Rural Development policy 2007-2013

Aid to farmers in Less Favoured Areas (LFA)

Why an aid to farmers in Less Favoured Areas?

In areas designated as "less-favoured", agricultural production or activity is more difficult because of natural handicaps, e.g. difficult climatic conditions, steep slopes in mountain areas, or low soil productivity in other less favoured areas.

Due to the handicap to farming there is a significant risk of agricultural land abandonment and thus a possibility of loss of biodiversity, desertification, forest fires and the loss of highly valuable rural landscape.

To mitigate these risks, the Less Favoured Areas (LFA) payment scheme is an important tool, implemented by all the Member States although it is not a compulsory measure.

Preserving the farmed landscape and forests is one of the key actions identified by the Community strategic guidelines for Rural Development for 2007-2013:

"Appropriate farming systems help to preserve landscapes and habitats ranging from wetlands to dry meadows and mountain pastures. In many areas, this is an important part of the cultural heritage and of the overall attractiveness of rural areas as places in which to live and work…."

The LFA scheme is part of Axis 2 of the Rural Development Policy for 2007-2013, which aims at improving the environment and the countryside by supporting sustainable land management. Council Regulation (EC) No 1698/2005 describes the objective of the LFA scheme as follows (Recital 33):

"Natural handicap payments in mountain areas and payments in other areas with handicaps should contribute, through continued use of agricultural land, to maintaining the countryside, as well as to maintaining and promoting sustainable farming systems."

Which areas are currently designated as less favoured?

Under the Articles of Council Regulation (EC) 1257/1999 still in force, an area may be classified as less favoured according to one of three categories. Each category characterises a specific cluster of handicaps, common to certain areas of agricultural land across Europe, and which threaten the continuation of agricultural land use:

• Under Article 18, Mountain Areas are characterised as those areas handicapped by a short growing season because of a high altitude, or by steep slopes at a lower altitude, or by a combination of the two. Areas north of the 62nd parallel are also delimited as Mountains.

• Under Article 19, 'Intermediate' Less Favoured Areas are those areas in danger of abandonment of agricultural land-use and where the conservation of the countryside is necessary. They exhibit all of the following handicaps:
  
  
  • land of poor productivity;
    
    
  • production which results from low productivity of the natural environment;
    
    
  • and a low or dwindling population predominantly dependent on agricultural activity.

• Under Article 20, Areas Affected by Specific Handicaps are areas where farming should be continued in order to:
  
  
  • conserve or improve the environment;
    
    
  • maintain the countryside;
    
    
  • preserve the tourist potential of the areas;
    
    
  • protect the coastline.

The map shows the three existing categories of LFAs in the EU 27.

How does the LFA scheme works?

Not all farms within an LFA receive a compensatory allowance. LFA beneficiaries are required to undertake to farm for at least five years from the first payment and to farm a minimum area fixed at the Member State level. In addition, Member States apply a range of specific eligibility criteria.

LFA payments are granted annually per hectare of utilised agricultural area. The level of the payment can vary between a minimum of 25 €/hectare and a maximum of 200 €/hectare.

Facts and figures

57 % of the overall Utilized Agricultural Area in the EU is classified as Less Favoured Area. Despite the wide percentage of surface designated as LFA, only a limited proportion of farmers benefit from a compensatory allowance. In 2005 approximately 1.4 million farms, representing about 13% of the total number of farms in the EU25, received support under all LFA schemes. Significant variations among Member States can be observed, this variation is due to the eligibility rules put in place by the Member States. The range of payments per hectare can also be very variable, from 25 €/ha to 200 €/ha.

The financial support to LFAs amounted to €8 billion, approximately 18 % of the Community funding for Rural Development for 2000-2006.  In the current programming period 2007-2013, the allocation of the European Agricultural Fund for Rural Development (EAFRD) dedicated to the scheme is € 12.6 billion or 13.9 % of the total Community funding allocation, corresponding to 32 % of the resources devoted to the improvement of the environment and the countryside by supporting sustainable land management (Axis 2 of the Rural Development Policy).

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