This came up in convo today with my Agro chap - It was interesting his words;
"If your after biodiversity and conservation, subsidy IS the only way to survive on less than 200 acres, realisitically, as you can rest one field a time for several years and get £90'ha top up for doing so to create rough fallow meadow land (This is the single most valuable and rare type) and graze it once in 5 years, then move to the next field.
The simple numbers facts mean that any less than a carrying capacity of 4/ac of sheep lambing at 150% will be loss making unless you are;
All Grass
All Easycare type
No fodder
Otherwise hidden costs like fencing repairs, etc will average close to £40 an acre per year (more on acid and wet soils) over a 10-15 year life cycle, Incidental costs and vets bills avg £7/ewe etc and then time. - This will quickly eat up the 3 saleable lambs per acre your aiming to produce (max income realistically £100 (£33/h) profit after costs, before time).
This is why my chap is so skeptical, his words "I help 2-3 people a year try this route, and all in all they all loose several thousand a year, and most dont make 5 years before being disheartend and quitting or selling up, those that do, like you dave, adjust to survive. The key isnt saving the world, its doing the least damage while feeding the world, and few people get the difference in the early days, often times the best thing for nature is to just abandon 20-30 acres, and farm the rest of your farm more intensive, than to try to save the entire farm-eco system, and go bankrupt doing so, often resulting in 7-10x more biomass and diversity, furthermore creating an island wildlife can venture out from, but have a safe base to return to as the farming cycle goes through the year. "