Evaluation of less favoured area support scheme

1. Introduction

1. To help inform preparations for the transition from Less Favoured Areas ( LFAs) to Areas of Natural Constraint ( ANCs), the Scottish Government ( SG) commissioned an evaluation of the current payment mechanism based around LFAs in Scotland - the Less Favoured Area Support Scheme ( LFASS). The aim was to establish how LFASS currently meets the goals of the Rural Development Regulation ( RDR) and ANC working guiding principles, and to review the evidence and provide proposals for the development of the new ANC scheme.

2. The exercise was desk-based, essentially comprising a review of secondary data and previous evaluation studies supplied by the SG and by members of the LFASS/ ANC Stakeholder Group (see Appendix A for list of information provided). Other relevant material was drawn on (see Appendix B), as was the collective experience of the evaluation team and the key principles agreed by the Stakeholder Group.

3. The exercise focused on five specific topics:

i. Land abandonment; the extent to which land has been abandoned over time and to establish the reasons for land abandonment.

ii. The distribution of LFASS Payments across geographical regions and agricultural sectors.

iii. The distribution of estimated new Pillar 1 Payments across geographical regions and agricultural sectors.

iv. Sustainable farming systems; what level of support is required to enable business viability and how important LFASS is to farm business and farm household income.

v. Whether LFASS has appropriately compensated farmers for income forgone and additional costs they face as a result of having LFA land.

4. Following a brief summary of the background to LFASS, the five topics are addressed in turn (ii and iii together) before some discussion and concluding comments are offered. Inevitably, given the complex inter-relationships involved, there are some overlaps between the issues considered in each section.