THE food and farming industry in Britain today is unsustainable. Taxpayers are handing over huge subsidies for a policy which is destroying economic value. Consumers are paying more for their food than they should be, the environment is being degraded and farming incomes are on the floor.

Tough words from the Policy Commission on the Future of Farming and Food, chaired by Sir Donald Curry, which released its report on the state of UK farming yesterday.

We all knew farming, post foot and mouth, was in a mess. What becomes clear from reading the Curry report is that the industry's problems go far deeper than the short-term crisis sparked by what was admittedly a devastating disease.

The entire structure of the farming industry needs to be reformed, says the report. What is called for is nothing short of a revolution.

There are several planks to the blueprint for change proposed. Firstly, Curry says, it is vital to make the industry profitable again. Foot and mouth may be over, but farming is still in crisis. "Farming incomes rose last year but they are still near rock bottom and the trend is downwards."

But the way to ensure profitability is not through EU subsidies. They are part of the problem, not the cure, the report says. It proposes progressively doing away with subsidies and introducing measures to increase the efficiency of the industry instead. These include encouraging more co-operation among smaller farmers; developing the Red Tractor farm assurance system, which recognises the quality of British-produced food; and urging farmers and farmers' co-operatives to take on more processing, packaging and marketing to cut out the middle-men.

Regional strategies should be developed to promote local produce for local markets and pressure should be put on supermarkets to end their centralised systems of food distribution, which can see food travelling from one end of the country to the other and back before reaching our plates.

It also calls for a new view of farmers: as not just food producers, but also custodians of the countryside. EU price supports and production subsidies must be dismantled as quickly as possible and instead of farmers being paid to produce surpluses, public money should be progressively channelled into rural development to help farmers farm in a more environmentally-friendly way that reduces pollution from pesticides and fertilisers.

There should be greater support for farmers who wish to diversify - including clearer guidance for local planners, who have often acted as a block to farmers' attempts to diversify.

Other recommendations include streamlining funding to help hill farmers; greater access to farms, for example for schoolchildren; the setting up of 'demonstration farms'; measures to help tenant farmers; and better monitoring of research into GM crops.

This blueprint for sweeping reform has met a mixed welcome from the farming lobby. National Farmers Union president Ben Gill, who farms near Easingwold, has already warned that one of the report's key recommendations - diverting EU cash subsidies to fund rural development and environmental benefits - will hit farmers hard.

"It equates to taking away cash that farmers simply do not have," he says.

But he welcomes many other aspects of the report - including boosting the Red Tractor logo, reviewing the supermarket code of practice, better checks on imported food, and measures to help tenant farmers.

East Yorkshire pig farmer Grant Burton, an NFU council member for the East Riding and Evening Press columnist, shares Mr Gill's concerns about aspects of the report - especially the slashing of subsidies.

He says European Common Agricultural subsidies are an easy target - but it's not true they turn farmers into fat cats. "If you inspect the individual farmers' bank sheets, you will see they are not making significant profits," he says. It's all very well saying subsidy cash will be diverted to environmental schemes and rural development, he adds - but not all that cash will go to farmers.

But he welcomes other aspects of the report. Farmers' co-operatives would give small farmers much greater clout when dealing with supermarkets, which cream off most profit in the food industry, he says - and would also help them guarantee a regular supply of produce, so making it easier for them to win contracts. He is also keen on the report's recommendations on promoting local and regional produce for local markets.

He says it is not uncommon for meat produced in Newcastle to be sent to Cornwall for slaughter then shipped back for distribution, because of supermarkets' reliance on a few slaughterhouses - a situation he describes as 'scandalous'. Anything that supports supply of local food to local markets has to be good.

The key aspect of the Curry report for farmers such as Grant Burton and Ben Gill, is how far the Government will go in implementing the proposals.

Prime Minister Tony Blair said yesterday that he and his Secretary of State for the Environment, Food and Rural Affairs, Margaret Beckett, are "fully committed to delivering on this challenge". But Mr Gill says actions, not words, count. "Too many reports are gathering dust," he says, "we must now deliver."

Updated: 10:36 Wednesday, January 30, 2002