The EU Commission is heading for a major showdown with farming organisations and agriculture ministers over the reclassification of Less Favoured Areas.

The last attempt to revamp the LFA system, which the commission believes rewards far too many farmers across the EU, was made in 2005 as part of the reform of rural development policy.

In particular, it wanted 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 at the time and was eventually “parked”, with the existing LFA system rolled over until January 2010.

The EU Commission also had to come up with fresh proposals for a new LFA system by the end of 2008, and as part of that process it has just launched a new consultation.

“Since 1975 the eligible areas have tended to increase and the delimiting criteria to become more and more varied,” it notes. This has led to disparity of treatment between member states and the aim is to make the system more transparent and controllable.

The consultation therefore sets out four options:

  • Option 1 – maintain the status quo linking LFAs to areas of natural handicap, but excluding social-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 farms also assessed for its environmental contribution
  • Option 4 – as Option 3, but with payments further limited to High Nature Value farmland

UK farming organisations have made it clear they want to see as little disruption to the current system as possible post-2009.

NFU Scotland says it can only accept Option 1, and is adamant that the socio-economic criteria are retained when delineating the LFAs, which make up 85% of the farmed area.

“LFA is absolutely crucial, not just to Scottish agriculture, but also to all of its rural areas,” said NFUS head of rural policy, Jonnie Hall. “Consideration must also be given to socio-economic factors, such as distance to market and peripherality that inevitably handicaps Scotland’s LFA farmers through additional costs.”

But the EU Commission is adamant that maintaining the status quo is not an option. In its consultation it effectively dismisses Option 1, saying it would not achieve the objectives set out by the European Court of Auditors to contain the system.

European farmers’ organisation COPA says there is a big battle ahead, not least because of the complexity of the issue, but because it is a high profile and political subject. “With a new team of commissioners, a new European parliament and a review of the whole EU budget to come next year, the chances are it will get bogged down,” said policy adviser Ingeborg Bromee.

With regards the socio-economic criteria, COPA believes there may be a case to update some of the data, but not to drop it altogether.