An increasing focus on rural development issues has characterised the discussion of Common Agricultural Policy (CAP) reform. This reflects new societal demands for tasks and services provided by agriculture particularly in mountain and less-favoured areas (LFA). The regional distribution of CAP and Rural Development support underpins the argument that the territorial dimension implied by CAP reforms has not yet been taken sufficiently into account. The regional variation in the distribution of the LFA scheme between member states testifies this imbalance and underscores country specific priorities. LFAs will have to prove that they are more than a compensation measure, but already providing a range of multifunctional tasks.