Scottish Government

Less Favoured Areas Support Scheme
LFASS 2005

EXPLANATORY NOTES

1. About the Less Favoured Areas Support Scheme (LFASS)

Legal Basis of the Scheme

1.1 The Rural Development Regulation EC 1257/1999 emerged from the Agenda 2000 Common Agricultural Policy (CAP) Reforms. It allowed member states to introduce systems of support in the Less Favoured Areas to replace the Hill Livestock Compensatory Allowance Scheme (HLCA). The EC Regulation did not allow LFA support to operate on a headage basis beyond 2000, and required payment after that to be made on an area basis.

Support Arrangements

1.2. The four main elements of the 2005 scheme are:

Grazing Category: Eligible Agricultural Activity in 2001

Grazing categories introduced in 2003, were allocated to your land based on stocking densities calculated using the eligible land and agricultural activity of the business which farmed it in 2001, the reference year. We will again use this information to determine your hectares eligible for payment under LFASS 2005 (see paragraph 10.4 of these Notes).

Environmental Elements

The Scheme includes three significant environmental measures. As before:

• to qualify under LFASS you must comply with SEERAD's Good Farming Practice Guidelines at Annex C of these Notes.
• we will enhance the number of eligible hectares for those producers with a clear bias towards cattle. For LFASS 2005, this will apply to you if you have 10% or more of your LFASS eligible livestock units as eligible cattle in 2004 (see paragraph 10.5. of these Notes).
• to qualify for payment, you must also comply with the five environmental controls introduced last year, and outlined at Annex D.

Payment Rate

The payment rates fixed for LFASS 2004 will be rolled forward for LFASS 2005. This means that we will continue to use: the fragility markers introduced under the 2003 scheme; the location of your main farm; and the grazing category of your land, to determine which rate(s) apply to your LFASS 2005 entitlement. The payment rates are detailed in the table at paragraph 10.6. of these Notes and you will find the parish list showing fragility markers at Annex E.

Minimum Payment

Under LFASS 2005, eligible producers will receive no less than 350. This means that if your area payment is less than 350, we will add on an additional sum to bring the total due to 350 (see paragraph 10.8 of these Notes).

2. Your Claim

2.1. There is no separate claim form for LFASS 2005. You should have made your claim in your 2004 AAA base form at question 7. Section V of the base form included declarations and undertakings specific to LFASS 2005. To be eligible under LFASS 2005 you must meet certain conditions. You must:

• be at least 16 years of age;
• farm at least 3 hectares of eligible forage land* in the Scottish Less Favoured Areas (LFA); and have submitted a 2004 AAA base form, duly completed and signed;
• *eligible forage land is:
• that which has been accepted by the Department as either Severely Disadvantaged or Disadvantaged within the designated Less Favoured Areas (LFA) in Scotland. You can view maps showing the Scottish LFA boundary at any SEERAD area office; and
• which meets the definition of forage area for the purpose of the IACS 2004 Area Aid Application (AAA) (as governed by regulations 2419/2001 and 3508/1992).

2.2. You must also carry out an eligible activity, that is, to maintain:

• a herd of suckler cows forming part of a regular breeding herd for the rearing of calves for meat;
• a flock of sheep comprising eligible ewes as defined in the Sheep Annual Premium Scheme regulations (2529/2001);
• a breeding herd of farmed deer for meat production;
• a herd of goats, llamas or alpacas for fibre production; and/or
• A dairy herd in the ring-fenced milk quota areas as defined in the LFASS regulations, i.e.:
• the islands of Shetland;
• the islands of Orkney;
• the islands of Islay, Jura, Arran, Bute, Great Cumbrae, Little Cumbrae and the Kintyre Peninsula south of Tarbert;
• the islands in the Outer Hebrides and the Inner Hebrides, not already listed; or
• part of the Cowal Peninsula.

2.3. We will expect you to maintain your stocking density at a level that reflects the natural disadvantage of your land to avoid either under or over-grazing. Paragraphs 10.3.1 and 10.3.2 tell you more about the minimum and maximum stocking density limits that apply. If you breach either limit we will restrict your eligible hectares.

2.4. To comply with Article 14(2) of Regulation 1257/1999, you must undertake to farm in the Less Favoured Areas for 5 years from the first payment of a compensatory allowance, or support payment including the Hill Livestock Compensatory Allowance Scheme.

2.5 You must meet the requirements of the Good Farming Practice Guidelines set out at Annex C of these Notes.

2.6. You must adhere to the environmental controls set out at Annex D of these Notes.

2.7. You must adhere to the requirements of Article 14 (3) of Regulation 1257/1999 on the non-use of prohibited substances (namely substances having a hormonal or thyrostatic action) and of beta-agonists.

2.8. You must allow SEERAD and EC staff or their representatives, access to land, animals and records at any reasonable time for the purpose of establishing compliance with the terms of the scheme. You will also be required to co-operate with such inspections.

Any breach of any of these obligations may lead to the loss of all or part of your entitlement to LFASS.

3. What if my IACS and/or land is outwith Scotland

3.1. Each UK Agricultural Department has developed a separate LFA support scheme, so SEERAD can only make LFASS payments in respect of eligible LFA land in Scotland. This means that:

• if you submitted your AAA 2004 in Scotland to cover all your UK agricultural units, we will base your LFASS 2005 entitlement only on your Scottish land. Further, your stocking density calculation will only include those animals maintained on Scottish LFA land. If you fall into this category, you should have indicated at question 7 of your AAA base form whether you wish to claim LFA support under one (or more) of the other Agricultural Departments' schemes. If you have done so, the arrangements described at paragraph 5.2. of these Notes will apply to you.
• if you submitted your AAA 2004 outwith Scotland and you have eligible land in Scotland you may not have had the opportunity to claim LFASS 2005. In these circumstances, SEERAD is prepared to consider your entitlement under LFASS 2005. We will do our best to identify those affected in this way and write to them. Again, the arrangements described at paragraph 5.2. of these Notes will apply to you.

3.2 In either instance, you should direct enquiries about non-Scottish LFA support arrangements to the Agriculture Department of the country in which your non-Scottish land is situated.

4. Claims based on Existing Information

4.1 If:

• you have claimed LFASS 2005 in your AAA 2004; and
• you have submitted livestock claims for the Sheep Annual Premium Scheme (SAPS) 2004 and/or Suckler Cow Premium Scheme (SCPS) 2004;

SEERAD will assess your LFASS 2005 entitlement on: your eligible land declared; animal numbers under these livestock schemes; and as appropriate, milk quota livestock units. We explain how we use milk quota in paragraph 4.2 and the animal numbers we will use are outlined in paragraph 8 of these Notes. Unless paragraph 5 applies to you, you need take no further action.

Milk Quota

4.2 If you claimed LFASS 2005 in your AAA 2004 and operate a dairy enterprise within the Scottish LFA we will use your Milk Quota as at 31 March 2004, either:

• if you farm within the LFASS ring-fenced milk quota area (described at paragraph 2.2 of these Notes), to assess your eligibility for LFASS 2005 and to calculate your stocking density;

or

• if you operate a dairy enterprise which is within the LFA, but outwith the LFASS
  ring-fence milk quota area; and you have other eligible activities (described in paragraph 2.2 of these Notes) to qualify for LFASS*, to assess the non-eligible land attributable to the dairying business.

*If you have an exclusively dairy enterprise which is outwith the LFASS ring-fence milk quota area (described in paragraph 2.2 of these Notes) and no other LFASS eligible activities, you will not qualify for LFASS.

5. Claims requiring Additional Information

Animal Numbers

5.1 If you maintain within the Scottish LFA:

• suckler cows for beef production and you were ineligible to claim SCPS 2004;
• eligible sheep, gimmers and hoggs (as defined in the Sheep Annual Premium Regulations 2529/2001) and did not claim under SAPS 2004;
• farmed deer for meat production; and/or
• goats, llamas or alpacas for fibre production,

you should shortly receive a letter from us asking you to declare stock details on the following three key dates:

We will need details of the numbers of suckler cows and/or ewes, gimmers and hoggs, or, in the case of farmed deer, or goats, llamas* or alpacas for fibre production, breeding females maintained on your holding on these dates. This will enable us to calculate your stocking density. If you did not claim SAPS 2004, and your flock was culled under either the Voluntary or Compulsory Scrapie Flocks Schemes, from July 2004, we will derive your eligible sheep numbers from those declared as being maintained on your holding in January and June 2004.

Once you return this information to your local SEERAD area office, we will be able to assess your LFASS 2005 entitlement. If you fall into one of the categories above and have not heard from SEERAD by the end of February 2005, please contact your local SEERAD area office (listed at Annex F). Please note, that if you indicated at question 7 of your AAA 2004 base form that you have additional sucklers cows or sheep, and have submitted a claim under SCPS or SAPS 2004, you will not receive a letter. These additional animals will not be included in your stocking density calculations. (see paragraph 9 of these Notes).

*Llamas: Breeding female llamas kept for fibre production were added to the list of eligible species for the first time under the 2004 scheme. If you have read these Notes, and keep llamas, but did not claim for LFASS 2004, and believe you may be eligible for LFASS 2005, please contact your local SEERAD area office (addresses listed at Annex F of these Notes). We can then make arrangements to collect from you the information we need about your llama numbers on the three key dates. Also, if you have not previously submitted a AAA, we will also make arrangements to gather details of your LFA land. ( Paragraph 14 of these Notes tells you about land classification.)

Businesses with Land outwith the Scottish LFA

5.2.1 If your holding for AAA purposes includes land that lies:

• within both the Scottish LFA and non-LFA designations; and/or
• within the Scottish LFA and at least one other part of the UK;

we need to know where you kept the animals claimed under the SAP 2004 and SCP 2004 schemes, or on the three key dates, for the majority of the grazing season. This will enable us to calculate your LFASS 2005 stocking density. If you fall into one or more of these groupings, and your LFASS 2005 entitlement is to be based on your SAPS 2004 and/or SCPS 2004 claims, you will receive a letter from us asking you to allocate your stock to each land type you hold. The letter will include an annex which has pre-printed livestock detail from your SAPS 2004 and SCPS 2004 claim(s). Although there is no closing date for you to supply that information, you should know that until the annex has been completed and returned we will not be in a position to assess and pay your LFASS entitlement. If you need to allocate animals to different land types and do not receive a letter from us by the end of March 2005, you should get in touch with your local SEERAD area office without delay.

5.2.2 Most farms eligible for LFASS are wholly within the Scottish LFA and are not affected by the arrangements described above. If you have any questions about the LFA status of your land, please contact your local SEERAD area office listed at Annex F of these notes.

6. Common and Shared Grazings; and Seasonal and Short Term Lets

6.1 We will base your LFASS 2005 payment on the eligible forage land in the Scottish LFA, as declared in your AAA 2004. This will include short-term or seasonal lets, common and shared grazings. The general Integrated Administration and Control System (IACS) rules will apply. Land should be available throughout the year (or for a lesser period providing qualifying criteria are met). Any forage land used on a seasonal basis must be close enough to the main holding to make its use an economic proposition.

6.2 If you use any land under a lease arrangement (ie seasonal lets), you will be expected to demonstrate your rights to use such land. You must make available documentation to support the terms of the leasing arrangement, for examination at any inspection, or on request.

7. Forage Transfer Arrangements

7.1 If you took over the whole of a holding declared by another farmer in 2004, it may be possible on written application, for the forage area on the AAA 2004 to be transferred to you for LFASS purposes.

7.2 LFASS 2005 rests on the established IACS forage transfer arrangements (full details of which can be obtained from your local SEERAD area office). This means we can only consider a forage transfer if you took over all of the land after the outgoing farmer submitted his AAA 2004, but before he fulfilled all of the LFASS eligibility conditions. The IACS rules also allow SEERAD to pay the outgoing farmer in certain circumstances. For LFASS purposes, a decision would generally (but not automatically) be made in favour of the producer who farmed the land for more than 183 days, that is, the majority of the LFASS 2005 scheme year (i.e. the 2004 calendar year).

7.3 The IACS rules underpin the forage transfer arrangements for all the IACS schemes. You should be aware, however, that the interaction between the detailed conditions of the different schemes, and the forage transfer rules, means that there may be different outcomes from scheme to scheme.

8. Calculation of Livestock Units

8. Livestock unit values are shown in detail at Annex A of these Notes. The animals we will use when calculating your livestock units are as follows:

• for SAPS claimants we will take the greater of either: the ewes and gimmers declared in the flock composition part of the SAPS claim (excluding hoggs); or the total animals claimed within quota (animals claimed within quota may include hoggs);
• for SCPS claimants we will take the greater of either: the cows (but not heifers) declared in the herd composition part of the SCPS claim; or the total animals claimed within quota (animals claimed within quota may include heifers);
• for sheep and/or suckler cow producers ineligible to claim under the premium schemes; we will take breeding females maintained throughout the scheme year and declared separately on three key dates ( excluding heifers);
• for deer, goat, llama and alpaca producers, we will take breeding females maintained throughout the scheme year and declared separately on three key dates; and
• for dairy farmers, we will take livestock units based on litres of milk quota as at 31 March.

These livestock definitions will apply to:

• the stocking density we will use to assess whether your eligible land will be restricted this year for the purposes of the minimum and maximum stocking densities (on the basis of eligible land and activity in 2004 - paragraph 10.3 of these Notes refers);
• the stocking density calculation we used to assess your grazing category (on the basis of eligible land and activity in the reference year of 2001 - paragraph 10.4.1. of these Notes refers);
• and the livestock units we will use to assess your enterprise mix, if appropriate ( paragraph 10.5. refers).

9. Stocking Density

9.1. As in previous years, SEERAD will use stocking densities to meet EU regulatory requirements to avoid over-compensation and to ensure that claimants farm in a sustainable manner. We will calculate your LFASS 2005 stocking density using your eligible forage area (see paragraph 2.1 of these Notes) declared in your AAA 2004; 2004 animal numbers; and, where appropriate, milk quota information ( paragraph 8 refers). An example of the calculation we will use, and the conversion rates for each animal type are shown at Annex A of these Notes. Maximum and Minimum stocking limits are described in more detail at paragraph 10.3.

9.2. Paragraph 8. of these Notes describes in detail the animal information we will use to calculate your livestock units. The types of livestock unit that will be included in your LFASS 2005 stocking density calculation will depend upon which category of claimant you are:

Non-Dairy Farmers and Dairy Farmers outwith the LFASS Ring-fenced Milk Quota

• Suckler cows and, where appropriate, heifers
• sheep
• goats
• llamas
• alpacas
• deer

Dairy Farmers within the LFASS Ring-fenced Milk Quota Areas

• Suckler cows and, where appropriate, heifers
• Milk quota
• sheep
• goats
• llamas
• alpacas
• deer

9.3 Please note that the livestock unit values and the stocking density calculation detailed in Annex A, apply to LFASS only. They have no bearing on any of the other premium schemes. We use different calculations and in particular, heifer livestock unit values, for the purposes of the Extensification, Suckler Cow Premium and Beef Special Premium Schemes.

10. How will my Payment be Calculated?

Eligible Forage Land

10.1. If you are eligible, we will pay you on the basis of each eligible forage hectare (see paragraph 2.1. of these Notes), adjusted to take account of:

• any ineligible hectares if you have a dairying enterprise in the LFA but outwith the LFASS ring-fence milk quota area;
• any minimum or maximum stocking density restriction that applies to your claim;
• your grazing category; and
• any enterprise mix enhancement you qualify for.

Ineligible Land used for Dairying Outwith the LFASS Ring-Fence Milk Quota Area

10.2. If you have a dairy enterprise outwith the LFASS ring fence milk quota area (defined in paragraph 2.2. of these Notes) but also carry out one of the eligible activities described in paragraph 2.2. of these Notes, we will reduce your LFA forage hectares to take account of land used for dairying. We will calculate the land used for ineligible activity by using the litres of milk quota as at 31 March 2004 in the following formula:

An example of how a payment of this type will be calculated is included at Annex B

Avoiding Over-Compensation: Minimum and Maximum Stocking Densities

10.3.1. EC Regulation 1257/1999 specifically requires avoidance of over-compensation. Payments will be reduced for land which falls below the minimum stocking density of 0.12 lu/ha that will apply to all eligible farms, irrespective of location or type. If your LFASS 2005 stocking density is less than 0.12, we will base your payment on the number of hectares that will support the stock you actually maintained for LFASS purposes in 2004, at 0.12, the minimum stocking density. We will use the following formula:

*Calculated as per paragraph 8 of these Notes

10.3.2. There is also a maximum stocking density limit of 1.4 lu/ha. If your LFASS 2005 stocking density exceeds 1.4 we will restrict your LFASS eligible hectares using the following formula:

Examples of payments restricted by the minimum and maximum stocking densities are included at Annex B.

Eligible Activity Undertaken in 2001: Grazing Category Value

10.4.1. Under the LFASS 2003, SEERAD allocated a grazing category to each business as a means of reflecting land quality. To do this we needed a relevant snapshot of business activity and we decided stocking densities based on eligible land and activity in 2001 (the scheme year for LFASS 2002) provided an acceptable basis. We calculated your baseline stocking density using the land and stock you had in 2001. The animals we used when calculating your livestock units for the purposes of your grazing category, were those detailed at paragraph 8. of these Notes. If you claimed and were paid under LFASS 2002, we wrote to you in February 2003 to give you an indication of which of the grazing categories below, applied to the land you claimed in 2001:

*Please note that stocking densities are rounded to 2 decimal places, so, for example, 0.195 lu/ha becomes 0.20 lu/ha and 0.194 lu/ha rounds to 0.19 lu/ha.

The grazing category allocated on the basis of 2001 stocking densities remains with each field. If the land composition of your farm did not change between submitting your AAA 2001 and AAA 2004, we will simply multiply your eligible hectares (declared in your AAA 2004) by the hectare value appropriate to your grazing category, to determine the number of eligible hectares which will form the basis of your LFASS 2005 payment calculation.

What if I have acquired a new field with a different grazing category since May 2001, and have included it in my AAA 2004?

10.4.2. Your grazing category applies at an individual field level. This means that if the land composition of your farm changed between submission of your AAA 2001 and AAA 2004, we will look at the 2001 grazing category of each field you claimed in 2004. We will use the 2001 baselined stocking densities associated with the fields you declared in 2004 to determine the appropriate grazing categories applicable to your LFASS 2005 claim. For example, a producer whose holding composition in 2001 placed his 300 ha (declared in his AAA 2001) in category A, subsequently acquired a 40 ha field classified as C. Consequently, for LFASS 2005, the following adjustments would be made to combine 340 ha of forage included in his AAA 2004, to take account of both grazing categories:

The payment calculation for this hypothetical producer is included with several other examples at Annex B. If you have questions about the grazing category (or categories) of your farm, please contact your local SEERAD area office.

What if I claimed common grazing land in my AAA 2001 - how did SEERAD allocate a grazing category to this land?

10.4.3 To determine your total eligible forage land claimed on your AAA 2001, we added your common grazing share to your in-bye land. We then divided all your LFASS eligible livestock units (calculated as per paragraph 8 of these Notes on the basis of stock held in 2001) by all your eligible forage land. The single grazing category derived from the stocking density calculated was allocated to both your in-bye and common grazing land.

What if I claimed shared grazing in my AAA 2001 - how did SEERAD allocate a grazing category to this land?

10.4.4 A single grazing category will have been applied to the whole of a shared field by averaging the individual stocking densities of each farmer sharing the field. The field would then have been divided between the producers concerned, pro-rata, according to their share of the total livestock maintained on the field. This approach means that your share of the grazing may be allocated a different grazing category from the rest of your eligible land.

Can I appeal against my Grazing Category?

10.4.5 Yes. The appeals process is outlined at paragraph 14 of these notes.

Environmental Measure: Mix of Livestock Maintained

10.5. LFASS encourages beef production and rewards the environmental and socio-economic benefit of maintaining cattle in the LFA. For LFASS 2005 there are two levels of enhancement to be applied to the gross eligible hectares, in addition to the grazing category. If at least 10% of the livestock units you maintained in 2004 were eligible cattle, one of the two rates of enhancement below will apply to you:

* Calculated as per paragraph 8 of these Notes. Remember, the number may be taken from the herd composition part of the SCPS claim in certain circumstances.

**Eligible Cattle can be summarised as:

for non-dairy enterprises and dairy enterprises outwith the LFASS ring-fence milk quota areas (as defined at paragraph 2.2 of these Notes): either suckler cows and, where appropriate, heifers as part of a SCPS 2004 claim, or suckler cows declared separately.

for dairy enterprises within the LFASS ring-fenced milk quota areas (as defined at paragraph 2.2. of these Notes): dairy livestock units (1 dairy livestock unit = 5730 litres of milk quota as at 31 March 2004) and/or; either suckler cows and, where appropriate, heifers as part of a SCPS 2004 claim, or suckler cows declared separately.

Rates of Aid

10.6. In setting the payment rates for LFASS 2005 we aim to recognise the different transport costs faced by farmers across the LFA and the varying degrees of natural handicap affecting the Scottish LFA. To achieve this we will use both:

• the fragility markers introduced under the 2004 scheme. The list of parish codes included at Annex E shows which single fragility marker applies to you, based on the location of your main farm code. (Your parish code is the first three digits of your main farm code); and,
• your grazing category: We will do this by grouping together land with grazing category A and B as "More Disadvantaged Land" and land with grazing category C and D as "Less Disadvantaged Land". These two groupings have different payment rates within each fragility category, as set out below:

Please note that, although only one fragility marker can apply to your LFASS 2005 entitlement, it is possible to be paid both rates within a single fragility category. This will happen only if you included both More Disadvantaged and Less Disadvantaged Land included in your AAA 2004.

Please note:

• if your main farm code lies outwith the LFA, or outwith Scotland, we will pay the standard rate(s) for each ha of eligible land you farm within the Scottish LFA; or
• if your main farm code is based on a mainland parish, but your main farm is located on an island, we will pay the Very Fragile rate(s).

Calculation of your Area Based Entitlement

10.7. We will calculate your LFASS 2005 entitlement as follows:

• if applicable, adjust your eligible hectares from your AAA 2004 to take account of any ineligible dairy activity and/or the minimum and maximum stocking density restrictions;
• multiply your eligible forage hectares declared in your AAA 2004 by the appropriate grazing category value(s);
• if appropriate, multiply your eligible hectares (adjusted by your grazing value) by your enterprise mix multiplier; and
• multiply your adjusted eligible hectares by the appropriate payment rate(s).

This will be the amount we will pay you unless the minimum scheme payment top-up at paragraph 10.8 applies. To illustrate how the calculation will work in practice, we have included several hypothetical examples of payment calculations at Annex B.

Minimum Payment

10.8. SEERAD recognises the costs associated with running small farm businesses and for this reason, under LFASS 2005 the minimum payment for an eligible claim will be 350. This means that if your area payment is less than 350, we will pay you an additional sum to bring the total to 350.

11. How and When will I get my Payment?

How?

11.1. LFASS claims will be paid using the Bankers Automated Clearing System (BACS). We will already have your bank details if you have previously received an LFASS payment or payment for any other IACS Schemes. However, if you have not previously supplied this information you should obtain and complete a form BACS (1) and return it to your local SEERAD area office as quickly as possible. This also applies if you need to change the details we hold.

When?

11.2. Our aim is to start to issue payments in March 2005, with at least 50% of eligible claims being paid by the end of that month and 90% by the end of June.

12. Inspections

It is a condition of the scheme that you must allow SEERAD and EC staff, or representatives, access to land, animals and records at any reasonable time for the purposes of establishing compliance with the terms of the Scheme. You will also be required to co-operate with such inspections.

13. Penalties and Repayment of Allowances

LFASS Penalties

13.1. We must implement LFASS strictly in accordance with EC rules. Make sure you understand your obligations and you should consider seeking professional advice if necessary. If you do not observe the conditions of LFASS outlined in paragraph 2 of these Notes you will forfeit all or part of your payment. If you make a false declaration, as a result of serious negligence, then you will be excluded from the LFASS for the year. If you make a false declaration intentionally, you will be excluded from LFASS for the following year as well. If you knowingly or recklessly make a false statement for the purpose of obtaining payment for yourself or another person, you and they also risk prosecution.

Good Farming Practice Penalties

13.2. As before, to qualify for LFASS, all producers must meet the requirements of Good Farming Practice set out at Annex C. A breach of Good Farming Practice, depending on the severity, may mean the loss of all or part of payment of LFASS. To ensure that payment reductions are applied consistently and fairly, we have developed a scale of Good Farming Practice penalties. The range of penalties includes: a warning letter for a negligent breach that is rectifiable and has a minimal impact; total loss of subsidy for an intentional breach that has permanent consequences; and penalties of increasing severity in subsequent years, for repeated breaches. Full details will be available from your local SEERAD area office and on SEERAD's website in due course.

IACS Penalties which affect LFASS

13.3. AAA penalties outlined in Annex 2 of the IACS (1) 2004 Explanatory Booklet will apply, if appropriate.

Repayment

13.4. If we discover you have been paid money under LFASS 2005 to which you are not entitled, you will have to repay the amount in full. If the over-payment occurs through a breach of the scheme conditions, SEERAD will charge interest from the date of notification of the overpayment until full recovery, including interest, has been achieved.

14. Land Classification: Applications for LFA classification and Appeals against decisions; and Appeals against Grazing Categories

Application for LFA Classification

14.1 If you are not satisfied with the current classification of your farm you should in the first instance write to your local SEERAD area office. We will arrange to inspect your land at an appropriate time and consider whether conditions merit a re-assessment of the existing classification. We will notify you of our decision once all aspects of your case have been considered. If you are dissatisfied with the outcome of your application, you may follow the appeals process outlined at paragraph 14.2.

Appeals against LFA Classification

14.2 If you are unhappy with any SEERAD decision in relation to an application for LFA classification, you have the right to have your appeal considered by an independent body, through your local SEERAD area office. In this event, an external appeals panel would be set up to review the original classification.

Appeals against Grazing Category

14.3.1 Paragraph 10.2 of these Notes explains how we assessed your Grazing Category on the basis of your stocking density in 2001. If you are unhappy with the category allocated to the land declared in your AAA 2001 you may appeal against a grazing category decision, only in the circumstances specified below:

Unrepresentative Stocking Levels in 2001

Q Unusual circumstances in 2001 meant that my stocking levels that year were significantly lower than usual. Will you consider reassessing my grazing category?

A We will only consider reviewing someone's 2001 stocking density position for the purposes of the Grazing Category, if they can provide documentary evidence that clearly demonstrated that it was not typical of their usual stocking pattern. It is important to remember that the LFASS stocking density calculation is not intended to cover all the animals on a holding.

Developers

Q I took on land which carried little (or no) stock in the 2001 reference period and am in the process of building up the herd/flock in line with my business plan. Can I have the grazing category of the land reassessed on the basis of the maximum stocking levels outlined in my plan?

A Not necessarily. The presumption underlying the scheme is that a producer's stocking density in 2001 was a reasonable indicator of the overall quality of the land. Appeals of this type against the stocking density awarded to a unit will be considered on their merits and take into account all relevant evidence.

Former Agri-Environment Scheme Participants

Q I participated in an agri-environment scheme that involved stock reduction. This scheme has ended and I have since increased my stock numbers. Will SEERAD
re-assess the Grazing Category of my land on the basis of more recent stocking levels?

A This depends on the reason for stock reduction. If it was, for example, to allow suppressed grazing to recover, it would be inappropriate to increase payment to someone who restocks to the detriment of the grazing. We will treat each case on its merits with the aim of ensuring that any benefit or improvement gained under the
agri-environment scheme is sustained.

Control Measures following an Epizootic Disease Outbreak (eg FMD)

Q My animals were culled during the FMD outbreak. How will you take account of this for the purpose of my Grazing Category?

A We may already have taken this into account when assessing your payment entitlement under LFASS 2002, in which case we should have carried forward the adjusted animal figure for the purposes of your Grazing Category. If you are in any doubt, please contact your local SEERAD area office. If this has not previously been addressed, and you have continued to rebuild your stock numbers, we may consider reassessing your 2001 stocking density on the basis of the previous year's stock levels.

14.3.2 In any of the above circumstances, you should in the first instance make representations to your local SEERAD area office. If you are dissatisfied with the outcome and wish the decision to be reviewed you should contact the Principal Agricultural Officer at your local office. If you are still not content then you can appeal under SEERAD's EU Agricultural Subsidies Appeals procedure. This procedure is outlined at paragraph 15.1 of these Notes.

15. Appeals and Complaints Procedure

Appeals against decisions

15.1 If you are not sure why you have been penalised or do not fully understand a decision SEERAD has made in connection with your claim, you should contact your local SEERAD area office for a fuller explanation. If you are not satisfied with this explanation and wish the decision to be reviewed you can appeal under SEERAD's EU Agricultural Subsidies Appeals procedure. The circumstances in which you can do this are detailed in section 14. You have 60 calendar days from the date of our decision letter in which to submit an appeal. This procedure consists of 3 stages: an in-house review, an external panel review and an appeal to the Scottish Land Court. An information leaflet AP (EL) June 2001 and application form has been issued to all farmers. Further copies are available from area offices; from the Appeals Secretariat; and from the Department's website: www.scotland.gov.uk . If you are unsure if you have the right to appeal or have any other questions, contact the Appeals Secretariat, SEERAD, 47 Robb's Loan, Edinburgh, EH14 1TY. Please note that the appeals procedure does not deal with complaints about standard of service.

Complaints about Standard of Service

15.2 If you have a complaint about the standard of service we provide, you should proceed as follows:

• You should discuss the matter of concern with the manager of the team you have been dealing with. This is likely to be either your Area Office or a team in Edinburgh. They may be able to answer your concerns to your satisfaction.
• You may write formally to our central complaints team at the address given below.

What will happen to my complaint - approach to local team head

• Contact the person in charge of the team you have been dealing with, and explain your concerns. If you are unsure as to their identity, ask your Area Office or the central complaints team for assistance. You may complain in person, over the phone, in writing, or by e-mail. We would encourage personal contact as it may allow us to resolve the matter to your satisfaction better and sooner.
• The team head will ask for your details, and for information on your complaint. If they can, they will address the matters raised on the spot. They may have to note some and look into these afterwards. During contact, they will ask you if you wish to have the matter formally logged in our records as a complaint. If you ask for it to be logged as a complaint, the team head will carry out any follow up action necessary, and write back to you within 2 weeks confirming the outcome discussed and/or giving a response to any further action. The letter will indicate what you can do if you are still dissatisfied. The team head may phone you after you have received the letter to clarify any points you may have.

What will happen to my complaint - approach to the central complaints team

• You may write formally to our central complaints team, using our complaint form. Copies of the form are available on request from your Area Office or from the complaints team. A copy is also available on the Scottish Executive website http://www.scotland.gov.uk
• You do not necessarily have to approach the person in charge of the team you have dealt with before submitting a form, but we would encourage this as a first step. We ask you to indicate your complaint briefly on the form. This is so we avoid any misunderstanding and that we can clearly identify the individual aspects we need to address in our reply. We ask you then to attach a more detailed note with background to the circumstances that led to your complaint.

Other ways to complain

• You may also use other ways to complain. You may ask your Member of the Scottish Parliament (or alternatively your Member of the UK Parliament) to take up your complaint with the Minister for Environment and Rural Development at The Scottish Executive, Pentland House, 47 Robbs Loan, Edinburgh, EH14 1TY.
• If you have used our complaint procedure and are still not satisfied, you (or your representative) may ask the Scottish Public Sector Ombudsman to investigate your complaint. Your representative may be an MSP, local councillor or any person you consider suitable to represent your interests. Your complaint must be submitted to the Scottish Public Services Ombudsman, 4 Melville Street, Edinburgh, EH3 7NS, within 12 months after the day on which you first had notice of the matter which you are complaining about. Further information about the Scottish Public Sector Ombudsman is available at www.scottishombudsman.org.uk

Useful address

• If you are unsure about the procedure, or require any further information, please contact the Central Complaints Team at:

SEERAD Central Complaints Team
Room 028
Pentland House
47 Robbs Loan
Edinburgh
EH14 1TY

Enquiry Tel no: 0131 244 3111
Email address: SEERADCAPM1@scotland.gsi.gov.uk

Or you may wish to contact your Area Office

• If you are satisfied with the service we have provided, or wish to highlight some exceptional performance, we would be happy to hear from you. Should you have suggestions about how we can build on the service we provide, these will also be welcomed.

ANNEX A

CALCULATION OF LIVESTOCK UNITS AND STOCKING DENSITY

This Annex is intended to help you work out your total Livestock Units (LU) and Stocking Density, as it applies to LFASS 2005 and should be read in conjunction with paragraphs 8 and 9 of these Notes.

This is for your own information - our computer system will do the calculation for the purposes of your LFASS 2005 claim, based on the AAA 2004, SAPS 2004 and SCPS 2004 information we already hold, and /or any relevant additional information we have gathered from you.

LIVESTOCK UNITS

* (i.e. 1.995 rounds to 2.00 and 1.994 rounds to 1.99)

ANNEX B

PAYMENT CALCULATION EXAMPLES

The following examples show the level of payment due in the exact circumstances described:

Example 1 - No land composition change between 2001 and 2004: A producer's main farm code is located in the standard area. The farmer has declared land of a single grazing category in his AAAs between 2001 and 2004. His 2001 stocking levels placed him in category D (see paragraph 10.4.1. of these Notes), and in the less disadvantaged land category; his stocking density in the basis of his land and animals in 2004 is 0.70 lu/ha; and he has 100% cattle livestock units (see paragraph 10.5. of these Notes).

Example 2 - No land composition change between 2001 and 2004: A producer's main farm code is located in the mainland fragile area. The farmer has declared land of a single grazing category in his AAAs between 2001 and 2004. His 2001 stocking levels placed him in category B (see paragraph 10.4.1. of these Notes), and in the more disadvantaged land category; his stocking density in the basis of his land and animals in 2004 is 0.25 lu/ha; and he has 30% cattle livestock units (see paragraph 10.5. of these Notes)

Example 3 - Acquired land of a different grazing category between 2001 and 2004: A producer's main farm code is located in the islands, very-fragile area. The farmer declared 300ha of land in his AAA 2001 and his stocking levels in 2001 placed this land in grazing category A (see paragraph 10.4.1. of these Notes) and for LFASS 2005, in the more disadvantaged land category. This land was included in his AAA 2004 along with a further 40ha acquired, classified as grazing category C based on it's 2001 stocking levels, and in the less disadvantaged land category. Based on the combined total of 340ha declared in his AAA 2004; and his eligible animals in 2004, the farmers current stocking density is 0.20. He also has 15% cattle livestock units (see paragraph 10.5. of these Notes).

Example 4 - Minimum stocking density (min SD) restriction: A producer's main farm code is located in the islands very-fragile area. The farmer has declared land of a single grazing category in his AAAs between 2001 and 2004. His 2001 stocking levels placed him in category A (see paragraph 10.4.1. of these Notes) and in the more disadvantaged land category. His stocking density on the basis of his land and animals in 2004 is 0.10 lu/ha (below the minimum stocking density limit - see paragraph 10.3.1. of these Notes). He has 6 livestock units, all sheep, on 60ha of land.

Example 5 - Maximum stocking density (Max SD) restriction: A producer's main farm code is located in the standard area. The farmer has declared land of a single grazing category in his AAAs between 2001 and 2004. His 2001 stocking levels placed him in category D (see paragraph 10.4.1. of these Notes) and in the less disadvantaged land category. His stocking density on the basis of his land and animals in 2004 is 1.5 lu/ha (above the maximum stocking density limit - see paragraph 10.3.2. of these Notes). He has 150 livestock units, 100% of which are cattle, on 100ha of land.

Example 6 - Ineligible land used for dairying outwith the LFASS ring-fence milk quota area: A producer has a dairy farm and also has sheep. The main farm code is located in the standard area. His 2001 stocking levels placed him in category D (see paragraph 10.4.1. of these Notes) and in the less disadvantaged land category. His stocking density on the basis of his land and eligible animals in 2004 is 0.50 lu/ha. He declared 200ha of land in his AAA 2004, and has 92 sheep livestock units and 114,600 litres of milk quota (see paragraph 10.2. and Annex A of these Notes).

Example 7 Minimum payment top up: A producer with a small farm has an area entitlement, calculated on the basis of his low number of eligible hectares and stock, that is less than 350.

ANNEX C

GOOD FARMING PRACTICE GUIDELINES - SCOTLAND

Regulation 1750/1999 states (Article 19) that where a farmer/crofter(s) enters into an
agri-environmental commitment in relation to part of the farm/croft, he/she shall adhere to at least the standard of good farming practice in relation to the whole of the farm/croft. Also Council Regulation 1257/1999 (Less Favoured Areas and Areas with Environmental Restrictions) Article 14.2 states that compensatory allowances shall be granted per hectare of areas used for agriculture to farmers who apply usual good farming practices compatible with the need to safeguard the environment and maintain the countryside, in particular by sustainable farming.

It is a condition of approval that you comply with the Standard of Good Farming Practice and any future revisions to it. A list of the verifiable standards of Good Farming Practice follows, and the complementary environmental regulations are detailed at the end of this section.

If you are subject to investigation by SEPA or any other enforcement agency for a breach of any environmental regulation we may have to consider delaying the payment of a claim until the outcome of the investigation is known.

The verifiable standards of Good Farming Practice are ones which are complementary to existing legislative requirements and are capable of verification by Scottish Executive Environment and Rural Affairs Department (SEERAD) staff to EU audit standards as part of our existing checks on agri-environment scheme participants.

1.1 On rough grazings, unimproved grassland, reverted improved grassland, machair and dune grassland, wetlands and native, amenity or semi-natural woodlands, you must ensure that livestock are managed to avoid either overgrazing or undergrazing.

High concentrations of stock often cause poaching, frequently as a result of supplementary feeding practices, with obvious damage to the vegetation. When feed blocks are used, it will often be preferable to rotate feeding sites, but if hay is fed, sacrificial areas may be more desirable due to the risk of site rotation spreading introduced grass seeds over larger areas, to the detriment of the natural herbage.

Overgrazing is defined as 'grazing land with livestock in such numbers as adversely to affect the growth, quality or species composition of vegetation (other than vegetation normally grazed to destruction) on that land to a significant degree'. Scheme participants will have an obligation to manage their stock in such a way as to prevent damage to sensitive habitats that are important for biodiversity reasons. Examples are juniper and montane scrub, herb-rich swards, already eroded areas and wetland habitats as well as other natural and semi-natural habitats. Cases of suspected overgrazing will be investigated. Where overgrazing is identified, a management regime including a maximum (and where appropriate a minimum) stocking rate to be observed on that site will be prescribed. Failure to observe the stocking limit thereafter would be a breach of this condition.

Unsuitable Supplementary Feeding

Unsuitable supplementary feeding means providing supplementary feed (other than to maintain livestock during abnormal weather conditions) in such a manner as to result in damage to vegetation through excessive trampling or poaching of the land by animals or excessive rutting by vehicles. Please note that if you claim that weather conditions were abnormal, you will be asked to demonstrate that your usual feeding practice was not adequate to maintain your animals during the abnormal conditions. Cases of suspected unsuitable supplementary feeding will be investigated and failure to follow advice thereafter would be a breach of this condition.

Undergrazing or under-utilisation is defined as 'grazing at a level where there is evidence of the annual growth not being fully utilised, or scrub or course vegetation is becoming evident, and such changes are detrimental to the environmental interest of the site'. Where undergrazing is identified, a management regime including a maximum (and where appropriate a minimum) stocking rate to be observed on that site will be prescribed. Failure to observe the stocking limit thereafter would be a breach of this condition.

1.2 Animal owners and keepers must ensure good welfare of their animals

• Animals must not be caused any unnecessary pain or suffering.
• Animals must be inspected at regular intervals.
• Animals kept in buildings must have access to a well maintained drying area.
• Animal buildings must be constructed in a way that will not be harmful to animals.
• Where necessary artificial light must be provided and animals should not be kept without an appropriate period of rest from artificial light.
• Animals must be fed a diet of sufficient quality and quantity to maintain them in good health and to satisfy their nutritional needs.
• All animals must have access to feed at appropriate intervals (at least once a day) and a suitable water supply or to be able to satisfy their fluid intake by other means.
• Movement of animals should not be restricted in such a way as to cause them unnecessary suffering or injury.

1.3 Competence of animal keepers

Keepers of animals must not attend to them unless they have access to the appropriate Statutory Welfare Codes and are knowledgeable about the provisions within the Codes.

1.4 Care of ill or injured Animals

Ill or injured animals must be cared for appropriately without delay and, where necessary, veterinary advice must be obtained as soon as possible. Records must be maintained of the medicinal treatment given to animals and of the number of mortalities.

1.5 Drystone or flagstone dykes or walls, hedges and hedgerow trees on your land are important elements of a traditional landscape and provide valuable habitats for a diverse range of plants and animals. The removal or clearance of such features will not be permitted except with the prior written agreement of SEERAD or other appropriate Government Agency.

Enforcement will be through visual assessment of any recent damage during field checks.

1.6 Trimming of hedgerows on your land, if carried out between 1 March and 31 July, may damage the conservation interest of this habitat. No hedge trimming during this period will be allowed.

Enforcement will be through visual evidence of recent damage during any checks carried out.

1.7 You are required to notify Scottish Natural Heritage of any intended operations that are likely to damage any Site of Special Scientific Interest on your land.

It is a condition of LFASS that participants will not proceed with any such operations without having obtained prior approval from Scottish Natural Heritage. Checks will be made to see that any damaging operations that appear to have been carried out have had prior approval from SNH.

1.8 If a new silage or slurry storage facility is constructed on your land, you must notify the Scottish Environment Protection Agency before starting to use it.

Checks will be carried out to see that this notification has been given for any new stores.

1.9 You must obtain prior authorisation from the Scottish Environment Protection Agency before disposing of sheep dip on your land.

Checks will be made to see that either an authorisation has been obtained or that there is justifiable reason why no authorisation is needed in that individual case.

1.10 In most cases, you must obtain a Felling Licence or approval under a Forestry Commission endorsed Grant Scheme before felling trees.

Before felling trees you should check with the Forestry Commission and confirm whether a felling licence is required. If a felling licence is issued, you may be asked to produce it during an inspection.

Please Note: SEERAD keeps these guidelines under review and changes can be introduced by amendments to underlying legislation. If you are in any doubt about how any of the guidelines may be applied to your own circumstances, you are advised to contact your local SEERAD area office for confirmation of the up-to-date guidelines in force.

ENVIRONMENTAL LEGISLATION:

MINIMUM ENVIRONMENTAL STANDARDS (SCOTLAND)

ANNEX D

ENVIRONMENTAL CONTROLS

The legislative authority for LFASS lies in the EC Rural Development Regulations. One of the main objectives of these regulations is to maintain the countryside and promote sustainable farming systems which take particular account of environmental protection requirements. With this in mind, from 2004, to qualify for LFASS you must comply with five new environmental conditions. These measures (listed below) build on the Good Farming Practice Guidelines outlined in Annex C, and are aimed at maintaining landscape, biodiversity and habitats of conservation value, and at avoiding the consequences of overgrazing and unsustainable farming:

• to ensure the protection of rough grazing and other semi-natural areas, applicants must not undertake new drainage works, ploughing, clearing, levelling, re-seeding or cultivating. Livestock must be managed to avoid poaching to a level which would destroy the natural vegetation;
• also, to ensure the protection of rough grazings and other semi-natural areas, pesticides, lime or fertiliser must not be applied. Exceptions are allowed in the following circumstances:-

1. To control weeds covered by the Weeds Act 1959;

2. For the control of bracken with Asulam or other approved herbicides;

or

3. Exceptionally, the application of lime or fertiliser where no conservation damage will result.

• muirburn must comply with the Muirburn Code to protect and manage valuable habitats such as regenerating Scots pine, blanket bog and moorland juniper;
• participants must avoid damage to features of historical or archaeological interest and follow the Scottish Executive guidance on the protection of these areas; and
• participants must follow the Scottish Executive guidance on the prevention of Environmental Pollution from Agricultural Activity code to avoid or at least minimise the risk of pollution, through good management of nutrients and effluents.

Any of these works may be carried out if approved under the Environmental Impact Assessment (uncultivated and semi-natural areas) Regulations 2002.

These conditions bring LFASS applicants into line with the basic requirements of the Rural Stewardship Scheme.

ANNEX E

FRAGILITY MARKERS FOR PARISH CODE NUMBERS

ANNEX F

The code number of your holding should be quoted in any correspondence with the Department regarding your application for the payment of LFASS.