KF, the second part first. What seems to be forgotten too often is that when farming in a small island (much of which is of a pretty poor quality agriculturally) is that the competition for resources is ultimately much higher. This includes labour and particularly land. You only just have to take land and ask yourself whether 2% return on capital is attractive? Now run this against your land prices, Canada's, the Ukraine etc. Remove the subsidies and commodity production will not make money without sustained price rises, and it will take more than one year to convince capital to move in. To reach a ROC expected by many, say 8%, will need profits to quadruple!!!
The suggestion that farmers should learn about marketing always amuses me, I can never understand how an industry feeds billions without knowing how to sell its prodction! Yes I know that the comment is about becoming more near market but that involves farmers markets, developing niches etc. That is something for the few and I suspect many have decided to focus on what they do best and that is be production. One cannot get away from the fact that the bulk of the industry produces commodities and not products and the UK has developed the yields you see because this is what it has focused on. Marketing may only go as far as making sure it meets the quality standards required. One can argue that farmers have been slow in working cooperatively and selling together (the UK farmers are more independent than their UK counterparts). For a while some products had marketing boards controlling them and at least from a perspecitve of milk one could argue that this did bring a stability that the extreme current market imbalance does not.
The idea that the UK could abandon subsidies and then look to intensify land use (meaning I assume higher-value more intensive crops) falls down simply because it invariably means more labour. The UK is very short of labour willing to work in low-wage agricultural conditions. Bringing in more migrant workers is not going to happen because of the politics. Hence, which way do you go when you cannot pay the going rate to attract resources, in this case labour.
The whole technology development in the UK has been underpinned by the stability created by post-War agricultural policy. I think you will find that most farmers in the UK will continue with the same systems and look to tailor them to the pressures they face from farming in an urban environment (that is what England now is). The reasons that the industry will survive is due to the legacy left by the technology build-up that was facilitated by the support systems. The last ten years has been hard because prices have been allowed to follow World prices and survival happened because of the support payments. Trying to claim that the new generation can go forward without them whilst also denying that they have at their disposal a legacy of technolgy that simply would not be there but for the UK/EU support policies is simply denying the reality. Having been in the UK agri-education system 15 years ago I am not sure UK agriculture is now populated by a new breed of super managers! I suspect for one thing that if they had to manage their grandfather's farm of 50 years ago the labour organisation and the lack of instant communications would give them a few problems.
As to your first question. Yes there is slack in the system out here that management and technology and capital can utilise. It is not, however, going to be an instant turning on of the tap, the difficulties are too great. Romania is the country I know best and it could probably feed 20% of the EU's total population alone. Not bad for a country of 20 million and falling. It is, however, massively dilapidated (probably as bad as seen elsewhere in the 20s and 30s, worse in places). There are massive structural problems in the industry because a total collapse does not just happen with farms but it happens with everything. The technology is 1960s but we do have the ability to import western European technology. Romania chose a disasterous land privatisation system in the 1990s and that has put the land holding structure back into the Medieval era. That fact alone will stop the country expanding rapidly. We are working around the issue but the fact is that have to very self-reliant and we do have little of what is taken for granted in the UK, roads, potable water, educated labour, trained farm management, a reliable seed/machinery supplier, a grain merchant, a bank......
I suspect that people reading some of my posts think I am very pro-subsidy. For Romania joing the CAP is a disaster and they should have been allowed to opt out. Here they are just extending the pain. I have always argued that capital grants were needed and not subsidies. The problem is that they are trying both but they have made such a mess of the grant side that no normal farmer can acces them. They should have looked at the post-1945 grants in western Europe for a system that could have worked in this environment, not a massively over-complicated system that was derived from 1990s business school thinking. This failure will slow regeneration further (between the wars it was a major grain exporter). Hence, I do not think you need to worry that this part of the World will depress prices with its production capability. At best it may buy the World enough time to come to terms with the reality of resource per capita decline and expanding population. As an Austrian here said to me recently to get Romania moving is going to take nothing less that a new Marshal Plan!!!