A radical shake-up of farming in Britain has been proposed in a government-sponsored blueprint.

The Future of Farming report calls on a culture shift in agriculture - with farmers to be rewarded for the quality, rather than the quantity, of food that they produce.

Chaired by former chairman of the Meat and Livestock Commission, Sir Donald Curry, the report was commissioned by the government in the aftermath of the foot and mouth outbreak.

He said that 2001 had been a "terrible year for farming" adding that the disaster of foot and mouth was only one in a series of blows to hit the industry and the rural economy.

"Radical measures are needed to cut through this deeper malaise," he said. "Tinkering at the edges will not turn the industry around."

The report, dubbed a "watershed" by ministers, calls for a shift from production subsidies towards environmental programmes.

It says that agriculture subsidies should be redirected from producing crops to protecting the countryside and argues that farmers should have to obtain licences before qualifying for subsidies.

Drawing a line under years of producing the maximum amount of food at minimum cost, the report says that farmers must become "custodians of the countryside".

Consumer Rights

The blueprint also argues that the government and consumer groups should encourage supermarkets to sell more locally-produced food in order to halt the rise of "factory farming".

Consumers should know where their food comes from, according to the report.

The report paints a potentially bleak picture for farmers - suggesting that the current system of subsidies could be phased out over the next decade.

Calls for reform of the European Common Agricultural Policy have continued.

The report finds that farmers earned an average £5200 in the year to February 2001 - despite subsidies costing the taxpayer an estimated extra two pence on income tax.

Other recommendations include the development of a red tractor logo, reviews of the Agricultural Wages Board and the supermarket code of practice and better regulation of imported food.

It also proposes a system of audits on the amount of "red tape" faced by farmers.

Welcomed

Welcoming the report, prime minister Tony Blair said: "As the commission note, the current situation benefits no-one: farmers, taxpayers, consumers, or the environment. Farmers struggling with the lowest incomes for decades don't need me to tell them that.

"The commission's vision for a future of sustainable food and farming industries is one that many will find attractive. But, as ever, the challenge is in getting there. We want to work with farmers and other stakeholders to build on a consensus for change."

Environment, food and rural affairs secretary, Margaret Beckett, welcomed the report, describing it as "a sound base" for reform of the industry.

"A sustainable and profitable future for our farming and food industries is of major importance for the government. The report is clear that its recommendations are not just for government, which is why I want to work closely with farmers and stakeholders to turn our vision into a reality," she said.

However, the secretary of state denied suggestions that the report could have negative implications for the new structure of her department.

"To be perfectly frank...the implications for the department if we don't succeed really are the least of my worries. It's the implications for society as a whole, for the farming community and for the wider rural community, if we are not able," she said.

Unrealistic

Speaking to ePolitix, the shadow environment secretary, Peter Ainsworth, described the report as "a compendium of different ideas that have difficulty holding together".

He claimed that the timetable for the commission's inquiry was "wholly unrealistic".

"The recommendations on switching through modulation subsidies on food to environment are problematic, the problem being that under current CAP rules, we could all end up paying more on tax and farmers could be worse off," he said.

"Until there is radical restructuring of CAP, longer term solutions will be very hard to achieve."

The National Farmers Union welcomed the findings, but criticised the lack of recommendations regarding growing crops for energy purposes.

It also criticised the calls to reduce farmers' subsidies by 10 per cent from 2004 to divert the funds into rural development and environmental research.

NFU president Ben Gill warned that while farmers supported spending on environmental measures, the government would be "taking away cash that farmers simply do not have".

"I must stress that we are not opposed to rural development and environmental spending - quite the reverse. But we have always been against this way of paying for it and today's report has not changed our minds," he said.

"A lot of the report's ideas are developments of existing work on issues like farm diversification, farmer collaboration, better training and marketing. Too many reports are now gathering dust. We must now deliver - industry, stakeholders and government - to produce a sustainable strategy for agriculture based on action."