Less Favoured Areas scheme

A commitment to maintaining Less Favoured Area Support Scheme (LFASS) funding at least at 80% in 2020 has been reiterated by Rural Economy Secretary Fergus Ewing.

Following changes to EU law, industry bodies and key influencers were consulted on whether to move away from LFASS towards an Area of Natural Constraint scheme and the response was not to do so.

Speaking during a Scottish Parliament debate into future rural policy, he said:

“I am acutely aware of the continuing importance of LFASS for farmers and crofters operating in the most remote and marginalised areas. Unlike England and Wales, who discontinued their equivalent schemes some years ago, Scotland continues to provide this additional financial support that acknowledges the difficulties for some farmers, particularly in hill and upland areas, and crofters.

“I was pleased last year that the EU delayed the changes to LFASS, meaning that we were able to continue to pay 100%, helping rural businesses with cash flow for the coming year. However, the reduction to payment rates for 2019 and 2020 is required by EU law, though the change in payment levels will not affect farmers and crofters who receive the minimum payment of £385, as this is not being reduced.

“The continuing uncertainty over Brexit is not helpful. We are having to transition out of LFASS without being able to create a new system to move into. I consulted industry bodies and key influencers on moving to the Area of Natural Constraint scheme shortly after the EU referendum vote and the majority response was not to do so, particularly in the light of Brexit.

“As I have previously said, any additional funding arising from the convergence review, will be prioritised for this purpose – if there is sufficient monies, we will effectively reinstate LFASS funding levels to 100%. In the meantime, I remain absolutely committed to maintaining LFASS at the 80% funding level into 2020.”

Background

For 2020 the EU regulations currently require a further reduction to 20%, which Scottish Government has consistently said is unacceptable. The European Commission recently announced a proposed change to regulation which could see that payment rise to 40% of current rates.

Mr Ewing discussed the possibility of any further flexibilities in the proposed regulation when he met Commissioner Phil Hogan when he was in Brussels in December and has lodged proposed amendments, which we expect the UK Government to fully support. Should this not be accepted, we continue to look at ways of replacing this funding, within the context of continued cuts to the overall Scottish Budget. This work will of course involve the input of stakeholders such as the NFUS and National Sheep Association Scotland.