Rural Development policy 2007-2013
Review of the Less Favoured Area (LFA) scheme
The Commission has adopted a
Communication on 21 April 2009
on a better targeting of the aid to farmers in areas with
natural handicaps. The Communication is seeking the testing
of a proposed set of 8 soil and climate criteria which might
be used to objectively assess and delimit agricultural areas
suffering from natural handicaps. Member States are being
asked to undertake simulations of these criteria using
national data sources so as to enable the review process
team to gauge the likely impact of the criteria prior to the
presentation of a legislative proposal.
Why is the LFA scheme being reviewed?
In 2003 the implementation of the LFA scheme was subject to
criticisms in a
report of the European Court of Auditors, in
particular as regards the designation of intermediate LFAs and
the lack of targeting of the aid.
The Rural Development Policy (RDP) for 2007-2013 includes a
significant evolution of the LFA scheme: within the new
strategic approach adopted to enhance RDP's contribution to the
overarching objectives of the EU, the natural handicap payments
in mountain areas and in other areas with handicaps became part
of Axis 2, which aims at improving the environment and the
countryside by supporting sustainable land management.
In this context and taking into account the Court of Auditors'
concerns, the approach for designating the intermediate LFAs was
substantially reviewed: according to Article 50.3 (a) of
Regulation (EC) No 1698/2005 intermediate LFAs are those
suffering from natural handicaps, which do not tend to change
over time, removing the reference to the socio-economic criteria
used in the past. The Council also indicated that these areas
should be characterised by extensive agriculture considered as
important to land management.
However, in 2005 the Council could not find an agreement on a
possible Community wide system for classifying intermediate LFAs,
more in line with the new policy objectives. It therefore
decided to maintain the previous LFA system and
called for the Commission to undertake a review of the LFA
measures implementation and to present a report and proposals
concerning the future payment system and designation of LFAs for
a Council decision.
What has been done so-far to address the problems raised by
the Court of Auditors?
The Commission departments launched the LFA review exercise
by way of an independent evaluation concluded in November 2006.
Meanwhile, a panel of soil, climate and land evaluation
experts, co-ordinated by the Joint Research Centre of Ispra, was
tasked to elaborate a scientific approach which could support
the delimitation of intermediate LFAs. Based on FAO's
'Agricultural problem land approach', the expert panel
identified a number of soil and climate criteria indicating, at
a certain threshold value, severe limitations for standard
European rain fed agriculture.
The conclusions of the expert panel were subject to a wide
ranging consultation, namely in the framework of an LFA expert
group made up of the representatives of European Research
Institutes and of the National Authorities that met on
14 November 2007, 23 April 2008 and on 25 June 2008. As a preparation and a
complement to the works of the LFA expert group, approximately
80 technical bilateral meetings between the Commission
departments and the Member States have taken place since the
second half of 2006, to discuss the current delimitation system
and the applicability of possible common bio-physical criteria
in each Member State.
An inter-service steering group (ISSG) was set up in December
2007 with the task of guiding the analysis of the economic,
social and environmental impact of the revision. It is made up
of representatives from 14 Directorates General and Services of
the Commission. The ISSG launched a public consultation in
spring 2008 on four possible options for review, focussing on a
new delimitation of the intermediate LFAs.
An analysis of the economic, social and environmental aspects
of the issues linked to the LFA scheme was
undertaken in order to issue a Communication to the European
Parliament and to the Council in April 2009.
What are the main problems identified?
The issues justifying a revision of the LFA scheme, namely as
regards the so-called 'intermediate LFAs' are:
- the inconsistencies of the current delimitation system with
the revised objectives and the strategic approach set down for
the Rural Development Policy for 2007-2013,
- the extreme diversity of the criteria used by the Member
States for designating the intermediate LFAs that may lead to
unequal treatment of beneficiaries,
- the insufficient targeting of the aid in the light of the
objectives of the measure.
What are the main policy objectives?
The aims of the revision responds to the critical factors
identified for the current system. Taking into account the high
degree of subsidiarity characterising the RDP, it is envisaged
to set up a rigorous and transparent approach for implementing
the LFA support scheme, targeted at the achievement of the
strategic objectives of the Community.
The main policy objective of the review are therefore:
- 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 ensure the transparency and controllability of the aid
scheme, its consistency and complementarities with the other
measures of the first and second pillars of the CAP;
- to limit, as far as possible, the administrative burden
linked to the implementation of the measure.
What are the main policy options?
The Commission presented a Communication to the
Council, the European Parliament, the European Economic and
Social Committee and the Committee of the Regions in April 2009. The
Communication discusses the four following options for
reviewing the delimitation and payment system for intermediate LFAs:
- 'Status Quo+', empowering the Member States to delimit LFAs according to national indicators of natural handicaps and
excluding previously used socio-economic criteria, establishes a
'no policy change' reference scenario, consistent with the new
LFA rationale and close to the current situation;
- 'Common Criteria', combines an LFA delimitation based on
common and objective criteria referring to natural handicap with
a limited revision of the eligibility rules, in order to improve
- 'Eligibility Rules' places emphasis on a common framework
for coherent eligibility rules to be applied at farm level within the
designated areas, in order to further enhance the territorial
- 'High Nature Value' 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
A more detailed description of these options is available at the
consultation paper published on 22 May 2008.
- Summary of the response to the consultation [pdf]
- Presentation analysing the response to the consultation [pdf]
Are there new criteria for designating Less Favoured Areas?
The Commission departments are analysing possible options for
reviewing the current delimitation methods.
Within the options considered and submitted to public
consultation, there are a number of soil and climate criteria
identified by a panel of soil, climate and land evaluation
experts, co-ordinated by the Commission's Joint Research Centre of Ispra.
Which stakeholders and experts have been consulted?
The Inter-Service Steering Group in charge of the impact
assessment has already held a series of hearings aimed at
gathering the views of experts and of stakeholders on:
- the threats posed to the continuation of sustainable
farming systems in areas with natural handicaps,
- the drawbacks of the present modalities for designating LFAs
and for granting the aids,
- the changes that could be introduced to improve the
effectiveness and efficiency of the LFA scheme.
On 3 April 2008 the group presented four possible scenarios for
revision of the LFA payment and delimitation system to the
Advisory Group on Rural Development, made up of representatives
of stakeholders active in the field of Rural Development
Policies. An in-depth discussion of the options within an ad hoc
working section of the same advisory group was held on
15 July 2008. The impact assessment process and the four review
options were also presented to the Advisory Group on Agriculture
and Environment on 17 June 2008.
On 22 May 2008 the ISSG invited interested parties and civil
society to submit contributions on the basis of a
consultation document describing the four review options. By 30 June, 109 contributions
were received, by NGOs, individuals, national and regional
authorities. They will be summarised in the impact assessment
What is the planned timetable?
The Commission presented a Communication to the Council, the
European Parliament, the European Economic and Social Committee
and the Committee of the Regions on 21 April 2009. The
Communication will pave the way for a Commission proposal to
make the LFA delimitation and payment system more effective.
Are the delimitation criteria for mountain areas concerned?
No, the review exercise is focussed on the delimitation of
Is a new LFA map available?
No, the Commission departments are analysing possible options
for reviewing the current delimitation of intermediate LFAs.
It is not possible, using the pan-European data available, to
draw a map of the areas that would be delimited under each
option, as this would require the use of appropriate statistics
indicating the proportion of the agricultural land that would
qualify under the relevant criteria at LAU2 level.
The Communication is asking Member States to provide
simulations of the proposed 8 soil and climate criteria using
data available to them. This will enable the review team to
assess the likely impact of the criteria prior to the delivery
of a legislative proposal and a new classification system,
likely to be in place by 2014.