Welsh farming organisations are warning the planned end of the Tir Mynydd subsidy scheme will force many farmers to reconsider their future.
Introduced in 2001, the 36m-a-year scheme is part of the Wales Rural Development Plan which replaced the Hill Livestock Compensatory Allowance Scheme.
But there are no plans to replace the scheme once it terminates on 31 December.
The decision is based on an independent evaluation of the plan commissioned by the Welsh Assembly that concluded the scheme did not represent a reasonable use of taxpayers’ money.
Consequently Carwyn Jones, the Assembly’s rural affairs minister, confirmed that the Tir Mynydd scheme will not form part of the next RDP.
In future, farmers in less favoured areas will have to access the money through agri-environment activity.
The Assembly is now consulting the industry on whether it should be ended abruptly or over a two year period.
But Mary James, deputy director of NFU Cymru, defended the scheme.
“Over 80% of Wales is designated less favoured and the average 3587 a year payment received by eligible farmers is needed to offset the management problems and higher costs of coping with LFA conditions.
“There is no way they will be able to recoup the money through agri-environment payments.
We are concerned that there is no suggestion that farmers in the rest of the UK will lose their LFA payments in the near future, so Welsh producers will be less competitive.”
One farmer affected, Hedd Pugh, who farms one of the toughest hill units in Wales, will lose 15% of his total income.
This is in addition to a 25% cut in some payments claimed through the Tir Gofal agri-environment scheme.
“There is now more pressure on a hill farm like this than there was when HLCAs were introduced,” Mr Pugh insisted.
“We reduced stocking to qualify for agri-environment payments and any further cuts will damage the landscape.
“Within 10 years the walkers for whom we are expected to provide access will find themselves fighting through waist high bracken, brambles and scrub.”