'Less favoured areas' at heart of Pack's subsidy proposals

Another recommendation contained in The Road Ahead for Scotland, published yesterday, is that those producing lambs in the LFAs should receive 6 payment per animal.

Meanwhile the current Scottish Beef Calf Scheme, which delivers a payment for each beef calf born, would only apply to those farming in LFAs.

In bringing these suggestions forward, the author of the report, Brian Pack, said his aim was to provide more sustainable agriculture over the whole of Scotland.

He did not believe the proposed subsidy payments were of such a size that farmers would revert to a "numbers game" in keeping cattle and sheep purely for the support, but they were sufficiently large to ensure the continuation of active farming in the more remote parts of the country.

Pack, in response to a point made by the president of the Scottish Association of Meat Wholesalers, Alan Craig, said he did not believe that removing the current calf subsidy from those producers in non-LFA parts of the country would dramatically reduce overall beef production.

Craig had pointed out that currently 18 per cent of Scotland's suckler cows were kept in non-LFA and almost half of all cattle going through Scottish abattoirs were finished on productive arable units.

"These areas have many highly efficient and progressive cattle breeders and finishers whose specialist skills in the production of quality Scotch meat may be put at risk as a result of this proposal," Craig said.

Pack responded that it was not possible to have a country-wide scheme. He believed the European Union may buy into the proposal aimed at keeping production in more disadvantaged areas but it would not endorse wholesale support "coupled to production".

The main support mechanism in the Pack plans would be a flat rate payment per hectare but in contrast to an earlier suggestion - that the level of payments should be based on the quality of the ground - yesterday's document foresaw only two levels: those in Less Favoured Areas and those outwith the LFA, with any reference to the Macaulay Land Use classification being omitted as too complicated.

In addition, there would be a top-up fund that would be awarded for certain specific targets, possibly relating to environmental projects. So far, these targets have not been identified.

Pack said he wanted people to look at the principles behind his suggestions and not "get out their calculators and work out their own financial situation".A sentiment echoed by Cabinet secretary Richard Lochhead, who commissioned the Pack report.

But even among the Scottish Government stakeholders' group attending the launch in Perth, most were already working on how the proposals would affect them or their sector.

For those within LFAs in Scotland, any feeling of being on the right side of the support line has to be tempered with a realisation that Europe is currently looking at the whole issue of disadvantaged areas following a report from the European Court of Auditors suggesting some countries were operating to different rules.

David Barnes, a member of the stakeholder group from the Scottish civil service, warned there might be some "tinkering at the edges of existing Scottish LFAs.

Although beyond his remit, Pack said there was a strong case for Scotland increasing the amount of cash it received from Europe for rural development projects, adding that Scotland's allocation was dwarfed by the likes of Malta and Slovenia.