This was pointed out in a review of 'LotR: A Reader's Companion' in the latest Amon Hen. Its from a paper Tolkien wrote circa 1969 & is now in the Bodleian Library:
Quote:
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The much later dwindling of Hobbits must be due to a change in their state & way of life; they became a fugitive & secret people, driven as Men, the Big Folk, became more & more numerous, usurping the more fertile & habitable lands, to refuge in forest or wilderness: a wandering & poor folk, forgetful of their arts & living a precarious life absorbed in the search for food & fearful of being seen; for cruel Men would shoot them for sport as if they were animals. In fact they relapsed into the state of 'pygmies'. The other stunted race, the Druedain, never rose much above that state.
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How 'canonical' this statement is, is open to question. It seems very 'negative', & perhaps Tolkien was in one of his 'depressed' phases. Certainly, though, he seems to have been pessimistic about the Hobbits' ultimate fate. It seems that Tolkien's words regarding Hobbits in the Prologue to LotR, about them still being around even now were not meant to be taken to mean that they are still around living as they did at the end of the Third Age, in their comfortable Hobbit Holes, but rather as existing in a state little better than the Druedain, scraping a bare existence from their surroundings & living in fear us 'Big Folk' hunting them for sport.