FARMING: CABINET Secretary for Rural Affairs Richard Lochhead has announced that Less Favoured Areas Support Scheme (LFASS) payments, worth about £61m, will be lodged in bank accounts this Friday, three weeks earlier than last year.

CABINET Secretary for Rural Affairs Richard Lochhead has announced that Less Favoured Areas Support Scheme (LFASS) payments, worth about £61m, will be lodged in bank accounts this Friday, three weeks earlier than last year.

That will come as welcome relief to hard-pressed hill farmers who are finding it difficult to make ends meet with both sheep and beef cows.

Stuart Ashworth, head of economics at Quality Meat Scotland (QMS), set the scene in his opening address at a conference held jointly by the Scottish Beef Cattle Association (SBCA) and the National Sheep Association.

He told delegates in Bridge of Allan yesterday that recent costing showed that while net margins for less favoured area upland ewe flocks had improved, they were still only doing slightly better than breaking even.

Recently improved returns for prime lambs had come too late to affect hill flock incomes, where losses were the norm.

It was the same with beef cows, where, despite improved returns for finishers that allowed them to break even, the increased prices had not fed through to store cattle producers.

The net effect was a continuing contraction in the beef breeding herd and a dramatic loss of breeding ewes.

"Breeding ewes in Scotland are down to 2.8 million, the lowest number since 1920," said Ashworth.

The loss of breeding animals was one of the main focuses of the conference.

SBCA president John Cameron challenged Lochhead in his opening remarks. "It is imperative that LFA money is effectively spent to maintain the livestock industry", and asked: "Has any economic work been done to evaluate in financial terms the contribution that LFA livestock sector makes to the social fabric?"

In wide-ranging speech, Lochhead told the conference that a consultation on the future of LFASS ended on December 19 and he was considering the responses.

He explained: "We recognise that linking LFA support to farming activity is an important way of helping to ensure that production levels are maintained in our more remote areas. "I already have sections of industry wanting support to be concentrated on those that produce the most. And there are other parts telling me that these areas already get a disproportionate share, and support should be targeted where it is needed most - in the fragile communities that are more remote from their markets and where the challenges are greatest.

"Perhaps that tells me there is no simple one-size-fits-all solution, and that support needs to be shaped and moulded according to the nature of land and farming activity in different parts of the country.

"This also tells me we need to avoid a flat payment across the whole of Scotland when we move from a historic-based single farm payment to area-based payments."