"The biggest reform of Common Agricultural Policy since the Second World War will challenge all farmers," says the East Sussex NFU chairman John Padfield.
"But it will help them reconnect with the marketplace and ensure that all farms meet a basic green standard." This is the New Year message from Mr Padfield, whose family-run livestock enterprise includes a farm butcher's shop at Renhurst Farm, Mark Cross near Crowborough.
Historic reforms of European Union (EU) Common Agricultural Policy will see English farms qualify for a single payment only if they meet certain conditions on environmental care, animal welfare, plant and soil health.
Mr Padfield says: "Farmers will no longer be paid direct production subsidies to produce food - these have encouraged inefficiencies in the past. EU farm support is now 'decoupled' from production and farmers are being supported in their routine care of the countryside. The net result will be that the minority of farms that have not met a good environmental standard in the past will pull their socks up and we will all be producing food according to market demand."
Nevertheless, Mr Padfield warns that 2005 will present a huge challenge to the small to medium-sized family farms, all of whom have faced tricky times owing to falling commodity prices since 1998.
"Many farmers are still struggling with the complexity of the initial paperwork for the new, simplified system and inevitably there will be some losers under the new regime. The paperwork is not easy for the family farm with few employees, little time and a large burden of work where animal husbandry is concerned."
Mr Padfield continues: "It is vital that farmers and growers fully understand the implications of the changes before making long-term decisions. I would urge them to take advantage of the guidance offered by the NFU and other industry bodies."
The problem of how to tackle climate change is an area where British farmers can help, says Mr Padfield. "British farming has the opportunity to play a key role in reducing reliance on fossil fuels as we can grow non-food crops as sources of renewable energy under the new CAP regime. This is an area with great potential – 2005 will be an extremely interesting year for bio-energy with our Government leading on climate change through the G8 summit and with the UK taking the presidency of the EU," he explains.
"We are optimistic that movement towards a renewable transport fuel obligation for biofuels will be implemented after the anticipated UK election in May. The NFU is currently working closely with Government and the relevant civil servants on bio-energy, lobbying for a renewable transport fuel obligation and suggesting that new home developments should be heated by biomass-fired* district heating systems."
In Denmark, more than half of the demand for heating is met by district heating – where farmers or major companies supply heat to their neighbours via straw or wood-chip-fired power plants. These are gradually being replaced with combined heat and power (CHP) plants that produce both heat and electricity, with electricity being fed into the grid and/or supplying a whole neighbourhood. CHP plants can be powered by fossil fuels (coal, oil, liquid petroleum gas) or from renewable energy in the form of biomass or liquid biofuels.
Renewed interest among consumers in the origins of their food has helped boost niche markets for local food and speciality produce, says Mr Padfield. "The Food Group, A Taste of Sussex, is working hard to put local food on the map, engaging both consumers, caterers and retailers within Sussex. The future for many small farmers will lie in producing added value products for discerning consumers who are choosy about what they eat."
"Vital facilities such as local abattoirs and Hailsham livestock market will be key to the survival of many Sussex livestock farmers during these changing times."
He adds: "And, if there is to be a National Park for the South Downs, then farmers and growers must be adequately represented on the Park authority, as they care for more than three quarters of land in the proposed Park."
