Countryside in crisis: The farmer of the future

WANTED: Computer-literate graduate, MBA preferred. Must have packaging, marketing and tourism skills

He's young and entrepreneurial. His turnover has reached half a million pounds. And it could be even more if a lucrative deal with a large chain of supermarkets works out. He's about to publish a book, Collaborative Marketing - Building Business Advantage, aimed at other businessmen in his field. He's got a degree in marketing and is more aware of USP than BSE. "It's about marketing edge," he enthuses to colleagues. "To create something that the supplier and the customer really want."

Meet John Smith, a typical farmer in the 21st century. His father used to be in the same line of work, but sold up when the industry collapsed at the end of the last millennium. He can barely understand what his son is talking about, let alone recognise the business that he handed on to him in 1999, when prices collapsed, millions of animals were worthless, and the strength of the pound meant British farmers couldn't export or compete against cheap imported produce.

Welcome to the future of farming, or "land marketing" as it will be called in 2010 - an industry few of us will recognise, least of all by name. "Land marketing" will be a substantially smaller industry; the steady decline of farmers will accelerate in the next century. Of the hundreds of livestock farms that go under, some will be bought out by wealthier neighbours, others will be turned into B&Bs or the land will be contracted out to other farmers. Farming will fall into the hands of a wealthy elite.

The areas surrounding traditional farms will change beyond recognition, too. They will be far poorer for a start. The economic divisions between town and countryside will deepen; people in rural areas will rely on the spending power of out-of-town yuppies with country retreats, although they will despise them more than ever. Bill Hall, head of economic analysis at farming consultancy ADAS, says: "The essential part of the equation is that we can't have so many small English farmers. They just won't have the scale of operation to compete with the large north American grain producers."

Consequently, the shape of the countryside will change dramatically. Holdings like John Smith's will be vast and intensively farmed, dominating parts of the countryside with ugly, modern outbuildings. Nearby there will be tracts of derelict land and crumbling farmhouses - the ones John Smith didn't buy up because he couldn't justify them on the balance sheet.

One-fifth of the UK's population live in rural areas and their economy responds to the state of local agriculture. Village shops, local transport, machine producers will all feel the effects of a shrinking market; this summer alone, tractor sales were 41 per cent lower than last year and combine-harvester sales fell by 30 per cent. Over the past decade, 1,102 village shops closed, as did 474 post offices and 145 banks or building societies. In 20 years' time these figures will have doubled and villages will experience the fall-out of another generation of unemployment among the farming community. While many rural workers will move to the towns, inner-city problems will plague those villages that are left intact: drugs, crime and unemployment will proliferate.

In terms of economic hardship, our farming communities will resemble the nation's pit villages of the late 1980s. Many of them may be abandoned altogether, like the deserted 19th-century weaving villages that can still be seen in parts of the Pennines.

This is the likely scenario given the current crisis in the farming industry; in the past three years, farmers' incomes have dropped by 75 per cent to their lowest level since the 1930s. The difference is, in the 1930s all industries were in desperate straits. This is one recession the farmers are facing alone, owing to a number of factors beyond their control. Chiefly, the strength of the pound has strangled opportunities to export. Stephen Rossides, head of livestock at the National Farmers' Union (NFU), explains: "Exports are too dear and we're importing cheaply; we're sucking in tons of poultry from Brazil and Thailand. We've also got an over-supply problem. We've got a flood of animals in the busiest calving period in the year." Farmers say they can no longer afford to keep the excess number of animals - thus the very public gesture of those farmers who abandoned their calves last week. There are global factors as well; the collapse of the Asian and Russian markets has been disastrous for pig producers.

All this is taking a psychological toll. Suicide rates among farmers are rising and the Rural Stress Network has opened 29 national helplines with new ones in Oxfordshire, Surrey, Hampshire and Northumberland. Mr Rossides says: "We're talking about human beings who are in real psychological distress. What we're seeing now is symptomatic of freefall panic."

Les Armstrong, a hill farmer in Cumbria, is now selling his excess ewes off at pounds 3 each. It takes pounds 50 to fill his car with petrol. "We've hung on and done everything we've been asked to do," he says. "We're only here through the grace of the banks. Politicians talk about diversifying into other areas but this area's so remote there's nothing else I can do. The only option is doing contract work for other farmers."

According to NFU statistics, farmers have diversified into more than 150 non-farming occupations, including landscaping, farm shops and caravan sites. In a relentlessly upbeat press release, the NFU recently gushed: "The breadth of off-farm occupations is astonishing - from haulage and construction to ice-cream making. Necessity has certainly been the mother of invention in many cases."

Part of the problem is that most farmers are unable to look to the future because they cannot see beyond the current crisis. Yet those who really wish to survive will have to take a more long-term view than making clotted cream for tourists. Mr Rossides says that future farmers will shape their businesses to the needs of the modern consumer. They will be involved in every part of the process, from production to packaging, promotion and selling.

Mr Rossides describes an industry more akin to financial services than to farming. Those involved will be younger and computer-literate. They will be au fait with electronic systems for tracking cattle and they will probably have their own websites; part of their business will be selling to local producers and consumers on the internet. The future John Smiths will also work alongside other farmers in co-operatives, a practice that already works well in France. "France still has thousands of small farmers because they work together. It makes them less vulnerable," Mr Rossides says.

It's hard to imagine Les Armstrong and his colleagues following John Smith's example in the next few years. Les says: "I look at my 28-year- old sons sitting here and despair - I can't imagine what they're going to do." Maybe it's too late for him to change dramatically, but his sons will have no choice.

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Free holiday prize goes to Mr A C L Blair, of Downing Street

THIS WEEK's star prize has been won by the Blair family, of Downing Street, London. The Independent on Sunday can reveal that the Blairs - Tony, his wife, Cherie, and their three children, Euan, Nicky and Kathryn - have won a free weekend break on a Yorkshire farm.

The Blairs are fond of the countryside - they recently returned from a holiday in Tuscany and south-west France - and now they have a superb opportunity to savour life on a British farm today. Their host, Mr David Shaw (who tells his story below), will ensure that they experience all that being a farmer entails: rising early to milk his herd of Jersey cows, enjoying breakfast with the farm's own rich milk, maintaining its small crop of wheat and maize, grown as food for the cattle. In the evenings, the Blairs will see how Mr Shaw spends many hours getting to grips with EU red tape and Ministry of Agriculture directives, as well as writing to the bank about the farm. If the Blairs are lucky, they'll be there on a day when one of many bureaucrats comes to inspect the farm.

Mr Shaw is looking forward to showing them one aspect of farm life today: having newborn bull calves shot because he cannot afford to feed them. The Blairs could then watch the calves being fed to the hounds of the local hunt. The Blairs will also meet Robert, David's son, who has done well in his GCSE exams - education, education, education is a Shaw family motto. He won't be joining the family business. He feels it hasn't a future.