The farming industry has much to look forward to in the years to come, though the way it is supported by the taxpayer faces further change.

Addressing a fringe meeting at the Liberal Democrat autumn conference in Brighton on Monday night (17 Sept), NFU president Peter Kendall said the global dynamics were swinging in agriculture’s favour.

The emerging economies of India and China, the continued growth in global population and the challenges arising from climate change all presented opportunities for British agriculture.

This had been seen in recent months with the strong gains in dairy and cereal markets.

And while demand for biofuels was one factor behind this, it was certainly not the only one, said Mr Kendall.

The drought in eastern Europe this summer and the fact that Australia had downsized its harvest estimate from 24m tonnes a few months ago to just 15.5m tonnes now had had an even greater impact.

This improvement in market conditions for some commodities raised questions about the future role of the single farm payment, however.

Liberal Democrat agriculture spokesman Roger Williams said the SFP was the reward for keeping land in good agricultural and environmental condition. As such it was a “pretty expensive insurance system”.

“We don’t pay other industries for meeting basic standards”

He was concerned that livestock producers in the uplands were not benefiting from better prices. He therefore wanted to see more SFP money targeted to these areas by modulation.

“If we don’t, we will see massive depopulation and the landscape will change in a way that will not be appreciated by the public,” he told the meeting.

Helen Phillips, chief executive of Natural England, was even more critical of SFPs, which delivered no more than what was already a statutory level of environmental protection.

“We don’t pay other industries for meeting basic standards,” she said.

The fact that seven times more money went to SFPs than to rural development schemes showed how “horribly skewed” the CAP was. The 2008 “health check” should be used to transfer funds from Pillar 1 to Pillar 2.

Mr Kendall concluded that he would love to see an agriculture that did not need to taxpayer support. And he had no doubt that Pillar 1 payments would be reduced. “But it must be done in a common way across Europe that does not distort competition.”