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INTRODUCTION

• As in previous years there is no separate claim form for Less Favoured Areas Support Scheme ( LFASS) 2006. You should already have claimed under the LFASS 2006 on your Single Application Form ( SAF) 2005. These Explanatory Notes describe the arrangements for the 2006 scheme which have recently been cleared by the EU. Please keep them safe - you will need to refer to them when we send you your payment letter. You should read them carefully together with the IACS 2005 Explanatory Booklet IACS (1) 2005. Paragraphs 33 to 40 of the IACS (1) relate to
  LFASS 2006.
• For more information contact your local SEERAD area office. Addresses and telephone numbers are listed at Annex F.
• LFASS 2006 is partially funded by the European Community and is provided for in the Rural Development Regulation - Council Regulation ( EC) No. 1257/1999.

Arrangements for LFASS 2006, including payment rates, are broadly the same as in 2005. However, highlighted below are some important points to note. You will find more details about them in the following pages.

• Historic Livestock information: From 2005, the Single Farm Payment replaced the range of production subsidies previously paid under the Common Agricultural Policy. As a result, the previous means of gathering livestock information for LFASS (namely, from Sheep Annual Premium Scheme ( SAPS) and Suckler Cow Premium Scheme ( SCPS) claims) will no longer be available. To address this, the Commission has agreed to let us use SCPS/ SAPS 2004 animal numbers for LFASS 2006.
• Enterprise Mix changes in 2005: If the percentage of livestock units you maintained as cattle in 2005 indicates that you would not, on that basis, qualify for the Enterprise Mix Enhancement or qualify for a different level of enhancement, you must notify us - this is explained more fully in paragraph 8.
• Maintaining an Eligible Activity on a Continuous Basis: Although we will base livestock units on the historic 2004 animal data gathered for LFASS 2005, you must maintain one of the eligible activities outlined in paragraph 2 on your eligible land for the majority of the 2005 calendar year, i.e. 183 days or longer, to qualify for payment of LFASS 2006. If you claimed LFASS 2006 but have not maintained an eligible activity for the majority of 2005 you must notify your local SEERAD area office immediately. This is explained more fully in paragraph 2.3.

Support for the Less Favoured Areas from 2007

A new Scottish Rural Development Plan is being developed for the period 2007-2013. Stakeholder views are helping to prioritise what is best for Scotland and what will achieve the maximum public benefits. Support for Less Favoured Areas ( LFA) is part of this process.

A formal consultation will be launched early in 2006 and the results will help formulate the final proposal. The new plan will be subject to European Commission approval. For further details see http://www.scotland.gov.uk/Topics/Rural/RDR/Intro

1. About the Less Favoured Areas Support Scheme ( LFASS)

Legal Basis of the Scheme

1.1 The Rural Development Regulation EC 1257/1999 emerged from the Agenda 2000 Common Agricultural Policy ( CAP) Reforms. It allowed member states to introduce systems of support in the Less Favoured Areas to replace the Hill Livestock Compensatory Allowance Scheme ( HLCA). The EC Regulation did not allow LFA support to operate on a headage basis beyond 2000, and required payment after that to be made on an area basis.

Support Arrangements

1.2 The four main elements of the 2006 scheme are:

Grazing Category: Eligible Agricultural Activity in 2001

Grazing categories introduced in 2003, were allocated to land based on stocking densities calculated using the eligible land and agricultural activity of the business which farmed it in 2001, the reference year. We will again use this information to determine hectares eligible for payment under LFASS 2006 (see paragraph 11.4.1 of these Notes).

Environmental Elements

The Scheme includes three significant environmental measures. As before:

• to qualify under LFASS you must comply with SEERAD's Good Farming Practice Guidelines at Annex C of these Notes.
• we will enhance the number of eligible hectares for those producers with a clear bias towards cattle. For LFASS 2006, this will apply to you if you had 10% or more of your LFASS eligible livestock units as eligible cattle in 2004 (see paragraphs 8 and 11.5 of these Notes).
• to qualify for payment, you must also comply with the five environmental controls outlined at Annex D.

Payment Rate

The payment rates fixed for LFASS 2005 will be rolled forward for LFASS 2006. This means that we will continue to use: the fragility markers introduced under the 2003 scheme; the location of your main farm; and the grazing category of your land, to determine which rate(s) apply to your LFASS 2006 entitlement. The payment rates are detailed in the table at paragraph 11.6 of these Notes and you will find the parish list showing fragility markers at Annex E.

Minimum Payment

Under LFASS 2006, eligible producers will receive no less than £350. This means that if your area payment is less than £350, we will add on an additional sum to bring the total due to £350 (see paragraph 11.8 of these Notes).

2. Your Claim

2.1 There is no separate claim form for LFASS 2006. You should have made your claim in your SAF 2005 at question 18. Section 6 of the base form includes declarations and undertakings specific to LFASS 2006. To be eligible under LFASS 2006 you must meet certain conditions. You must:

• be at least 16 years of age;
• farm at least 3 hectares of eligible forage land* in the Scottish Less Favoured Areas ( LFA); and have submitted a S.A.F. 2005, duly completed and signed;

*eligible forage land is:

• that which has been accepted by the Department as either Severely Disadvantaged or Disadvantaged within the designated Less Favoured Areas ( LFA) in Scotland. You can view maps showing the Scottish LFA boundary at any SEERAD area office; and
• which meets the definition of forage area for the purposes of IACS 2005 (see paragraphs 33-36 of the Explanatory Booklet IACS(1) 2005.

2.2 You must also carry out an eligible activity during the 2005 calendar year, that is to maintain:

• a herd of suckler cows forming part of a regular breeding herd for the rearing of calves for meat;
• a flock of sheep comprising eligible ewes as defined in the Sheep Annual Premium Scheme Regulations (2529/2001);
• a breeding herd of farmed deer for meat production;
• a herd of goats, llamas or alpacas for fibre production; and/or
• A dairy herd in the ring-fenced milk quota areas as defined in the LFASS regulations, i.e.:
• the islands of Shetland;
• the islands of Orkney;
• the islands of Islay, Jura, Arran, Bute, Great Cumbrae, Little Cumbrae and the Kintyre Peninsula south of Tarbert;
• the islands in the Outer Hebrides and the Inner Hebrides, not already listed; or
• part of the Cowal Peninsula.

2.3 You must maintain your eligible activity for the majority of the calendar year (2005), i.e. at least 183 days. These need not be consecutive days - breaks in eligible activity are acceptable provided the periods of activity in 2005 amount to at least 183 days in total. To meet the eligible activity requirement, numbers of animals maintained must be sufficient to constitute a flock or herd but see also paragraphs 8 and 11.5 which explain stocking requirements in relation to the enterprise mix.

2.4 We will expect you to maintain your stocking density at a level that reflects the natural disadvantage of your land to avoid either under or over-grazing. Paragraphs 11.3.1 and 11.3.2 tell you more about the minimum and maximum stocking density limits that apply. If you breach either limit we will restrict your eligible hectares.

2.5 To comply with Article 14(2) of Regulation 1257/1999, you must undertake to farm in the Less Favoured Areas for 5 years from the first payment of a compensatory allowance, or support payment including the Hill Livestock Compensatory Allowance Scheme.

2.6 You must meet the requirements of the Good Farming Practice Guidelines set out at Annex C of these Notes.

2.7 You must adhere to the environmental controls set out at Annex D of these Notes.

2.8 You must adhere to the requirements of Article 14 (3) of Regulation 1257/1999 on the non-use of prohibited substances (namely substances having a hormonal or thyrostatic action) and of beta-agonists.

2.9 You must allow SEERAD and EC staff or their representatives, access to land, animals and records at any reasonable time for the purpose of establishing compliance with the terms of the scheme. You will also be required to co-operate with such inspections.

Any breach of any of these obligations may lead to the loss of all or part of your entitlement to LFASS.

3. What if my IACS and/or land is outwith Scotland

3.1 Each of the UK Agricultural Departments has its own LFA support scheme so SEERAD can only make payments for LFASS eligible LFA land in Scotland. For LFASS 2006:

• Producers whose main farm is in Scotland: if you submitted your SAF 2005/ LFASS 2006 claim in Scotland, we will base your LFASS 2006 entitlement on your Scottish land only;
• Producers based elsewhere: if you submitted a single application to a UK Agricultural Department other than SEERAD, and have Scottish land, you should also have completed a SAF 2005/ LFASS 2006, including Scottish field data sheets, which you should have submitted to either DEFRA, DARDNI or NAWAD, as appropriate. Those agricultural departments will forward the Scottish data to SEERAD for processing, which will include any claim you made for LFASS 2006;

3.2 In either instance:

• If you were paid LFASS 2005, we will use the livestock data that underpinned this payment to calculate your entitlement under LFASS 2006, unless there has been a significant change to your cattle percentage in 2005, that may affect your level of Enterprise Mix Enhancement (see paragraph 8 of the Notes);
• If you were not paid LFASS 2005, we hold no historic livestock information and will write to you requesting further information (see paragraph 10 of these Notes).

You should direct enquiries about non-Scottish LFA support arrangements to the UK Agricultural Department of the country in which your non-Scottish land is situated.

4. Common and Shared Grazings; and Seasonal and Short Term Lets

4.1 We will base your LFASS 2006 payment on the eligible forage land in the Scottish LFA, as declared in your SAF 2005. This will include short-term or seasonal lets, common and shared grazings. The general Integrated Administration and Control System ( IACS) rules will apply. Land should be available throughout the year (or for a lesser period providing qualifying criteria are met). Any forage land used on a seasonal basis must be close enough to the main holding to make its use an economic proposition.

4.2 If you use any land under a lease arrangement (ie seasonal lets), you will be expected to demonstrate your right to use such land. You must make available documentation to support the terms of the leasing arrangement, for examination at any inspection, or on request.

5. Forage Transfer Arrangements

5.1 If you took over the whole of a holding declared by another farmer in 2005, it may be possible on written application, for the forage area on the SAF 2005 to be transferred to you for LFASS purposes.

5.2 LFASS 2006 rests on the established IACS forage transfer arrangements (full details of which can be obtained from your local SEERAD area office). This means we can only consider a forage transfer if you took over all of the land after the outgoing farmer submitted his SAF 2005, but before he fulfilled all of the LFASS eligibility conditions. The IACS rules also allow SEERAD to pay the outgoing farmer in certain circumstances. For LFASS purposes, a decision would generally (but not automatically) be made in favour of the producer who farmed the land for more than 183 days, that is, the majority of the LFASS 2006 scheme year (i.e. the 2005 calendar year).

5.3 The IACS rules underpin the forage transfer arrangements for all the IACS schemes. You should be aware, however, that the interaction between the detailed conditions of the different schemes, and the forage transfer rules, means that there may be different outcomes from scheme to scheme.

6. Calculation of Livestock Units

6. Livestock unit values are shown in detail at Annex A of these Notes. The animals we will use when calculating your livestock units are as follows:

• for SAPS claimants we will take the greater of either: the ewes and gimmers declared in the flock composition part of the SAPS claim (excluding hoggs); or the total animals claimed within quota (animals claimed within quota may include hoggs);
• for SCPS claimants we will take the greater of either: the cows (but not heifers) declared in the herd composition part of the SCPS claim; or the total animals claimed within quota (animals claimed within quota may include heifers);
• for sheep and/or suckler cow producers ineligible to claim under the premium schemes; we will take breeding females maintained throughout the scheme year and declared separately on three key dates ( excluding heifers);
• for deer, goat, llama and alpaca producers, we will take breeding females maintained throughout the scheme year and declared separately on three key dates; and
• for dairy farmers, we will take livestock units based on litres of milk quota as at 31 March.

These livestock definitions will apply to:

• the stocking density we will use to assess whether your eligible land will be restricted this year for the purposes of the minimum and maximum stocking densities (on the basis of eligible land in 2005 and activity in 2004 - paragraph 11.3 of these Notes refers);
• the stocking density calculation we used to assess your grazing category (on the basis of eligible land and activity in the reference year of 2001 - paragraph 11.4.1 of these Notes refers);
• and the livestock units we will use to assess your enterprise mix, if appropriate (paragraphs 8 and 11.5 refer).

7. Stocking Density

7.1 As in previous years, SEERAD will use stocking densities to meet EU regulatory requirements to avoid over-compensation and to ensure that claimants farm in a sustainable manner. We will calculate your LFASS 2006 stocking density using your eligible forage area (see paragraph 2.1 of these Notes) declared in your SAF 2005; 2004 animal numbers; and, where appropriate, 2004 milk quota information (paragraph 6 refers). An example of the calculation we will use, and the conversion rates for each animal type are shown at Annex A of these Notes. Maximum and Minimum stocking limits are described in more detail at paragraph 11.3.

7.2 Paragraph 6 of these Notes describes in detail the animal information we will use to calculate your livestock units. We will include all your livestock units in your stocking density calculation, unless you operate a dairy enterprise outwith the LFASS ring-fence milk quota area, where we will use the milk quota livestock units to assess the amount of
non-eligible land being used for the dairy enterprise.

8. Environmental Measure: Enterprise Mix

8.1 LFASS rewards the environmental and socio-economical benefits of maintaining cattle in the LFA. As before, for LFASS 2006 there are two levels of enhancement that may be applied to your eligible hectares. Eligibility for these is determined by the percentage of livestock units* maintained as eligible cattle in 2004. Please note that, if you have a dairy enterprise within the LFASS ring-fence milk quota areas described in paragraph 2, eligible cattle will include your dairy quota livestock units.

*calculated in accordance with paragraph 6 of these Notes

8.2 Unless the circumstances outlined in paragraphs 8.3 and 8.4 apply to you, your enterprise mix hectare multiplier will be the same for LFASS 2006 as that assessed for your LFASS 2005 payment on the basis of the 2004 eligible livestock units. You can find information about your eligible livestock units and enterprise mix multiplier in your LFASS 2005 payment letter sent to you earlier this year. The two levels of enhancement are set out in the table below:

**i.e. suckler cows; if appropriate, heifers; and, within the LFASS ring-fence milk quota areas, dairy livestock units.

8.3 If you claimed LFASS 2006 for the first time in your SAF 2005, or for some other reason were not paid LFASS 2005, we have no appropriate historic livestock data for
you. We will write to you shortly to ask you to declare livestock numbers held throughout the 2005 calendar year. We explain how we will gather the information we require, in paragraph 10.

8.4 Farmers whose mix of livestock in 2005 changed may find that the percentage of livestock units they maintained as cattle throughout the calendar year 2005 indicates that a different hectare multiplier should apply to their LFASS 2006 payment calculation. If you think this applies to you, you must notify your local SEERAD area office in writing before 20 January 2006.

8.5 This might affect you if, for example;

• you did not previously qualify for the environmental measure;
• did qualify but now do not; or
• now qualify for a different level of enhancement.

This may be because your suckler cow numbers have increased, or your sheep or other eligible animal numbers that you maintained throughout 2005 have fallen. .the hectare multiplier - i.e. the 1.35 or the 1.70 shown in the above table - changesYou only need to tell us if any percentage change means that You do not have to notify us if your cattle percentage changed - say, from 45% to 25% - but the enterprise mix multiplier remains the same. Cattle only producers cannot be affected - they always have 100% cattle and fluctuations in stock numbers will not affect entitlement to the maximum level of enhancement. If you are in any doubt about whether you need to notify us please speak to your local SEERAD area office. Once you have notified us, we will write to you to ask you to declare livestock numbers held throughout the 2005 calendar year - as with new applicants, we explain how we will gather the information we require, in paragraph 10.

8.6 To assess whether a different hectare multiplier may apply to you, you should look at your livestock records. Convert to livestock units the numbers of suckler cows and/or ewes, gimmers, hoggs, or, in the case of farmed deer, goats, llamas or alpacas, breeding females, on your LFA land on each of three key dates:

1 January 2005 30 June 2005 1 January 2006

Annex A shows the livestock unit conversion rates for each livestock type. Add together the figures for the three key dates for each type of livestock and average them (divide by three). Work out your cattle livestock unit figure for the year as a percentage of your total livestock units. If you operate a dairy enterprise within the LFASS ring-fence milk quota areas (defined in paragraph 2.2 of these Notes), convert the litres of milk quota held on 31 March 2005 to livestock units and add them to your total average livestock units. They should also be included in the total cattle livestock unit figure. Here is an example of someone who had 35% eligible cattle in 2004, but whose balance of sheep and cattle in 2005 seems to attract a different level of enhancement:

Hectare multiplier based on 2004 stock shown on LFASS 2005 payment letter=1.35

Hectare multiplier based on stock held throughout the 2005 calendar year = 1.70. In this example the farmer should write to SEERAD to inform us of the change.

9. Claims based on Existing Information (including Milk Quota)

9.1 From 2005, the Single Farm Payment replaced the production subsidies previously paid under the Common Agricultural Policy. As a result, the previous means of gathering livestock numbers (namely, from SAPS and SCPS claims) will no longer be available. To address this, we will use the 2004 animal numbers that we used to assess your LFASS 2005 entitlement, to calculate livestock units for LFASS 2006.

9.2 If you claimed and were paid LFASS 2005, SEERAD will assess your LFASS 2006 entitlement on:

• your eligible land declared with your 2005 Single Application Form ( SAF); and
• 2004 animal numbers, and litres of milk quota, used to assess your LFASS 2005 entitlement.

If you did not have an eligible activity - as explained in paragraphs 2.2 and 2.3 - for at least 183 days in the 2005 calendar year you must notify your local SEERAD area office immediately. Arrangements for those who were not paid LFASS 2005 are outlined in paragraph 10.

Milk Quota

9.3 If you claimed LFASS 2006 in your SAF 2005 and operate a dairy enterprise within the Scottish LFA we will use your Milk Quota as at 31 March 2004, either:

• if you farm within the LFASS ring-fence milk quota area (described at paragraph 2.2 of these Notes), to assess your eligibility for LFASS 2006, to calculate your stocking density and assess your enterprise mix eligibility.

or

• if you operate a dairy enterprise which is within the LFA, but outwith the LFASS ring-fence milk quota area; and you have other eligible activities in 2005 (see paragraphs 2.2 and 2.3 of these Notes) to qualify for LFASS*, to assess the non-eligible land attributable to the dairying business.

*If you have an exclusively dairy enterprise which is outwith the LFASS ring-fence milk quota area (described in paragraph 2.2 of these Notes) and no other LFASS eligible activities in 2005, you will not qualify for LFASS.

10. Claims requiring Additional Information

10.1 If:

• you claimed LFASS 2006 in your SAF 2005, but were not paid LFASS 2005 and we have no historic livestock data for you; or
• you have notified us, or we hold information that suggests, that your mix of livestock maintained in the calendar year 2005 means that your cattle percentage on that basis points to a different enterprise mix enhancement (explained in paragraph 8);

you should shortly receive a letter from us asking you to declare stock details on the following three key dates:

We will need details of the numbers of suckler cows and/or ewes, gimmers, hoggs, or, in the case of farmed deer, goats, llamas or alpacas, breeding females on your holding on these dates. If you were not paid LFASS 2005, we will use this information to calculate your stocking density (paragraph 7) and, if appropriate, your enterprise mix enhancement (paragraph 8).

If the current assessment for the environmental measure described in paragraphs 8.4 to 8.6 applies to you, we will use the information to calculate your enterprise mix enhancement.

10.2 Once you return this information to your local SEERAD area office, we will be able to assess your LFASS 2006 entitlement.

10.3 In previous years we have asked for additional information if you had:

• eligible sheep or cows, but did not claim livestock premium;
• farmed deer for meat production;
• goats, llamas or alpacas for fibre production; and/or
• LFA and non- LFA land, or land outwith Scotland.

However, because we are using 2004 animal numbers to assess your LFASS 2006 entitlement, we already have the 2004 information you supplied for LFASS 2005. This means that we will not need to ask you for supplementary information for LFASS 2006. However, if you had no eligible activity in the 2005 calendar year (see paragraphs 2.2 and 2.3 of these Notes) you must notify your local SEERAD area office immediately.

11. How will my Payment be Calculated?

Eligible Forage Land

11.1 If you are eligible, we will pay you on the basis of each eligible forage hectare (see paragraph 2.1 of these Notes), adjusted to take account of:

• any ineligible hectares if you have a dairying enterprise in the LFA but outwith the LFASS ring-fence milk quota area;
• any minimum or maximum stocking density restriction that applies to your claim;
• your grazing category; and
• any enterprise mix enhancement you qualify for.

Ineligible Land used for Dairying Outwith the LFASS Ring-Fence Milk Quota Area

11.2 If you have a dairy enterprise outwith the LFASS ring fence milk quota area (defined in paragraph 2.2 of these Notes) but also carry out one of the eligible activities described in paragraph 2.2 of these Notes, we will reduce your LFA forage hectares to take account of land used for dairying. We will calculate the land used for ineligible activity by using the litres of milk quota as at 31 March 2004 in the following formula:

An example of how a payment of this type will be calculated is included at Annex B.

Avoiding Over-Compensation: Minimum and Maximum Stocking Densities

11.3.1 EC Regulation 1257/1999 specifically requires avoidance of over-compensation. Payments will be reduced for land which falls below the minimum stocking density of 0.12 lu/ha that will apply to all eligible farms, irrespective of location or type. If your LFASS 2005 stocking density is less than 0.12, we will base your payment on the number of hectares that will support the stock you actually maintained for LFASS purposes in 2004, at 0.12, the minimum stocking density. We will use the following formula:

*Calculated as per paragraph 6 of these Notes

11.3.2 There is also a maximum stocking density limit of 1.4 lu/ha. If your LFASS 2006 stocking density exceeds 1.4 we will restrict your LFASS eligible hectares using the following formula:

Examples of payments restricted by the minimum and maximum stocking densities are included at Annex B.

Eligible Activity Undertaken in 2001: Grazing Category Value

11.4.1 Under the LFASS 2003, SEERAD allocated a grazing category to each business as a means of reflecting land quality. To do this we needed a relevant snapshot of business activity and we decided stocking densities based on eligible land and activity in 2001 (the scheme year for LFASS 2002) provided an acceptable basis. We calculated your baseline stocking density using the land and stock you had in 2001. The animals we used when calculating your livestock units for the purposes of your grazing category, were those detailed at paragraph 6 of these Notes. If you claimed and were paid under LFASS 2002, we wrote to you in February 2003 to give you an indication of which of the grazing categories below, applied to the land you claimed in 2001:

*Please note that stocking densities are rounded to 2 decimal places, so, for example, 0.195 lu/ha becomes 0.20 lu/ha and 0.194 lu/ha rounds to 0.19 lu/ha.

The grazing category allocated on the basis of 2001 stocking densities remains with each field. If the land composition of your farm did not change between submitting your AAA 2001 and SAF 2005, we will simply multiply your eligible hectares (declared in your AAA 2004) by the hectare value appropriate to your grazing category, to determine the number of eligible hectares which will form the basis of your LFASS 2006 payment calculation.

What if I have acquired a new field with a different grazing category since May 2001, and have included it in my SAF 2005?

11.4.2 Your grazing category applies at an individual field level. This means that if the land composition of your farm changed between submission of your AAA 2001 and SAF 2005, we will look at the 2001 grazing category of each field you claimed in SAF 2005. We will use the 2001 baselined stocking densities associated with the fields you declared in SAF 2005 to determine the appropriate grazing categories applicable to your LFASS 2006 claim. For example, a producer whose holding composition in 2001 placed his 300 ha (declared in his AAA 2001) in category A, subsequently acquired a 40 ha field classified as C. Consequently, for LFASS 2006, the following adjustments would be made to the combined 340 ha. of forage included in his SAF 2005, to take account of both grazing categories:

The payment calculation for this hypothetical producer is included with several other examples at Annex B. If you have questions about the grazing category (or categories) of your farm, please contact your local SEERAD area office.

What if I claimed common grazing land in my AAA 2001 - how did SEERAD allocate a grazing category to this land?

11.4.3 To determine your total eligible forage land claimed on your AAA 2001, we added your common grazing share to your in-bye land. We then divided all your LFASS eligible livestock units (calculated as per paragraph 6 of these Notes on the basis of stock held in 2001) by all your eligible forage land. The single grazing category derived from the stocking density calculated was allocated to both your in-bye and common grazing land.

What if I claimed shared grazing in my AAA 2001 - how did SEERAD allocate a grazing category to this land?

11.4.4 A single grazing category will have been applied to the whole of a shared field by averaging the individual stocking densities of each farmer sharing the field. The field would then have been divided between the producers concerned, pro-rata, according to their share of the total livestock maintained on the field. This approach means that your share of the grazing may be allocated a different grazing category from the rest of your eligible land.

Can I appeal against my Grazing Category?

11.4.5 Yes. The appeals process is outlined at paragraph 15 of these notes.

Environmental Measure: Mix of Livestock Maintained

11.5 The enterprise mix is explained in more detail in paragraph 8. For LFASS 2006 there are two levels of enhancement that can be applied to your eligible hectares (adjusted for grazing category):

* Calculated in accordance with paragraph 6.

Rates of Aid

11.6 In setting the payment rates for LFASS 2006 we aim to recognise the different transport costs faced by farmers across the LFA and the varying degrees of natural handicap affecting the Scottish LFA. To achieve this we will use both:

• the fragility markers introduced under the 2004 scheme. The list of parish codes included at Annex E shows which single fragility marker applies to you, based on the location of your main farm code. (Your parish code is the first three digits of your main farm code); and,
• your grazing category: We will group together land with grazing category A and B as "More Disadvantaged Land" and land with grazing category C and D as "Less Disadvantaged Land". These two groupings have different payment rates within each fragility category, as set out below:

Please note that, although only one fragility marker can apply to your LFASS 2006 entitlement, it is possible to be paid both rates within a single fragility category. This will happen only if you included both More Disadvantaged and Less Disadvantaged Land in your SAF 2005.

Please note:

• if your main farm code lies outwith the LFA, or outwith Scotland, we will pay the standard rate(s) for each ha of eligible land you farm within the Scottish LFA; or
• if your main farm code is based on a mainland parish, but your main farm is located on an island, we will pay the Very Fragile rate(s).

Calculation of your Area Based Entitlement

11.7 We will calculate your LFASS 2006 entitlement as follows:

• if applicable, adjust your eligible hectares from your SAF 2005 to take account of any ineligible dairy activity and/or the minimum and maximum stocking density restrictions;
• multiply your eligible forage hectares declared in your SAF 2005 by the appropriate grazing category value(s);
• if appropriate, multiply your eligible hectares (adjusted by your grazing value) by your enterprise mix multiplier; and
• multiply your adjusted eligible hectares by the appropriate payment rate(s).

This will be the amount we will pay you unless the minimum scheme payment top-up at paragraph 11.8 applies. To illustrate how the calculation will work in practice, we have included several hypothetical examples of payment calculations at Annex B.

Minimum Payment

11.8 SEERAD recognises the costs associated with running small farm businesses and for this reason, under LFASS 2006 the minimum payment for an eligible claim will be £350. This means that if your area payment is less than £350, we will pay you an additional sum to bring the total to £350.

12. How and When will I get my Payment?

How?

12.1 LFASS claims will be paid using the Bankers Automated Clearing System ( BACS). We will already have your bank details if you have previously received an LFASS payment or payment for any other IACS Schemes. However, if you have not previously supplied this information you should obtain and complete a form BACS (1) and return it to your local SEERAD area office as quickly as possible. This also applies if you need to change the details we hold.

When?

12.2 Our aim is to start to issue payments in March 2006, with at least 50% of eligible claims being paid by the end of that month and 90% by the end of June.

13. Inspections

It is a condition of the scheme that you must allow SEERAD and EC staff, or representatives, access to land, animals and records at any reasonable time for the purposes of establishing compliance with the terms of the Scheme. You will also be required to co-operate with such inspections.

14. Penalties and Repayment of Allowances

LFASS Penalties

14.1 We must implement LFASS strictly in accordance with EC rules. Make sure you understand your obligations and you should consider seeking professional advice if necessary. If you do not observe the conditions of LFASS outlined in paragraph 2 of these Notes you will forfeit all or part of your payment. If you make a false declaration, as a result of serious negligence, then you will be excluded from the LFASS for the year. If you make a false declaration intentionally, you will be excluded from LFASS for the following year as well. If you knowingly or recklessly make a false statement for the purpose of obtaining payment for yourself or another person, you and they also risk prosecution.

Good Farming Practice Penalties

14.2 As before, to qualify for LFASS, all producers must meet the requirements of Good Farming Practice set out at Annex C. A breach of Good Farming Practice, depending on the severity, may mean the loss of all or part of payment of LFASS. To ensure that payment reductions are applied consistently and fairly, we have developed a scale of Good Farming Practice penalties. The range of penalties includes: a warning letter for a negligent breach that is rectifiable and has a minimal impact; total loss of subsidy for an intentional breach that has permanent consequences; and penalties of increasing severity in subsequent years, for repeated breaches. Full details will be available from your local SEERAD area office and on SEERAD's website in due course.

IACS Penalties which affect LFASS

14.3 SAF penalties outlined in Annex 2 of the IACS (1) 2005 Explanatory Booklet will apply, if appropriate.

Repayment

14.4 If we discover you have been paid money under LFASS 2006 to which you are not entitled, you will have to repay the amount in full. If the over-payment occurs through a breach of the scheme conditions, SEERAD will charge interest from the date of notification of the overpayment until full recovery, including interest, has been achieved.

15. Land Classification: Applications for LFA classification and Appeals against decisions; and Appeals against Grazing Categories

Application for LFA Classification

15.1 If you are not satisfied with the current classification of your farm you should in the first instance write to your local SEERAD area office. We will arrange to inspect your land at an appropriate time and consider whether conditions merit a re-assessment of the existing classification. We will notify you of our decision once all aspects of your case have been considered. If you are dissatisfied with the outcome of your application, you may follow the appeals process outlined at paragraph 15.2.

Appeals against LFA Classification

15.2 If you are unhappy with any SEERAD decision in relation to an application for LFA classification, you have the right to have your appeal considered by an independent body, through your local SEERAD area office. In this event, an external appeals panel would be set up to review the original classification.

Appeals against Grazing Category

15.3.1 Paragraph 11.4 of these Notes explains how we assessed your Grazing Category on the basis of your stocking density in 2001. If you are unhappy with the category allocated to the land declared in your AAA 2001 you may appeal against a grazing category decision, only in the circumstances specified below:

Unrepresentative Stocking Levels in 2001

Q Unusual circumstances in 2001 meant that my stocking levels that year were significantly lower than usual. Will you consider reassessing my grazing category?

A We will only consider reviewing someone's 2001 stocking density position for the purposes of the Grazing Category, if they can provide documentary evidence that clearly demonstrated that it was not typical of their usual stocking pattern. It is important to remember that the LFASS stocking density calculation is not intended to cover all the animals on a holding.

Developers

Q I took on land which carried little (or no) stock in the 2001 reference period and am in the process of building up the herd/flock in line with my business plan. Can I have the grazing category of the land reassessed on the basis of the maximum stocking levels outlined in my plan?

A Not necessarily. The presumption underlying the scheme is that a producer's stocking density in 2001 was a reasonable indicator of the overall quality of the land. Appeals of this type against the stocking density awarded to a unit will be considered on their merits and take into account all relevant evidence.

Former Agri-Environment Scheme Participants

Q I participated in an agri-environment scheme that involved stock reduction. This scheme has ended and I have since increased my stock numbers. Will SEERAD
re-assess the Grazing Category of my land on the basis of more recent stocking levels?

A This depends on the reason for stock reduction. If it was, for example, to allow suppressed grazing to recover, it would be inappropriate to increase payment to someone who restocks to the detriment of the grazing. We will treat each case on its merits with the aim of ensuring that any benefit or improvement gained under the
agri-environment scheme is sustained.

Control Measures following an Epizootic Disease Outbreak (eg FMD)

Q My animals were culled during the FMD outbreak. How will you take account of this for the purpose of my Grazing Category?

A We may already have taken this into account when assessing your payment entitlement under LFASS 2002, in which case we should have carried forward the adjusted animal figure for the purposes of your Grazing Category. If you are in any doubt, please contact your local SEERAD area office. If this has not previously been addressed, and you have continued to rebuild your stock numbers, we may consider reassessing your 2001 stocking density on the basis of the previous year's stock levels.

15.3.2 In any of the above circumstances, you should in the first instance make representations to your local SEERAD area office. If you are dissatisfied with the outcome and wish the decision to be reviewed you should contact the Principal Agricultural Officer at your local office. If you are still not content then you can appeal under SEERAD's EU Agricultural Subsidies Appeals procedure. This procedure is outlined at paragraph 16.1 of these Notes.

16. Appeals and Complaints Procedure

Appeals against decisions

16.1 If you are not sure why you have been penalised or do not fully understand a decision SEERAD has made in connection with your claim, you should contact your local SEERAD area office for a fuller explanation. If you are not satisfied with this explanation and wish the decision to be reviewed you can appeal under SEERAD's EU Agricultural Subsidies Appeals procedure. You have 60 calendar days from the date of our decision letter in which to submit an appeal. This procedure consists of 3 stages: an in-house review, an external panel review and an appeal to the Scottish Land Court. Copies of the appeal form and explanatory booklet are available from area offices, from the Appeals Secretariat, and from the Department's website: www.scotland.gov.uk/Topics/Agriculture/grants/Standardsservices/Appeals/Appeals . If you are unsure if you have the right to appeal or have any other questions, contact the Appeals Secretariat, SEERAD, 47 Robb's Loan, Edinburgh, EH14 1TY. Please note that the appeals procedure does not deal with complaints about standard of service.

Complaints about Standard of Service

16.2 If you have a complaint about the standard of service we provide, you should proceed as follows:

• You should discuss the matter of concern with the manager of the team you have been dealing with. This is likely to be either your Area Office or a team in Edinburgh. They may be able to answer your concerns to your satisfaction.
• You may write formally to our central complaints team at the address given below.

What will happen to my complaint - approach to local team head

• Contact the person in charge of the team you have been dealing with, and explain your concerns. If you are unsure as to their identity, ask your Area Office or the central complaints team for assistance. You may complain in person, over the phone, in writing, or by e-mail. We would encourage personal contact as it may allow us to resolve the matter to your satisfaction better and sooner.
• The team head will ask for your details, and for information on your complaint. If they can, they will address the matters raised on the spot. They may have to note some and look into these afterwards. During contact, they will ask you if you wish to have the matter formally logged in our records as a complaint. If you ask for it to be logged as a complaint, the team head will carry out any follow up action necessary, and write back to you within 2 weeks confirming the outcome discussed and/or giving a response to any further action. The letter will indicate what you can do if you are still dissatisfied. The team head may phone you after you have received the letter to clarify any points you may have.

What will happen to my complaint - approach to the central complaints team

• You may write formally to our central complaints team, using our complaint form. Copies of the form are available on request from your Area Office or from the complaints
  team. A copy is also available on the Scottish Executive website www.scotland.gov.uk/Topics/Agriculture/grants/Standardsservices/Appeals/Complaints
• You do not necessarily have to approach the person in charge of the team you have dealt with before submitting a form, but we would encourage this as a first step. We ask you to indicate your complaint briefly on the form. This is so we avoid any misunderstanding and that we can clearly identify the individual aspects we need to address in our reply. We ask you then to attach a more detailed note with background to the circumstances that led to your complaint.

Other ways to complain

• You may also use other ways to complain. You may ask your Member of the Scottish Parliament (or alternatively your Member of the UK Parliament) to take up your complaint with the Minister for Environment and Rural Development at The Scottish Executive, Pentland House, 47 Robbs Loan, Edinburgh, EH14 1TY.
• If you have used our complaint procedure and are still not satisfied, you (or your representative) may ask the Scottish Public Sector Ombudsman to investigate your complaint. Your representative may be an MSP, local councillor or any person you consider suitable to represent your interests. Your complaint must be submitted to the Scottish Public Services Ombudsman, 4 Melville Street, Edinburgh, EH3 7NS, within 12 months after the day on which you first had notice of the matter which you are complaining about. Further information about the Scottish Public Sector Ombudsman is available at www.scottishombudsman.org.uk

Useful address

• If you are unsure about the procedure, or require any further information, please contact the Central Complaints Team at:

SEERAD Central Complaints Team
Room 028
Pentland House
47 Robbs Loan
Edinburgh
EH14 1TY

Enquiry Tel no: 0131 244 3111

Email address: SEERADCAPM1@scotland.gsi.gov.uk

Or you may wish to contact your Area Office

• If you are satisfied with the service we have provided, or wish to highlight some exceptional performance, we would be happy to hear from you. Should you have suggestions about how we can build on the service we provide, these will also be welcomed.

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