Report highlights threat to livestock farming in North

The Country Land and Business Association underlined the warning it gave last week that cattle and sheep could disappear altogether from areas like the Dales.

A Future for Livestock grazing in England and Wales was launched at the Royal Show on Monday, highlighting the important role of cattle and sheep, not only economically but also in maintaining the much-loved landscape and environment.

It gives a stark warning that the countryside could fall apart if livestock disappears or suffers further large reductions.

In recent years, the livestock sector has been hit by BSE and foot-and-mouth, as well as by the strength of sterling and extremes of weather. The diseases, in particular, have created much extra regulation on farms and in the livestock chain, leading to extra costs.

The report highlights the devastating impact these pressures have already had on reducing livestock numbers in England and Wales.

The latest official figures show that between 1990 and 2003:

* the total number of cattle fell from just over 7m to 5.6m, a decrease of 20pc;

* dairy cow numbers dropped from just under 2m to 1.4m, a reduction of more than 28pc;

* sheep numbers fell from almost 20.6m to 15.7m, a decrease of more than 23p;

* farm labour, including many skilled stockmen, declined from 435,781 to 354,400, down almost 19pc;

* beef cows initially rose from 677,545 to 778,820 in 2000, but have since declined steeply to 702,000.

The CLA says the beef sector is expected to contract further, following the decoupling of livestock subsidies, unless there specific measures are included in the revised England Rural Development Plan from 2007.

For the 2002-3 financial year, the net farm income for upland cattle and sheep farms was just £9,500 per holding. For similar lowland farms Defra's own figures put the average even lower, at just £7,000.

In Wales the same trends occurred with total cattle numbers dropping by 5.7pc from 1.3m to 1.2m; dairy cows by more than 12pc to 269,000; beef cows by 4.2pc from 216,000 to 207,000; and farm labour by 11pc to 56,362.

CAP reform, including the switch to the single farm payment, is expected to see further reductions. With payments no longer linked to the number or type of animals, unprofitable animals will not be kept.

The report says the effect will become steadily more apparent from 2005 to 2012, as the payments in England change from an historic to a regional basis. All analyses forecast a large drop in support for many dairy and beef producers, especially those who have higher stocking densities and higher yields.

"The subdivision of England into regions for the purpose of the SFP, with its effect of lower payment rates especially for specialist beef and dairy cattle farms in the uplands, adds to this tendency, although the effect is reduced by the division of the severely disadvantaged area itself into two regions," said the report.

But the area of greatest uncertainty hangs over the dairy sector.

The report highlights a paper on the Defra web site by Professors Colman and Harvey, which concluded that, on the latest data available, 60pc of dairy farmers and 40pc of output failed to cover full costs.

"They went on to show how milk returns are projected to decline, and that, if the dairy premium was distributed on anything other than an historical basis, this would further penalise the lowest cost producers," the report said. "The precarious situation of dairy farming is laid bare in this study by respected independent analysts."

The CLA points out that, in the past, farmers have provided the landscape, biodiversity and heritage out of their own incomes. For many that would no longer be possible.

"The decline in the numbers and types of grazing animals available in many areas is already showing up as an environmental problem," said the report. "Under-grazing or inappropriate grazing is a major issue for many important grazed habitats."

The CLA will present its report to the Government.

Its vision is for a diverse, profitable and dynamic grazing livestock industry producing consistently high quality products, readily identified by the consumer. This would require:

* more encouragement for farmers to deliver environmental benefits;

* a strong infrastructure of vets, merchants and suppliers and an accessible network of abattoirs, livestock markets and cutting and processing facilities, so farmers could develop a wide range of products and markets, and increase added value;

* speciality, regional and local brands with the use of environmental criteria in marketing;

* strengthened demand for foods from grazed systems through increased customer demand for traceability, added value and a higher quality food experience;

* increased business profitability through the implementation of regulation in a way that makes compliance practical for small and medium sized businesses;

* strong external and internal biosecurity controls.