AREAS of Lakeland hills could be abandoned as a result of the new subsidy regime announced by the Government this month, according to the Country Land and Business Association.

Douglas Chalmers, the CLA regional director for the North and who comes from from Hoff, near Appleby, said that in a worst case scenario the Common Agricultural Policy reforms would lead to depopulation of upland farms with the landscape being left to look after itself.

From 2005, a new single farm payment is being introduced, offering farmers subsidies for the amount of land they farm rather than the food they produce. The system is being phased in over eight years with the portion of the payment based on historical levels of support steadily being withdrawn to create a flat payment based simply on land area.

But different flat rates will apply, with farmers on land in Severely Disadvantaged Areas largely the uplands getting a payment forecast to be between £65 and £85 per hectare - while all other land gets an estimated £210. The idea is that upland farms are usually much bigger, thereby ironing out the disparity. But in the Lake District, and elsewhere, there are plenty of small farms in SDAs.

Mr Chalmers said: "While we accept that there has to be a differentiation between highly productive lowland and upland areas, I am concerned that the combination of using SDA designation as the break point and the large difference between payment levels may lead to some farming families being unable to remain on the land."

Sheep farmers on the Lake District's high uplands would probably not be so badly affected since they tended to have larger farms, said Mr Chalmers. Those who would be hardest hit were intensive beef and dairy herds towards the fringes of SDAs with the most animals on the least ground. In Cumbria, such farms were principally found in Eden, South Lakeland and Furness. Theirs will be a double-hit since densely-stocked farms would have received fairly high levels of subsidy under the current regime based on payment per animal.

Mr Chalmers said: "Farmers nationally will receive the same amount of money as they did under the old subsidy regime and there will be winners and losers. Some people in uplands will be winners as long as they are not highly stocked and have a lot of land.

"What we are concerned about is the farmers who have been investing and improving, and employ staff. They may see a big drop because they have higher stocking rates than average. They are the ones who are going to lose and they are the ones who support more business - whether that is the vet, the mart or whatever. If they decide not to carry on they are going to drag the economy down."

The CLA is to meet nationally to agree a strategy to tackle the Government on supporting SDA farmers while NFU North West said it was working on the issue as a "matter of priority".

Ulverston NFU group secretary Tom Hodgson believed most farms in the Furness and Cartmel, which were generally intensive and fairly small, would be among those to suffer most.

"To knock that fabric of small family farms is sad. The new regime will certainly not halt any farming decline. It may, in fact, accelerate it."

North West Green Party leader and Lancaster councillor Professor John Whitelegg believed a quarter of Britain's farmers could be forced out of business by 2025, according to Green Party calculations.

"This could be devastating for the rural economy in Cheshire, Cumbria and Lancashire. Farm subsidies are going mainly to big landowners, including some of the wealthiest men in Britain, while a lot of smaller farmers are going under thanks to cheaper imports."