Annex 2: European Commission ( EC) Review of the Less Favoured Area Scheme
1. In 2003, the European Court of Auditors recommended a review of the existing classification of LFAs and an overall evaluation of the scheme. This was because, across the EU, the extent of LFAs had tended to increase and the criteria for designation had become more varied. For example, physical indicators relating to soil and climate handicaps are widely used but their definition and application is extremely diverse from one Member State to another.
In 2005, the Agriculture Council failed to agree on an EU-wide system for LFA classification and decided to keep the previous LFA system in force until 1 January 2010. It also asked the EC to undertake this review, focusing on the "intermediate" LFAs, namely areas with natural handicaps other than mountain areas.
The aims of the EC review are:
- to adapt the intermediate LFA delimitation and payment system in order to target the aid to the preservation of sustainable farming activity in areas affected by natural handicaps;
- to target the aid within the designated areas to areas characterised by a prevalence of extensive farming activity that effectively suffers from natural handicaps and where consequently there is significant risk of land abandonment;
- to ensure transparency and controllability of the aid scheme, its consistency and complementarity with the other measures of the first and of the second pillar of the CAP;
- to limit, as far as possible, the administrative burden linked to the implementation of the measure.
As part of this review, the EC's Joint Research Centre identified the following common bio-physical criteria indicating significant handicaps for European agriculture:
Temperature | - Low length of growing period |
Heat stress | - Periods of continuous days with high temperature |
Soil-water balance | - Soil moisture availability limiting crop growth |
Drainage | - Poorly drained soils |
Texture | - Coarse texture soils, heavy clay soils, vertic features |
Stoniness | - Volume of stones in topsoil |
Rooting depth | - Depth limitations |
Chmical properties | - Acidity, Salinity, Sodicity of soil |
Slope | - % slope limiting agricultural activity. |
The consultation paper identified four options for designating intermediate areas:
- 'Status Quo+', empowering the Member States to designate LFAs according to national indicators of natural handicaps and excluding previously used socio-economic criteria. This would establish a 'no policy change' reference scenario, consistent with the new LFA rationale and close to the current situation;
- 'Common Criteria'. Under this option, LFAs would be delimited according to the bio-physical criteria identified by the Joint Research Centre. An area would be designated as disadvantaged if it meets one single criterion at the fixed threshold (eg an agricultural area with a slope above the fixed threshold value would qualify); these areas would then undergo a second test to ensure that only those areas where the natural handicaps are actually affecting agriculture are designated as LFAs;
- 'Eligibility Rules'. LFA boundaries would be designated in the same way as in the 'Common Criteria Option'. In addition, the basic principles of the eligibility criteria would be fixed by EC legislation (eg minimum and maximum stocking densities) so that aid is only given to farms which operate in an environmentally sustainable manner. This more ambitious option would ensure the further targeting of LFA support to those farming systems which contribute most to sustainable land management;
- 'High Nature Value'. This links the support to agriculture in areas affected by natural handicaps to the preservation of high nature value farming systems defined on the basis of common criteria. The designation of LFAs would follow three steps. The first two steps would be the same as in options 2 and 3, and the third step would consist of further limiting the LFAs to areas which are both affected by natural handicaps and are classified as High Nature Value farmland, defined as those areas in Europe where agriculture is a major (usually the dominant) land use and where agriculture supports or is associated with either a high species and habitat diversity, or the presence of species of European, and/or national, and/or regional concern, or both. As a result, only HNV farmland in areas affected by natural handicaps would qualify as LFAs.
Under all options, the payment would be calculated on the basis of the additional costs and income foregone related to the handicap in the area concerned, within the minimum and maximum amount fixed by the Council.