In the piles of paper in his makeshift office at Newbridge Farm, Sutton in Craven, up above Crosshills, on the edge of Keighley Moor, is a draft of the Department for the Environment Food and Rural Affairs' proposals for Upland Entry Level Stewardship (UELS), the scheme for replacing the thin lifeline of Hill Farm Allowance.

Mr Airey is still reading it, getting up at 5 am "so I can come to it fresh", and preparing his comments for the ministry, but his impression is that half of all farmers like him will not qualify and the rest will have to make sacrifices of time and money to get something back.

The hope was for a simple way of maintaining the support, worth £4,000 or £5,000 a year on average, until 2012, when the Common Agricultural Policy is due for relaunching and which could put new ideas on the table for assisting farming in less favoured areas , something which also concerns other countries.

According to Mr Airey, who has spoken on the subject for the National Farmers' Union, a status quo formula was more or less agreed, but the civil servants moved on and the argument started again.

The proposals have been modified since the NFU left the negotiating table this summer, according to his sources, and are more about wildlife protection and less about maintaining livestock production than they expected.

He took over the farm from his late father and runs it with his mother, Rita, and wife, Rosemary, who also works in an insurance office. One of their boys is training as an accountant and the other as a mechanic. The farm supplies Swaledale gimmers to the breeding chain and young male lambs to fattening specialists, using 490 hectares of rented land, 1,000ft above sea level, where a ewe struggles to support more than one lamb on most of the ground. Half the land is classed as Severely Disadvantaged and half as Moorland, under the relics of old systems which are among the endless complications to be dealt with. It all qualifies for Hill Farm Allowance, however, and Mr Airey also earns existing land stewardship grants at both Entry Level and Higher Level.

He said: "I'm subsidised in all directions but I still needed to claim family tax credits until my youngest son was 18. I'd much rather just get a decent price for my animals." But the new UELS does not offer any help with that.

What it does offer is what he sees as a "horribly complicated" system for accumulating points for every hectare under his control – with different rules for different parts of the farm, depending on their history.

There are points for 'dual grazing' – by cattle as well as sheep – which is thought to be good for biodiversity. But this farm is not suitable for cattle. There are points for not spraying or muck-spreading within 40ft of a watercourse, and more points for fencing off protected ground.

But the nature of upland pasture has changed over years of farmer intervention, says Mr Airey. It is likely to include grasses which need fertiliser. An 80ft strip across each beck will be too much grazing for many small farmers to give up, but if they do not, they will lose points for not encouraging 'natural vegetation'.

Another problem is disqualification of land rented on short-term lets, which are common on the fringes of the towns.

For his farm, the most obvious way of gathering UELS points is to take responsibility for another 12 miles of stone walling.

"That could mean £3,000 a year. But if five per cent of it falls down, it will cost me £20,000 to put it back up.

"All these ideas mean taking on more than we are already struggling with. And half of us will have trouble qualifying at all. It looks like they are trying to cut down on what they are spending at the moment."

The UELS proposals do require a minimum level of livestock, which is Defra's answer to the call for a 'food security' element in the equation. Mr Airey has about 700 lambing ewes and would be required to keep that up. What is missing is any guarantee it will pay him to do it.

The farm's land used to be split among five smaller ones, but he is still dangerously small-time in today's terms. "There used to be 16 small family farms getting an income from this hill-top and now there are three and one part-timer."

There is still a little time to argue about the UELS, but other problems for sheep farmers appear to be beyond correction.

Mr Airey reckons he spent a fortnight tagging his animals this year, compared with four or five days in previous years. Each new breeding ewe now needs an individualised tag in each ear and each lamb for slaughter needs one. But he pointed out that slaughterhouses throw away the heads before inspecting the carcases, and movement records have been changed so they are less use than they were before.

Tags cost between 7p and 35p each, depending how long they are expected to last, so up to 70p a sheep has to come out of tight margins. The infamous electronic ID (EID) scheme coming in 2010, despite Defra's last-ditch attempts to avoid it, is a more complicated attempt to make animal tracking work.

But he did praise Defra's organisation of Bluetongue vaccine. Being on the West Yorkshire border with Craven, he got his ration early and used it.

He is 50, and remarkably cheerful, but says the economics of the hills are not working and there is no sign of the idea which will put them right.

"We were just keeping our heads above water until foot and mouth and we haven't got back to that since," he said.

"I'd like to think I could retire at 65 and this farm would still be viable for another young family, but the way everything is heading, I don't think it is going to be. If the supermarket sells a whole lamb at the price of mince, it gets £150, but I get £35. The split used to be more like half and half. That's what needs putting right," said Mr Airey.