The fragile economic viability of hill farming in the Westcountry, already threatened by years of poor returns, may be made worse by the unintended consequences of the new Single Payment Scheme (SPS), a new study has found.

The report, by the University of Exeter, Duchy College and Cumulus Consultants Ltd, paints a bleak picture of the future for the South West's sheep and cattle hill farmers.

It argues that an uncertain future for hill farming is also threatening the future of some of the South West's most treasured landscapes.

Martin Turner, of the University of Exeter, who led the research, which was commissioned by the Duchy of Cornwall and Dartmoor and Exmoor National Park Authorities, said: "Hill farmers are rightly expected to deliver a wide range of 'public goods', to support wildlife for example, alongside their farming activities.

"However, our work has shown that their current financial position is already far from robust, and that the projected cut-back in public support over the next few years will further compromise the viability of some of these businesses.

"Our research calls into question the longer-term future of traditional hill farming systems unless further targeted support can be found."

The report takes into account projected changes to the SPS, the European Union's principal agricultural subsidy scheme. It was introduced in 2005 and rewards farmers for environmentally-friendly farming practices.

The report estimates that many of Somerset, Devon and Cornwall's hill farmers will lose out and that projected reductions in their subsidy payments will cause farm business income on the average cattle or sheep hill farm to fall by a third by 2013.

Many hill farmers were already getting less than the national minimum wage for their work, with an income of less than £10,000, the study noted.

It also suggests that, while hill farmers are supportive of their new, broader role, they have become more economically vulnerable, which "does not bode well for the future protection, maintenance and enhancement of the natural and historic environment of the region's moorland".

The situation is predicted to be bleaker still for farms in 'extreme' locations, such as Devon's high moorlands. Among the most remote in the region, these farms face the harshest conditions and are even more heavily dependent on public funds for their survival.

Exmoor National Park Authority Chairman John Dyke said: "South West hill farmers have to farm in much more difficult circumstances than most of their lowland counterparts. Over many decades successive Governments have recognised this by assisting our upland areas with a variety of special support mechanisms. These aids have been run down over the last three years and farming in the hills is rapidly becoming unviable."

Nigel Hoskin, chairman, Dartmoor National Park Authority, added: "The integrity of these landscapes is essential, not only for the upland communities, but for all of us. Now is the time for a fair deal for these hills."