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The paper discusses changes of criteria of the LFA (Less Favoured Areas) classification in the European Union and analyses the development of economic indicators of farms in the LFA and NON LFA in the Czech Republic in 2004 – 2008. Results revealed that an increases of differences of economic results of agricultural holdings in the LFA and NON LFA. Subsidies to agriculture have been increasing on the long-term basis but the increase has slowed down; total subsidies calculated per hectare of agricultural land decreased for the first time (by 1.3%) in 2008. Misbalance in the structure of subsidies to LFA and NON LFA and among member states of the EU 15 and the Czech Republic decreases the competitiveness of the agriculture in the Czech Republic. Further increasing differences in levels of gross incomes in agriculture and other sectors of national economy causes the outflow of young workers mainly from rural areas

Different farming conditions of agricultural holdings in the LFA and NON LFA