Scottish Rural Development Programme 2014-2020: ex-post evaluation - annex A scheme summary report

11. Less Favoured Area Support Scheme

Scheme description

The Less Favoured Area Support Scheme (LFASS) aimed to contribute to the maintenance of the countryside and viable rural communities by ensuring continued agricultural land use and maintaining and promoting sustainable farming systems. LFASS compensated the farmers and crofters who farm in the most disadvantaged areas of Scotland with annual area-based payments.

LFASS is an area based payment scheme based on eligible land which is classified as either Disadvantaged or Severely Disadvantaged. In addition, there is a multiplier for livestock numbers based on a historic method. LFASS essentially compensates farmers for farming on land that has natural constraints. Around 86% of farmland in Scotland is designated as an LFA.

Public expenditure

The LFASS was programmed to contribute to various Priorities and FAs as follows:

• Priority 2 (Enhancing farm viability and competitiveness of all types of agriculture in all regions and promoting innovative farm technologies and the sustainable management of forests), and to FA 2A.
• Priority 4 (Restoring, preserving, and enhancing ecosystems dependent on agriculture and forestry) and to FA 4A, FA 4B, and FA 4C.

Note: all financial and performance data for Priority 4 and associated FAs are presented in the AIR 2023 in aggregate form. This is due to how the monitoring data was required by the EC.

A summary of the public expenditure achieved by LFASS is provided in Table 11.1. Under the SRDP 2014-2020 final co-financed payments were made to LFASS beneficiaries in 2022.

Source: Scottish Government, Annual Implementation Report 2023.

Performance indicators

A summary of the aggregated outcomes achieved by the LFASS is provided in Table 11.2. Table 11.3 then provides details of annual outcomes where figures cannot be aggregated.

Source: Scottish Government, Annual Implementation Report 2023.

Source: Scottish Government, Annual Implementation Report 2023.

Scheme evaluation

To help inform preparations for a potential transition from LFAs to Areas of Natural Constraint (ANCs), the SG commissioned an evaluation of the current payment mechanism based around LFAs in Scotland - the LFASS. The main aim of the evaluation 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.

The scheme evaluation was undertaken by the Rural Development Company Ltd and published by SG in 2016 ahead of the UK EU membership referendum in June 2016. The evaluation findings were set in the context of continued EU membership and the implications for Scottish famers and crofters in anticipation of the EC’s move to an ANC scheme.

What worked well and/or less well

SG officials reported a key strength of the LFASS was that the scheme has not changed much since it was first established. This was viewed positively from a continuity and stability perspective. SG officials hold the view that the scheme has kept supported businesses viable and sustainable – it has done this by supporting people to farm on difficult land in sparsely populated fragile communities.

Lessons learned

SG officials told the study team that whilst LFASS was a SRDP scheme it is really a direct payment that has provided stability for farmers and crofters. As a result, it functions slightly differently, with little change but it is vital to safeguarding crofting and farming in fragile areas.

Simplification is needed in scheme administration. However, from a stakeholder perspective SG officials reported that farmers and crofters like the scheme as it is and do not want too much change. SG officials told the evaluators that you get a bigger reaction changing anything on LFASS than any other thing. They like the stability for farmers and the reassurance. Going forward the principle of simplicity for applicants must remain but a view provided was that it needs simplified for staff administering the scheme.

SG officials reported that scheme payments are historic based on stocking density and that this could be reviewed, albeit they recognised that this is not easy to change.

A social research study was commissioned by RESAS in September 2024 to specifically look at the opportunities and motivations for the uptake of specific sustainable and regenerative agricultural practices amongst LFA farmers and crofters. Four specific practices were identified for assessment in the research, including:

• carbon emissions reduction measures, including carbon audits, soil testing, and livestock efficiency measures.
• peatland restoration.
• tree planting and woodland natural regeneration.
• biodiversity measures, including permanent and temporary management practices.

The specific research questions for the LFA social research project are:

• what are the differing motivations of LFA farmers and crofters for uptake of sustainable and regenerative practices (carbon emissions reduction measures, peatland restoration, tree planting and woodland natural regeneration and biodiversity measures), and how do they differ from established typologies of adoption factors?
• what barriers do LFA farmers face to get there (including land tenure issues), and what opportunities are currently available to them?
• what are the current best practices of LFA farmers and crofters in taking up sustainable and regenerative agricultural practices?
• what future opportunities or incentives (financial, administrative, other) would be needed to encourage uptake of different or novel sustainable and regenerative practices?

Current status of the scheme

The LFASS continued to be funded in the SRDP domestic programme to 2024.

For 2025-2026 LFASS will continue under the present support model with continued payments.

From 2027 onwards future support for LFA will be moved to Tier 2 of the new Agriculture Reform Framework. Future policy work to determine what LFA support will look like will take an evidenced based approach that builds on internal expertise and ongoing stakeholder engagement. In addition, it will consider the findings of the following two pieces of research:

• Scottish Island Regions Review (James Hutton Institute, 2023)
• the LFA Social Research study (described above).