These Regulations, which replace the Less Favoured Area Support Scheme (Scotland) Regulations 2004 (“the 2004 Regulations”), make provision for the purposes of implementation of Council Regulation (EC) No. 1257/1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund and Commission Regulation (EC) No. 817/2004 laying down detailed rules for the application of Council Regulation No. 1257/1999.

They apply to holdings in respect of which the Scottish Ministers are the competent authority under the Common Agricultural Policy Single Payment and Support Schemes (Integrated Administration and Control System) Regulations 2005 (regulation 1(2)).

Applications for less favoured area support (“LFAS”) are to be made to the Scottish Ministers on a date which they shall determine each year. Failure to meet the deadline will result in reduction of the payment of support (regulation 3).

Eligibility for payment of LFAS is dependent upon the applicant meeting the criteria set out in regulation 4. It can only be paid to an applicant who carries out an eligible agricultural activity (defined in regulation 2(1)) on eligible land (defined in regulation 6). No payment will be made where the amount of eligible land is less than 3 hectares (regulation 5). There is provision at regulation 7 to determine to whom payment should be made where a holding is transferred during a Scheme Year.

LFAS is paid for eligible hectares on farms in Scottish less favoured areas at specified rates (regulations 8 and 12). The rate is fixed according to the grazing category (regulation 9 and Schedule 5) and the fragility of the parish in which the main farm of the applicant lies (regulation 12 and Schedule 8).

The area of land on which LFAS is paid is normally the area of eligible land which the applicant has, adjusted in accordance with a formula set out in regulation 9(1). The manner in which the area of eligible land is adjusted will depend on the grazing category of that land (regulation 9(2)). The grazing category is allocated according to the historical stocking density of the applicant’s land (regulation 9(3)).

A separate stocking density is calculated annually, and for the 2006 Scheme, in accordance with an agreement with the European Commission, is based upon eligible land in 2005 and eligible agricultural activity in 2004. Where the applicant has a stocking density which falls above the maximum stocking density or below the minimum stocking density, then the area of land on which LFAS is to be paid is instead calculated in accordance with formulae set out in regulation 10. The maximum and minimum stocking densities are laid out in regulation 2. There is provision at regulation 10(4) to allow the Scottish Ministers to determine the total number of livestock units where an applicant has not been able to achieve the minimum stocking density because of slaughter in consequence of foot and mouth disease.

Where more than 10% of the applicant’s livestock units are made up of cattle, the area of land on which LFAS will be paid will be increased in accordance with the adjustment set out in regulation 11 and Schedule 6.

Regulation 13 fixes a minimum payment of £350. Regulation 14 contains powers of enforcement. Regulation 16 provides for withholding or recovery of LFAS where there is a breach of the rules of the Scheme. Regulations 19 to 22 deal with offences and penalties.

Regulations 23 and 24 deal with an applicant’s right of appeal against decisions taken by the Scottish Ministers. Regulation 25 makes amendments to the Agricultural Subsidies (Appeals) (Scotland) Regulations 2004 to provide for an applicant’s right of appeal against decisions taken by the Scottish Ministers.

Regulation 26 revokes the 2004 Regulations (and also those instruments which amended the 2004 Regulations) (regulation 26(1)). Regulation 26 also makes a saving provision to ensure that the 2004 Regulations continue to apply to Scheme 2004 payments and Scheme 2005 payments made under the 2004 Regulations (regulation 26(2)).

No Regulatory Impact Assessment has been prepared in respect of these Regulations.