Sossidou E. et. al./Scientific Papers: Animal Science and Biotechnologies, 2013, 46 (2) 446 Sheep and Goat Farming in Greece: Implications and Challenges for the Sustainable Development of Less Favoured Areas Evangelia Sossidou, Christina Ligda, Ioannis Mastranestasis, Demetrios Tsiokos, Foteini Samartzi Hellenic Agricultural Organisation-DEMETER, Directorate General of Agricultural Research, Veterinary Research Institute, 57001, Thessaloniki, Greece Abstract Sheep and goat farming is considered to be one of the most dynamic sectors of the rural economy in Greece, both in terms of employment and overall income. The aim of this paper is to review the levels of sustainability in the small ruminant production systems in two Less Favoured Areas of Greece (LFAs): (1) in the mountainous areas of Epirus, and (2) in the island of Lesvos. In this context, the characteristics of the production systems that have significant impact on the sustainable development of rural areas under study are underlined. The sustainability is examined by the ecological, social and economic points of view, supplemented with cultural and regional elements. The ultimate purpose is to conclude with the challenges for the future rural development in LFAs through the sustainable development of sheep and goat farming. Data is based on surveys undertaken by the SEE-ERA.NET PLUS ‘INDI_SHEEP TRADI_CHEESE’ Project and the ARIMNET ‘DoMEsTIc’ Project, still in process. Keywords: Less Favoured Areas, rural development, sheep and goat farming, sustainability, SWOT analysis 1. Introduction  Sheep and goat farming is considered to be one of the most dynamic sectors of the rural economy in Greece, both in terms of employment and overall income. These systems contain elements that can be proved of high value under the new conditions, related with the need for the protection of the environment and biodiversity and with consumer demands on safe and quality products [1,2]. Majority (over 85%) of the sheep and goats flocks are being reared in mountainous and disadvantageous areas, called as Less Favoured Areas (LFAs) as defined in Dir.75/268/EEC., having an important economic, social and ecological role, and also contributing to the conservation of the environment [3]. The  * Corresponding author: E.N. Sossidou, Tel +3023.1036.5383, Email: sossidou.arig@nagref.gr extensive production system is predominant, with 78% of the Greek sheep flocks and 90% of the goats flocks are being reared in low-input production systems. [3]. For the year 2005, it was estimated that 110.000 farming units with more than 10 animals each were operating, while the average size of a unit was 84 sheep and 99 goats [3]. On the other hand, under the current globalized economy, the term improvement in an agricultural system is related to the term sustainable and a sustainable agricultural system is one in which agricultural activities are economically, environmentally and socially sustainable. Indicators of sustainable development of a Livestock Production System must therefore address issues in all three areas and the interactions between them [4]. The aim of this paper is to review the levels of sustainability in the small ruminant production systems in two Less Favoured Areas of Greece (LFAs): (1) in the mountainous areas of Epirus, and (2) in the island