The farming industry has much to look forward to in 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 September), NFU president Peter Kendall said global dynamics were swinging in agriculture’s favour.

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

This had been seen in recent months with the strong gains in dairy and cereal markets. Demand for biofuels was one factor behind this, but it was certainly not the only one, said Mr Kendall.

The drought in eastern Europe this summer and Australia’s downsizing of its harvest estimate from 24m tonnes a few months ago to just 15.5m tonnes now had had an even greater impact.

The improved 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”.

He was concerned that livestock producers in the uplands were not benefiting from better prices. He therefore wanted to see more SFP money targeted on 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, she said.

NFU president Peter Kendall says any reductions in single farm payment must be applied equally across Europe.