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Hill farming systems in Scotland are the result of long evolution and adaptation to financial, social and political changes. Farming in the hills is a major contributor to rural industry and plays an important role in the economy, environment and social cohesion of these areas. However, it is fragile and has been dependent for many decades on high and continued levels of support payments. Agricultural land managers in these hill areas are also under increasing pressure from the other land use groups whose interests lie outside farming. With recent agricultural reforms, shifts in policy orientations regarding land use and changes in support, the future role of hill farming remains uncertain. This thesis sets out to examine the role of hill farming in this context of change, by investigating how hill farmers respond to changing policy, by understanding what other interested stakeholders expect from the hills, and exploring how hill farmers may have to adapt their farming system in response to these changes and expectations. Using an adaptive conjoint analysis method, stakeholders’ expectations have been assessed. Multivariate analysis and participative research with hill farmers have also been carried out, to typify their management responses to policy changes, using the 2003 CAP reform as an example. Stakeholders’ expectations and farmers’ types were then used in a linear programming optimisation model, to explore how hill farmers can maximise their financial margins under different policy and market change scenarios, and how their motivation is a drive towards adaptation. The results suggest that whilst livestock production is identified by stakeholders as one of the most important features for the hill areas, the continuity of livestock farming in the hills is threatened, as hill farmers are strongly affected by policy and market changes. This research also shows that there is a strong diversity in hill farming systems and in hill farmers’ management styles and motivations. That, perhaps, is one of the most important factors to acknowledge when formulating policies. This research also highlights the vulnerability of hill farming businesses (especially hill cattle production) to market price volatility, policy, subsidies and support changes, making it difficult for any hill farmer to withstand these fluctuations. Although different land uses, such as planting forestry, potentially bring substantial economic benefits, they are dependent upon many other restricting factors, including government grants, and require long-term commitment before benefits are seen. Integration of different land uses and productions could be one economic option for these areas, but a set of measures, perhaps including livestock-linked subsidies that recognise the diversity of hill farmers is needed, as well as options for hill farmers to be able to provide other public goods. Unless there is stability in market prices, a policy drive towards increasing efficiency, adequate subsidies and support and more readily attractive diversification options, including the provision of other ecosystem services linked to these grassland systems, this thesis suggests that there is a danger of hill land abandonment, a further decrease in hill farming activity, leading eventually to a decline in rural areas, not unlike many other marginal hill and mountain areas in the UK and Europe.

Scottish hill sheep systems are comparable to other extensive sheep systems in harsh environments around the world. They face a number of difficulties, including low productivity, poor economic viability, labour availability and capability, and ensuring good animal welfare. They do however, play an important role for rural communities, environmental management, and production of sheepmeat and breeding animals. Exploring alternative approaches, such as Precision Livestock Farming (PLF), to overcome these difficulties is essential. PLF has been successfully applied to intensive systems but few examples exist for extensive systems, such as hill sheep systems. Pregnancy supplementation and retention and culling decision making are both key processes within hill sheep systems. How they occur can have major impacts on productivity and profitability of the system. Therefore, the aim of this thesis was to investigate and understand the capacity for application and potential impacts of PLF for hill sheep systems, when considered for two challenge areas: ewe pregnancy supplementation, and ewe retention and culling decision making. This research was carried out on a 2,200 ha hill sheep research farm, in the West Highlands of Scotland. The majority of the land was unimproved hill pasture and around 230 ha of improved fields and semi-improved parks. Methods were applied and data collected from October 2013 to October 2016 from a long-term performance recorded research flock of 600 Scottish Blackface and 300 Lleyn breeding ewes. All 900 breeding ewes were assigned to one of two management approaches. The first approach was a conventional one, where management decisions were carried out at a flock level, or without the assistance of Electronic Identification (EID) technology, and was comparable to conventional hill sheep systems. The other approach was PLF, where management decisions were carried out at an individual animal level, assisted by EID and weighing technology. A PLF approach was applied to allocate supplementation to pregnant hill ewes based on liveweight change. Inputs required (feed) and outputs (number of lambs born and liveweight of lambs) were similar between ewes allocated supplementation in the PLF approach and those allocated supplementation based on a stockperson's assessment of their condition. However the PLF approach successfully moved more individual ewes out of higher supplementation levels. This PLF supplementary approach could be consistently applied to any sheep system and constitutes a framework which can be easily modified and further developed. The work also demonstrated that liveweights could be collected quickly and reliably using automated weighing technology. Such technology and liveweight data are likely to be key for future developments of PLF approaches for hill sheep systems. The second challenge targeted was retention and culling decision making of ewes from the breeding flock. Questionnaires carried out with stockpeople revealed many different reasons are used to make culling decisions. These reasons were mostly based on the stockperson's opinion and subjective assessment, and that little recorded information was used to inform decision making. Culling at a fixed age occurs on some hill sheep systems but this limits longevity and the associated benefits of increased longevity. Within the research flock, used in this thesis, the majority of ewes left the flock as a result of culling decisions and not because of death. However, findings showed that ewes retained beyond a standard cull age, were able to perform as well or better than younger ewes. A flock that did not cull based on age had the potential to improve profitability. Comparison between individual ewes' performance, genetic and appearance attributes and their following year's performance, found that many common culling reasons (including stockpersons opinion, number of lambs previously weaned, ewe age and ewe appearance) had little association with future ewe performance. Conversely, promising attributes included liveweight, Body Condition Scores and liveweight change, all of which require data to be collected prior to any decision making. A PLF approach, that uses data collected about a ewe over its lifetime to make retention and culling decisions, has the potential to improve productivity and profitability of the system. In conclusion, this thesis established that PLF can be applied to hill sheep systems using commercially available EID and automated weighing technology, as well as individual sheep data to inform decision making. Such application has the potential to improve productivity and profitability. For PLF to be widely adopted onto commercial sheep farms, further research will be required to demonstrate greater benefits to the system, including labour and welfare, and to better understand farmers' motivation towards uptake. Adoption of PLF approaches into hill sheep systems has the potential to benefit individual farms and the industry as a whole.