Agricultural practice continues to cause significant environmental damage e.g. artificial inputs, and a general decrease in habitat heterogeneity has led to declines in farmland species and reduced the quality of the landscape. The focus of agricultural payments on the more productive types of farming, has also contributed to the abandonment of land which was managed using some of Europe’s more “marginal”, farming systems which are likely to be of greater environmental value. In Scotland, crofting is an example of such a high nature value system. Its small scale and low intensity forms of agricultural land use, can create and maintain valuable wild life habitats and iconic coastal and upland landscapes for all to enjoy. The majority of funds continue to be paid out through pillar 1 of the CAP which is insufficiently targeted to produce public goods. Distribution of pillar 1 is unfair and in many countries rewards those most who also receive the best returns from the market. It is important that in future, funds are directed towards encouraging the production of environmental goods.