The food and farming industries in England are both "unsustainable", according to a Government-appointed commission just published.

It described the present set up as "dysfunctional" and said that farming had become detached from the rest of the economy and the environment.

The Policy Commission on the Future of Farming and Food, chaired by Sir Donald Curry, made a number of recommendations for change.

The report wants farmers to be "custodians of the countryside"

Among the key recommendations, the commission called for early reform of the controversial Common Agricultural Policy, which it said was serving no-one - dividing farmers from their markets, and suppressing innovation.

In another crucial change, it said there should be a re-targeting of public funds towards environmental and rural development goals instead of sustaining production. This would mean rewarding farmers who delivered an attractive, healthy countryside, and making the environment a "selling point, not a sore point for the industry."

Other measures called for were a strengthening of the food supply chain and better co-operation between farmers to reduce inefficiencies and improve competitiveness.

The key theme of the report was to "reconnect our farming and food industry; reconnect farming with the market and the rest of the food chain; reconnect the food chain with the countryside; and to reconnect consumers with what they eat and how it is produced."

2001 was "terrible year"
The report follows last year's foot-and-mouth epidemic. Sir Donald Curry said: "2001 was a terrible year for farming, but the disaster of foot-and-mouth was just the latest blow to hit the industry and the rural economy.

"Radical measures are needed to cut through the deeper malaise. Tinkering at the edges will not turn the industry around. I know this industry is capable of change. It has demonstrated that before and it will demonstrate it again. The resilience and commitment of people in it will see it through."

And he added: "Can we agree straight away that things cannot go on as they are. The situation today in the English farming and food industry is unsustainable, in every sense of that term. Current farming policy is not serving anyone well.

"The Common Agricultural Policy is costing taxpayers £3 billion a year, and farmers are not seeing the benefit. Consumers pay higher prices for their food than the rest of the world, yet farming incomes are on the floor.

"Farmers themselves feel they have lost their sense of purpose - this came through in our consultation very strongly. They don't feel valued."

He said the whole food chain needed to work together and that farmers needed to spot their own opportunities: "Our vision is of profitable farmers that are good stewards of the countryside.

"The English countryside is valued by everyone. It has been through some traumatic experiences in recent years. Foot-and-mouth disease must be a turning point - a watershed.

"Agriculture needs to change"
Prime Minister Tony Blair, who set up the commission last August, welcomed the findings of the report and agreed changes were needed.

A new dawn...or a false dawn?

He said: "As the commission notes, the current situation benefits no-one: farmers, taxpayers, consumers, or the environment. Farmers struggling with the lowest incomes for decades don't need me to tell them that.

"The commission's vision for the future of sustainable food and farming industries is one that many will find attractive. But, as ever, the challenge is in getting there. We want to work with farmers and all other stakeholders to build a consensus for change."

And Secretary of State for the Environment, Margaret Beckett, added: "What we want is a system that rewards farmers for producing quality, not necessarily quantity, and is a disincentive to the restructuring and modernisation that our agriculture needs.

"In a sense, all of us as a society are to blame because the farmers are responding to signals that society has given them. What we seem to ask farmers to do is produce more and more food, more and more cheaply.

"This report points the way towards greater co-operation across the food chain, greater attention to the needs of consumers and a proper appreciation of the importance farming has for our rural environment.

"The Government stands ready to work with the food and farming industries as they address the challenges they face."

The increased emphasis on the environment has been welcomed by groups such as the Royal Society for the Protection of Birds, English Nature, and the Council for the Protection of Rural England.

NFU unhappy at report
But Ben Gill, President of the National Farmers' Union, said that farmers would be angered about one of the report's core proposals - that of taking away 10% of farmers' support payments from 2004 to fund rural development and environmental measures.

He said: "With the industry in its current dire state, it is hardly surprising that we oppose suggestions of taking money from farmers in this way.

"It equates to taking away cash that farmers simply do not have. I must stress that we are not opposed to rural development and environmental spending - quite the reverse. But we have always been against this way of paying for it and today's report has not changed our minds."

Devon farmer, Richard Haddock, who farms in Kingswear, said he backed many of the proposals - but said that the emphasis on quality rather than quantity would mean higher prices in the shops.

He also said that supermarkets have to play their part in the process of change. Click here for Farming Index

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