition to this overarching rationale, the Committee also listed the following as clear reasons to retain LFA support as a rural development measure
  • to protect budgets (co-financing)
  • to prevent land abandonment and de-stocking
  • to underpin activities that clearly delivered public benefits
  • to retain non-competitive access to Pillar 2 support for farmers/crofters less able to access Rural Priorities
  • to recognise the relative importance of LFA support to more marginal farm businesses
  • to better target funds to areas of greater need that were also directly associated with public benefits
  • to retain/maintain the capacity to produce on more economically vulnerable units, rather supporting production per se
  • to help secure the carbon locked up in Scotland’s peat-rich soils through sustainable grazing management.


Contact Bob Carruth on 0131 472 4006


Date Published:

News Article No.: 147/10

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