THE North is expected to be one of the losers under the Government's proposed progressive flat rate regional payment system.

Stefan Bainbridge, of Dickinson Dees law firm, said the Government acknowledged the switch would redistribute payments among farmers and between different sectors and areas.

Its phased introduction was intended to minimise disruption. "As such it represents a tacit admission that some parts of the industry will lose or gain significantly in terms of the money they previously received in production subsidies," said Mr Bainbridge.

The South-East, East Anglia and the North-West were expected to gain, while the North would lose out.

"Tenants will fare noticeably worse, and landlords better, than under an historic entitlement system," he said.

As far as industry sectors were concerned, flat rate payments tended to redistribute subsidy from more intensive to less intensive producers. General cropping farms, horticulturalists and sheep farmers stood to gain, while large scale, intensive beef and dairy operations would suffer.

One criticism of the Government's plan was that 8,000 English dairy farmers could leave the industry in the next ten years. Other criticisms included the fact that financial discipline and cuts by the EC were likely to reduce payments to farmers by up to 25pc by 2012.

England would have the single flat rate of payment across all agricultural land by 2012, the only exception being a lower flat rate in severely disadvantaged areas such as hill farms.

In the years before 2012, payments would be made up of two elements: a gradually increasing regional payment and a gradually reducing individual top-up based on historic livestock and arable claims in 2000-2002 and the milk quota held as at March 31, 2005.

An arable farmer, for example, would receive a payment in the first year of the scheme equivalent to about 90pc of the average subsidies he received between 2000-2002, supplemented by a flat rate payment based on the total area occupied and actively farmed by the farmer in 2005. The proportion of the available funds to be allocated on the flat rate basis would rise to 15pc in 2006 and then by increments of 15pc each year until 2012.

"Many details of the scheme remain to be worked out and, at this stage, it is impossible to assess how much individual farmers will receive or even how farmers should apply for their entitlements," said Mr Bainbridge. "Nevertheless, the single farm payment scheme is now a fact of life and all involved in the agriculture industry need to familiarise themselves with the fine detail of the reforms, as and when they emerge."