What the future holds

Clearly, in the first instance, to produce food. During the last 50 years, farmers have been spectacularly successful at increasing food production.

They have intensified the use of non-farm resources, such as pesticides, fertilizers and machinery, to produce much more from the same amount of land - three times the amount of wheat, barley and other grains, potatoes and sugar beet from the same area of land, while milk yields per cow have more than doubled. Over the same period, the number of farms has halved to 200,000, and the labour required to produce this food has fallen dramatically.

The price we pay for any item of food, however, does not tell the full story of the costs involved in its production. Unlike other economic sectors, agriculture is inherently multi-functional. It does more than just produce food, fibre and oil. It has a profound impact on many other aspects of local, national and global economies and ecosystems.

These side-effects can be either negative or positive; but the negative costs are not reflected in the prices paid by producers or consumers. 'Externalities' of this kind distort the market by encouraging activities that are costly to society even if the private benefits are substantial.

A heavy lorry that damages a bridge, or pollutes the atmosphere, externalises some of its costs - and others pay for them. Similarly, the use of a pesticide imposes costs on others if it leaks away from fields to contaminate drinking water, or builds up as a dangerous residue in foods.

The real costs of industrialised farming are severe. Modern agriculture has caused significant pollution from pesticide, nitrate, soil and bacterial losses. This costs £250m a year to remove from drinking water, paid for by water consumers, not by the polluters. So the farming sector in effect receives a subsidy for its polluting behaviour.

Modern farming has brought a severe loss of rural biodiversity, from the removal of hedgerows, monocultural rotations and use of pesticides and herbicides. We have the food, but no longer the skylarks or poppies or corncrakes. And industrialised farming has harmed human health through BSE, pathogens and antibiotic overuse. The total costs are of the order of £1-1.5 billion each year.

Yet there is another side to the story. Agriculture produces much more than just food. And it is the positive side-effects of farming that offer a new way forward. More sustainable farming is very good at producing public goods: things we can all enjoy and that contribute to the economy.

Farming produces attractive landscapes we want to visit. Each year, day visitors and tourists spend 551m visitor days in the countryside, spending more than £14 billion per year - more than four times as much as formal subsidies from Government to farmers, and more than gross farm income. Farming can also absorb carbon in soils and trees, to provide new carbon sinks, helping to mitigate climate change. It can hold water in wetlands to provide flood control. It can nurture the farmland birds we all feel are part of our heritage. It contributes to rural jobs. Many of these may end up being significant new sources of money for farmers.

This is the future for farming - as a multi-functional sector, building natural and social assets in the countryside, while providing us with wholesome food sourced from farms we trust. Each on their own may not represent fundamental change, but together into an integrated set of options for farmers, and they offer opportunities for all farmers.

The primary goal for agricultural and rural policy must be now sustainable agriculture, which minimises the use of inputs that damage the environment or harm human health and which integrates food production processes with regenerative processes, such as nutrient cycling, nitrogen fixation, soil regeneration and natural enemies of pests.

Given agriculture's apparently small contribution to the economy as measured by GDP, can it play a positive role in rural development?

The dominant pattern of rural development has tried to attract external capital, technologies or institutions into rural areas to kick-start change. But this is an expensive and risky approach. An alternative school of thought focuses on 'endogenous' patterns of development: growing from within. The priority is to look first at what natural, social and human resources are available in rural areas, and then to ask: can anything be done differently to harness the resources more productively, without causing damage to these assets?

This more locally-based approach forces us to look differently at the structure of rural economies. Every time someone buys something sourced from outside the local economy, money leaks out. Each time raw materials are exported, value is added elsewhere, not in the locality. Each time natural resources are depleted or polluted, the local capital base diminishes. But if policies and processes are designed to plug these economic leaks, the renewable asset base can grow while also increasing the flow of desirable goods and services.

There are five principles for plugging the leaks in rural economies. First, use local renewable resources. Second, recycle financial resources by spending locally. Third, add value to primary produce before it is exported from the locality. Fourth, connect up stakeholders to create trust and new linkages. And fifth, build human capital.

Beyond these key principles, there are wider policy issues that the Government will have to get to grips with if it is to pursue a multi-functional, sustainable future for agriculture and rural economies. In particular, should farmers receive public support for the multiple public benefits they produce above and beyond food - the so-called provider gets principle? Should those who pollute have to pay the cost?

These are important questions for the future of farming, the countryside and the rural economy.

This article was written by Jules Pretty, who is Professor of Environment and Society at the University of Essex, and author of Agri-Culture: Reconnecting People, Land and Nature (2002), The Living Land (1998) and Regenerating Agriculture (1995).

Updated: 11:29 Wednesday, September 11, 2002