Many farmers in the region are turning their backs on traditional farming following a decade of crises in the industry, from foot-and-mouth to BSE. Deputy Business Editor Julia Breen reports.

THE Cheesmond family had not left their Ferryhill, County Durham, farm in six months. Their herd of organic dairy cows was hungry because it had grazed most of the good grass and had taken to licking the windows of the farmhouse in desperation for food.

Shopping was delivered to the end of the farm track by concerned family, and Ned and Val Cheesmond could only talk to their grandchildren from the other side of a fence, fearing their cows would contract the dreaded foot-and-mouth disease that was sweeping the country.

"It was hell," said Mrs Cheesmond. "It was so stressful that I got a headache that just didn't go away and I ended up in hospital with it."

The couple moved to the farm in 1975 and set up a dairy herd.

But by the 1990s, milk prices had fallen and the family decided they could earn more per litre by going organic.

The process of converting to an organic dairy farm took two years, but in the meantime, even the price of organic milk had plummeted. And then foot-and-mouth arrived. Thanks largely to the Cheesmonds' efforts, even when a neighbouring farm became infected, their herd remained clear.

But they received no compensation, and when they came to sell the undernourished herd, their value had fallen.

"We were totally isolated for all that time," said Mrs Cheesmond.

"And when my grandchildren used to come to the end of the road they cried when they left, and I was crying because I couldn't go and see them properly.

"My daughter was at Barnard Castle school and she didn't come home for six months because of the outbreak.

"I can't tell you how appalling it was. It was the final straw for my son and he moved to Canada, and we sold the herd to pay for him to go.

"Once he had gone, I said to my daughters that we were going to have to sell the farm, and they were so upset because it was their home.

"Jill had been doing beauty therapy for eight years and Dawn did it in her spare time so we thought, why not set something up on the farm.

"We wouldn't have been able to do it without a grant we got from Defra, and now we have a wonderful business here."

The Day Spa, at High Hill House Farm, is now a thriving business and is housed in a converted and extended building on the farm.

It was made possible by a grant from the Department for Food and Rural Affairs (Defra), which has money available for farmers looking to diversify.

Figures last year showed that more than 7,000 farmers in the North-East and Yorkshire were diversifying into non-food businesses such as horse-riding, farm shops and tourism.

The Defra figures showed that more farmers than ever were turning to new pastures to supplement their income.

More than half of full-time farmers had branched out, into either completely new businesses or businesses running alongside their farming activities.

Ken Haynes, development advisor for the Rural Development Service North-East, said: "Various things have been brought to bear on the farming industry and there is a need now to ensure long-term sustainability.

"Generally the industry has been changing over a number of years.

"We are interested in helping the rural community generally, but we have seen a lot of bed and breakfasts and farm shops in recent years.

"We will give out grants for innovative projects which will safeguard or create jobs, be economically viable, and provide a benefit for the community as a whole.

"For many farmers, crises such as BSE, foot-and-mouth disease, and even the bad weather we have had this summer which has caused a loss of crops, make them think: 'Is there another option?'.

"While many want to remain in farming, they try to find an extra income to enable them to do this."

But James Eade, farming advisor for the National Farmers' Union North-East, said the Government's encouragement for farmers to diversify was a good thing, but often farmers encountered difficulties in other areas of government.

"The farmers go through a big assessment process at Defra in terms of what is acceptable and what isn't, before they get any grants," he said.

"We have seen some great success stories, but there is this issue of not having joined-up government.

"Defra might be happy to give a grant to a farmer who has a great idea and showed real initiative, but then he will often fall foul of planning restrictions if he needs to convert a barn or outbuildings."

Mr Eade said that many farmers were taking second jobs to supplement their farming income - one North Yorkshire farmer is a postman in the morning and works on his farm in the afternoon.

Other arable farmers drive lorries in the quiet season to earn extra money.

Mr Eade said: "Defra says it wants innovative ideas, but farmers are good at farming and not all of them can think of amazing business ideas.

"Getting a grant is a difficult process - it isn't something that any Tom, Dick or Harry could do.

"I am particularly upbeat about the farming industry over the next five years.

"Yes, there have been changes like in any other industry, but things are looking up."

Mr Eade said the EU's decision to change the subsidy system would allow farmers to farm for profit, rather than subsidy, and allow a greater flexibility for them.

Subsidies will be awarded on an environmental basis, rather than on how many animals farmers have.

He said: "I think profits will improve. Even in the supermarkets, we are seeing consumers making their choices on a lot more than just price.

"People want locally-produced food more and more - and that is reflected in Asda choosing to sell regional food in its Yorkshire stores."

Biofuels is another emerging sector. It has been estimated that in the future, 20 per cent of the arable areas of the UK could be growing products for use in renewable fuels.

With crude oil prices hitting record highs, demand for rape seed oil, which is mixed with oil to produce biofuel, is expected to rise dramatically.

Mr Eade said: "Obviously, things are much better in the industry now than they were during foot-and-mouth. In a funny way, the foot-and-mouth crisis made everyone sit up and take stock of what they have.

"Although diversifying into other areas is still important, the renaissance in the farming industry and the fact that farmers will soon be getting off this EU subsidy treadmill, means that things are looking up. Diversifying can mean just changing to another area of agriculture, and I think we will see more of this."

He urged farmers who were considering applying for Defra grants to diversfy to act quickly, because they will be under review in two years' time.