EDITING a literary magazine can seriously damage your health and wealth. Take Joy Hendry, for example. She has edited Chapman for more than 30 years, producing on average three issues a year - during which time her earnings have regularly been below the national minimum wage - and has spent the past seven years combating chronic fatigue syndrome.

Come what may, however, Chapman has continued to appear. The 105th issue is out now and at the end of this month Hendry will receive an honorary degree from Edinburgh University for services to literature.

Having devoted no fewer than four issues to celebrating Chapman's centenary, she is eager to move on. Approaching her 52nd birthday, she wants, she says, "to grow old disgracefully" and "get real arguments about literary values going again". In her latest editorial she writes: "The improvement in literary infrastructure and the 'professionalisation' of the industry has brought difficulties in establishing priorities, and in coping aesthetically with the effects of commercialisation."

Hendry is the first to acknowledge that the Scottish literary scene has been transformed in recent decades. In particular, she cites the provision made by the Scottish Arts Council (SAC) for individual writers.

These days, it is possible for writers to have a career, which not so long ago would have been unthinkable. A new book festival seems to spring up every other week and every cough and sneeze of bestselling writers such as Ian Rankin, Alexander McCall Smith and JK Rowling is reported as if it were an edict from the Vatican. Moreover, Unesco has anointed Edinburgh the first World City of Literature.

From the outside looking in, it would appear everything is hunky-dory. "If only" is perhaps a fair summation of Hendry's point of view. Funding for literary magazines like Chapman remains fitful and pitiful and she's never managed to pay herself a salary. Quite the opposite. Once, she recalls, she paid a printer's bill of [pounds]600 out of her own pocket. With 3000 copies to offload at 30p each, and with no support from the SAC, she toured pubs like a Salvation Army foot-soldier flogging the War Cry. The bill got paid and on time but it was an indication of what lay in store.

Hendry was just 19 when she first got involved with Chapman. It began as an eight-page pamphlet called The Chapman, the brainchild of George Hardie and Walter Perrie, who became Hendry's first husband.

They wanted to stir things up a bit and they succeeded. Having been initially rebuffed by the SAC, they railed at favoured magazines like the New Edinburgh Review and Scottish International - "which have as much genuine concern for the arts as has Pravda" - and derided critics of Chapman who had accused it of being "unScottish".

"Scottish as defined by our critics, " they thundered, "is the last thing we want to become . . . We subscribe to the view that, at its best, our culture is an integral part of an ancient European tradition and it is that tradition of Scottishness we seek to promote. Of Scottish literary life today we may reiterate Goethe's comment on the Irish - 'A pack of hounds squabbling among themselves who can band together only to drag down some great stag'. We welcome attacks from our opponents and bear in mind the proverb - 'Cherish the scorn of fools'."

As ever, it seems, the debate focused on how Scottish - or not - a literary magazine should be. If one trumpeted one's Scottishness, one was invariably accused of parochialism. Alternatively, to rejoice in internationalism was to invite derision from chauvinists. Often, invidious and irrelevant parallels were made with publications in other countries where the circumstances were in no way comparable.

Nor has the situation changed much. Every new publication is judged by the degree to which it concentrates on Scottish literary matters. It is a highly prescriptive and blinkered way of approaching things. All magazines, whether literary or not, have their niche. What matters most, surely, is how well written and well read they are.

Need there be any tighter definition?

Chapman 16 was the first which Hendry edited "solo". Up until then, she had edited with Perrie. His interest in Scottish literature was negligible. "In some ways, " says Hendry, "he was right. In others, he was fundamentally wrong". The straw that broke the camel's back was Rilke. Having produced three issues devoted to the Austrian existentialist, Perrie wanted to do another.

At which point, Hendry cried: "Hang on!"

Among her early efforts were issues given over to modern Dutch writing, Scottish drama - Hendry has long been an advocate of a Scottish national theatre - and, in 1975, Scottish writing. The fact that a special issue had to be devoted to indigenous literature suggests that Chapman had rather wilfully and snobbishly neglected its own backyard.

It was also an indication that Hendry was growing more confident in her own judgement. Having studied English at Edinburgh University before taking philosophy, her knowledge of contemporary Scottish literature was minimal. But the longer she edited Chapman, the more she learned. "Editing a magazine is like educating yourself in public, " she says. Gradually, too, she made the acquaintance of writers such as Hugh MacDiarmid, Norman MacCaig and Tom Scott.

In 1974, she recalls, she first met Sorley MacLean, whom she got to the Cambridge literary festival a year later. Over lunch, he turned to Hendry and Perrie and declared:

"You know I thought the pair of you were neo-Platonists. Thank goodness you're not." On a whim, she visited him on Skye and promised to publish in Gaelic the third part of his poem, The Cave Of Gold. Some years later, in an issue devoted to long poems, she published the whole poem in Gaelic and English. "This is a superb issue, " she says, "even though it's typographically impossible to read."

The message, not the medium, could have been Chapman's cri de coeur, much to the chagrin of the SAC, which occasionally attempted to withdraw its funding. The design of the magazine was amateurish and Hendry herself typeset it "on one of those golf-ball things". In 1977, she was given notice that the SAC intended to withdraw her grant on the grounds of poor editorial judgement. It was a decision, she says, that she fought "tooth and nail". With the support of many writers, she won, but the victory was Pyrrhic: funding was reduced to two-thirds its previous level. Thus she "limped on" for another 10 years.

Hendry's instinct is to put her faith in a stable of writers while remaining open to the unknown. Inevitably, this led to unevenness and reservations about the quality of contributions. Like MacDiarmid, who once said his job was not to lay a tit's egg but to erupt like a volcano, emitting not only flame but a lot of rubbish, Chapman's charm lies in its eclecticism and unpredictability. You never know what an issue is going to contain. If it began life as a poetry magazine, under Hendry's editorship it has embraced essays, short stories, plays, reviews and original art work. There have been covers illustrated by Alasdair Gray and John Bellany and, in the latest new issue, drawings by Joyce Gunn Cairns. Among Chapman landmarks, says Hendry, were Scotland: A Predicament For The Scottish Writer, four issues which examined women's contribution to Scottish culture and special focuses on Tom Leonard,

Iain Crichton Smith, Hamish Henderson and Thurso Berwick, the pseudonym of the folklorist Maurice Blythman.

"What makes the Chapman 'achievement' unique, " says Hendry, "is its diversity and range of subject matter, style, the incorporation of so many genres, and its relationship with writers, which shines through in each issue. Each issue is structured to be an integrated whole, with a narrative running throughout, though it would be difficult to put that narrative into other words . . . My approach to the structure of Chapman is like the composition of a poem - this makes the final make-up of the magazine very difficult to do, but the result is more than worth it."

It surely is. But what makes Chapman such an essential cog in the national literary wheel is the vehicle it provides to transport writers from their private world to a public one. Yet the role of so-called "little" magazines remains under-valued by our cultural strategists. The most Hendry ever received for her endeavours was [pounds]15,000 per annum.

Ten years ago, Planet, Chapman's Welsh equivalent, got [pounds]75,000 a year. The disparity is embarrassing and shameful. What - if anything - the Cultural Commission and a World City of Literature can do about that will be interesting to see.