This can be summed up in four sections

Technology,Currency, Subsidies, Conclusion

Let's start the first section with technology. Over the past decade we have seen significant advances in several areas. These can be broken down into three groups.

Chemicals

The killer application here is a chemical called Glyphosate better known by its commercial name "Roundup". It has the ability to kill the vast majority of all plant life in a typical arable rotation. The benefit is that you no longer need to plough to get rid of weeds or volunteer cereals after the harvest. Other new chemistry allow us to suppress weeds which until recently were difficult to control in the growing crop. New fungicides keeping the crops clean for longer have allowed more photosynthesis giving us significant yield advances.

Machinery

 It's just getting bigger and better all of the time. If you have decided, as we have, to stop ploughing and just cultivate the land the productivity increase and cost reductions are significant. One man can  do so much more.  I am reliably told that last season (summer 2001) one Claas Lexion 480 combine harvested over three thousand acres in Suffolk. Efficiency is about putting the largest horsepower machine to work on the optimum amount of land that it can cope with. The boundaries are being rolled back all the time, the reason why we have seen such a decrease in labour on arable farms.

Seeds

 Breeders keep bringing out new varieties that are more productive than there predecessors. This is achieved in several areas, better resistance to disease, better standing power (we do not want crops flat on the ground at harvest time) greater tonnage with better quality characteristics.

The future is genetic modification (GM) assuming this is put in place with the appropriate level of environmental sensitivity and consequential research. The simple fact is that if it can be made to work we will be able to design plants that will no longer need spraying. These plants will be specifically designed to withstand the diseases and predators in the environment in which they are grown. The only sprays required will be roundup (which biodegrades naturally within ten days) to control all weeds growing in the  crop and an herbicide that kills the volunteer crop after harvest. We are talking of an organic utopia. No wonder the Organic lobbies having invested in there so called conversion are so opposed to cheap organic food for all. We are talking vested interests, no moral high ground here. The other major plus of GM is the potential to design crops for the specific purpose of industrial end use such as medicines  plastics and oil.

The benefit other than renew ability of these organic products would be to take significant arable acres away from growing food. The result might be to see slightly more expensive food,  good for this vested interest!

The next section we can dwell on is currency.

Our arable production namely wheat and Oil Seed rape are quoted in dollars on the Chicago market. If the pound is strong against the  dollar we get less pounds per ton of produce.

Our subsidies paid in the form of area payments are paid in euros and converted to pound sterling at the average exchange rate prevailing in the month of June of any given year. In recent years the pound has been strong against the euro, therefore a reduction in our subsidies as received by us in pound sterling. So it is easy to deduce that a strong pound gives agriculture a challenge. Past prosperity in British agriculture was often based around a week exchange rate.

Our final section which is even more controversial by its very nature: subsidies.

In the EU we are paid a support package which is based on the area you crop, currently around £88 per acre. We have to leave ten percent of our land fallow or crop that area on a registered industrial cropping contract. The net result of this form of  subsidy is to drive up rents, particularly for those tenant farmers on the new type of termed agreements under the Farm Business Tenancy legislation. This is good for landlords but not for farmers competing  in a market which is distorted by subsidies and politics on both sides of the Atlantic. Furthermore the government reduces our subsidy income by deducting a levy called modulation for the purpose of spending this tax on environmental schemes. These schemes will be beneficial to Landlords in the long run. To date no other EU government has taken up its modulation rights under the agenda 2000 agreements. At a time when UK farmers are suffering there worse economic downturn since before the Second World War this government has also decided not to take up the right to compensate farmers for the currency distortions, a right that is allowable under agenda 2000. This government recently set up a commission to see how we can have sustainable profitable farming in the UK but does very little to maintain a level playing field  with our EU partners.

Conclusion

Large arable farms will dominate UK agriculture as only the scale of operation will be able to sustain profitability from very tight operating margins. As subsidies  get eroded landlords rental income will decrease. Some of the shortfall will be made up with receipts for environmental projects. In the much longer term GM cropping may restore an element of profitability. By then the industry will probably have been concentrated in to many fewer hands