The contribution deals with the development of livestock since 1990. Since that year, beef and dairy cattle numbers have dropped by more than 50 percent in the Czech Republic. This decrease has been partly compensated by an increase in efficiency, yet milk production has dropped to 55% in this period and beef production to 60% compared with 1989. The declining amount of cultivated land in the Czech Republic has resulted in a decrease in the stocking rate and the corresponding production. It adversely influences the economy namely in highland areas. In this sense the high rate of permanent pastures with low stocking rate enables to efficiently exploit the EU direct payments and thus the direct payment system discriminates above all the farms in highlandareas (potato and oat-growing areas and upland production areas).