23 April 1999

LFAproposals could see hill restructuring

MAFF has published its consultation document on future support for Less Favoured Areas, with proposals that could signal a wholesale restructuring of hill farming.

The main thrust of the paper, which follows the recent release of similar documents in Scotland and Wales, is a shift from headage to area-based payments. There is also a proviso that subsidies would be paid only if producers farmed a minimum area in an environmentally sensitive way for a minimum five-year period.

The EU rules driving the changes come into effect on Jan 1 2000 and new UK schemes must be submitted to the EU Commission by the autumn.

Farm minister Nick Brown told FARMERS WEEKLY that, because of falling prices and rising costs, LFA producers had become increasingly dependent on subsidies and it was neither feasible nor desirable to insulate farming in these regions from the impact of market forces.

"The current situation could not be maintained and, therefore, tying payments to a historic reference year was not an option."

Mr Brown accepted that switching to area aid would mean a redistribution of payments and that some farmers would lose out.

For that reason, although a flat rate payment per hectare was not ruled out because it could give farmers the freedom to diversify, the consultation document suggests differentiated payment rates from a minimum of k25/ha (£16.50/ha) up to k200/ha (£132/ha).

One option for the new payment regime would be a basic payment, with top-ups for producers meeting more stringent measures.

The consultation document also seeks views on the idea of higher payments made to producers with mixed stocking regimes.

Mr Brown concluded that he was wholeheartedly behind the move from headage to area payments>But he sympathised with the Tenant Farmers Association concerns (News, Apr 16) that tenants would lose an important asset to their landlords if subsidies moved to area payments.

"The payments are intended as a producer support and the point of the consultation exercise is to establish a way that it remains in the hands of the producer but without distorting market payments," he said.