Payments under the new Scottish Upland Sheep Support Scheme (SUSSS) are underway.
Under the terms of the scheme, the available funding is divided by the number of eligible animals.
Approximately 101,000 sheep have been included in the scheme this year, meaning producers will receive £57 per ewe hogg.
The Scottish Government expects to pay out up to £5.6 million over the next few days to around 1,100 farmers and crofters.
Rural Economy Secretary, Fergus Ewing, said: “It appears that the new sheep scheme has led to eligible farmers and crofters increasing their number of animals.
"Whilst this may be a welcome indication of confidence in the sector, it does have a bearing on the final payment rates, as EU regulations specify that coupled support schemes must only be used to halt declines in livestock numbers, rather than aim to increase them."
He added: “It has been the Scottish Government’s intention for some time to commence sheep payments in July, so that we could wholly focus on our number one priority of completing as many Basic Payment Scheme and Greening payments as quickly as possible. We are making headway and have now paid over £311 million to more than 17,800 farms.
“We continue to prioritise completing the remaining 2015 payments as quickly as possible and making improvements for 2016."
Payments issued under new sheep scheme
31 July 2016