I THOUGHT this week, for a change, we might have a look at rural property and land values following the successive crises that have hit farming over the past five years since BSE first struck and up to the latest emotive debate on the GM issues.

The ongoing reform of the Common Agricultural Policy is steadily reducing direct support to farmers and this is being exacerbated by a general slump in world food prices.

When you combine the above with our strong pound, then it is little wonder that average farming incomes have fallen by 61pc since 1995 and, what is worse, MAFF forecasts that we shall drop even further in the millennium year.

The incongruity of the situation is that there seems to have been a parallel slight increase in rural land values for the same period. It is an anomalous situation, when an industry undergoes a recession you would expect the price of its factors of production to fall and, in our case, on the surface at least, the reverse has happened. So what are the reasons?

The main factor has been the strength of the residential market, and this has helped to prop up overall farm land prices, even in areas where the value of less-attractive land has been falling. In the latest RICS survey, 68pc of chartered surveyors saw a rise in land values, which had an associated residential appeal during the first quarter of this year; while land with no residential appeal fell in value.

Large scale commercial farms, due to their greater productive potential, seem to have held their value, with genuine farmers looking to expand production and achieve economies.

The introduction of Farm Business Tenancies in 1995 and an expansion of contract farming has revolutionised the tenure market in that land owners can now safely allow others to farm their land knowing that they can get possession of it with certainty at a later date. This has led to more people from non-farming backgrounds entering our industry and joining forces with practical farmers to work their newly-acquired acreage.

This growth in hobby farming has also been accompanied by a rapid increase in diversification, as more farmers look to ways of creating income.

According to a 1999 survey, 53pc of farmers were now considering some form of diversification to boost funds. Many farmers seem to be adapting to change rather than relinquish their property and thus, perhaps, the market has been starved of any large quantities of land until just recently.

A major factor in sustaining land values has been the low interest rates which have enabled farmers to keep servicing their overdrafts.

However, it is worrying that there has always been a clear relationship between trends in land prices and trends in farm incomes and any glut of land coming onto the market may trigger a drop in values which would have wide-ranging implications for the rural economy.

As small farms are swallowed up into larger holdings, there will be rural depopulation and fewer employment opportunities. This shift to large scale commercial production could hit the prospect of rural regeneration and possibly have an adverse impact on the environment.

The question we need to answer is whether all this structural reform that is shaking down through the industry is compatible with the new vision of conservation and rural development promoted by our policy makers in Whitehall.

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The French seem to be having some unexpected soul searching at the moment, with Nicole Fontaine, President of the European Parliament, criticising the French Government for continuing to ban British beef following her visit to a Hampshire farm.

Madame Fontaine, head of the French consumer association, has also cast an eye over our control systems and declared that the ban should definitely be lifted before the end of the year.

"C'est la vie mais un peu extraordinaire!"

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There is starting to emerge an interesting concept of compensation for farmers for costly regulation, and this is being promoted both in Europe and at home.

The EU is flagging up with the World Trade Organisation that its farmers should be entitled to receive compensation or subsidy to reflect the heavy cost of the welfare legislation that is enforced in Europe.

Nearer home, Lord Leon Brittan has confidently stated that it would be against the European Bill of Rights if the UK Government introduced its freedom of access legislation without compensation provisions for any damage done.

Watch this space - the worm may be turning!

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The new British farm tractor logo, whose introduction has been trumpeted by the NFU, is not perceived by some as the saviour of our industry.

Around 450 Farmers For Action turned out in Manchester to symbolically feed a toy farm tractor into a forage harvester in protest because, they say, the label can, under European law, be put on imported food provided it complies with the welfare conditions.

I have written to Ben Gill to find out if this is true.

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There is trouble a-brewing over fallen stock and the total absence of co-ordinated thinking from our Government. They have successfully shackled our knacker yards so that they can't operate, and are now pushing on with their fox hunting ban.

What, I would like to know, is going to happen to all the fallen stock on our farms when in 2003 European legislation makes it illegal for any animals to be buried on farms.

Now there's a thought!

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Some other news in short:

The Beef Intervention price has been cut and will not be triggered off unless we fall below 80pc of the prescribed level.

For the first time since November 1997, the average pig prices have been above 100p/kilo deadweight.

The first advanced Ewe Premium payments will be made in the next month and amount to £3.35 per ewe (plus £3.74 for LFA Supplement).

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Many of you will have heard that Malton Rugby Club is trying to raise money towards the John Machin Award, which is to be set up in memory of that great rural character from Brandsby whose interests and fame were widespread. The award will sponsor a young man from the club to go to the Southern Hemisphere each year for tuition and experience.

Philip Place reminds me that one of John's passions was steam engines; and his Fowler Showman's engine will be going to the Pickering Rally over the weekend of August 5 so, if you are in the area, please call and have a look and pop a pound in the bucket.

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Despite it being Yorkshire Show week, there was a reasonable offering of 228 cattle in Malton on Tuesday and those that took the trouble to come were rewarded with an excellent trade.

Even the 97 bulls were in stronger demand, with continentals averaging around 96-97p/kg up to a top of 115p achieved by Alice Thompson.

Clean cattle were pretty fiery, with an overall average of 99p for the steers and 95p for the heifers.

Amongst the bullocks, G D Warters had the top price of 115p, and he was followed closely by Miss Gibson with a heavyweight steer at 113p/kg.

The retail butcher heifers stole the show, with Mark Bulmer making 124p, followed by Michael Douglas at 122p/kg.

There was only a small show of 550 sheep but this lifted the trade to around 90p/kg which is most encouraging. The best lambs from Tom Midgley made 97.5p/kg.

In the pig section there were only 146 and trade averaged around 73p up to a top of 80p for a smart pen of gilts from H W Ward.