In this report, The Review of the Less Favoured Areas Scheme (HL Paper 98) , the European Union Committee calls for the swift adoption of reforms to the EU Less Favoured Areas (LFA) scheme, a method of distributing EU agricultural funding to disadvantaged areas where farming land might otherwise be abandoned. The report stresses that the justification for the LFA scheme is to maintain farming in marginal areas where farming activity generates benefits for the environment and landscape, rather than to compensate for regional economic hardship. Other conclusions and recommendations include the following. The Committee also points out that climate change is likely to have an impact on which areas could, and should, be helped to maintain farming activity. The report supports recent proposals by the European Commission to establish a set of EU-wide biophysical indicators to identify disadvantaged areas based on natural handicaps such as poor soil, extreme climate and steep slopes rather than economic hardship. The Commission’s proposals may need to be modified to take into account the particularities of the UK and Irish maritime climate, which bring different challenges than those faced by mainland European farmers. Criteria such as field capacity days, which would recognise the impact of consistent rainfall, might need to be included to ensure that genuinely handicapped areas in the UK are captured by the new indicators. The Committee also call for a common EU-level framework for the criteria used to determine whether farms in Less Favoured Areas qualify for aid. The Committee echo the European Court of Auditors’ finding that they have been unable to draw firm conclusions about the effectiveness of the LFA scheme in meeting its objectives.