Upland areas are hugely inspirational places with a unique and high quality environment the National Trust wishes to conserve and enhance.

Uplands give huge benefits to the public. They provide access for recreation, enjoyment and spiritual refreshment, conservation of important habitats and wildlife, some of our finest landscapes, clean drinking water, and an ability to help control flooding.

Around 60 per cent of the 250,000 hectares in our care lie in the uplands, so we have a particular interest in hill farms and their ability to deliver the public benefits we want to achieve through land management.

We are increasingly concerned that many of our upland farms will be unprofitable in the future and if they can not afford to continue farming we will lose much of our ability to manage the land.

Our paper 'Impact of Common Agriculture Policy (CAP) Reform on the English Uplands' outlines the threats to upland farming and our proposals for the future.

Impact of Common Agriculture Policy (CAP) Reform on the English Uplands

Upland areas are often economically vulnerable. They can feel the scale and pace of rural change more severely than other areas. In particular many upland farm businesses are beginning to feel the impacts of economic change and policy reform more than many other businesses.

This raises a number of concerns around the future of land management in the uplands and the ability to sustain farming systems that maintain and improve the environment.

The threat

Environmentally sensitive methods of cattle and sheep farming are essential to maintain the landscapes and wildlife that we treasure in the uplands.

There is now a real threat of farmers not keeping cattle and sheep because they cannot make a viable living from farming. This may lead to chaotic and unplanned loss of land management capability with potentially severe and widespread consequences.

It would be far better to manage future change by maintaining appropriate livestock systems in the short term, which will maintain the environment we want rather than incur the costs of having to reintroduce them at a later date.

This threat to the high quality environment in the uplands could also have huge potential knock on impacts on the tourism industry and on the skills base for farming and land management within many upland areas.

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The evidence

This threat has been revealed by new National Trust research into the economic prospects for 60 of our upland tenanted farms in the Lake District, Yorkshire Dales and Moors, the Peak District and Northumberland.

Our analysis shows that, unless there is radical change in farming in the uplands, by 2012 most farms will be making a loss. In the worst cases this shows farms with a negative net farm income (a loss) of more than £10,000.

The net farm income in the Lake District differs depending on the type of land that is farmed and whether that includes large areas of fell/moorland or not.

Generally those with large areas of fell land are not as badly hit as those with smaller land areas as they will receive larger area payments in the future through the CAP.

These changes are already upon us. The retirement of a farmer in the Lake District for example, led us to carry out analysis which demonstrated there was no viable economic future for the farm.

As a consequence the land will be split between the neighbouring farms and the house will be let separately. The loss of farm units such as this is an increasingly common occurrence and raises a number of concerns over how land will be managed to optimise public benefits in the future.

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Why is this happening?

‘Decoupling’ of support payments from agricultural production under the CAP reforms introduced in January will expose the fact that many livestock enterprises are simply not profitable and most will make significant losses.

As farmers will no longer have to keep livestock to claim the new CAP ‘single payment’ there will be no clear incentive to actively manage the land.

This means that such systems will have no prospect of covering the costs of individual farms, let alone giving a profit for the farmer. In the worst cases they will be a direct drain on farm business income. The impact of this is that many farmers will quickly realise they cannot afford to continue to keep grazing livestock.

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What we want

The CAP reforms introduced in 2005 will bring significant environmental benefits in the uplands. The past subsidy system has encouraged overgrazing that has caused environmental damage.

Whilst we welcome the reforms, we are concerned that without further changes they may drive some farmers the other way, with the result that important areas of our uplands are no longer grazed.

Finding a balance of farming that maintains and improves the environment and the public benefits it provides is our aim.

This requires a managed process of transition rather than the faster and unplanned change which is in prospect.

We are sharing our research with the Government and other interested bodies to highlight our concerns about the future of land management in the uplands and seek common solutions. We are asking that:

• The Government should produce a vision and clear strategy for the future of the uplands. We want them to show clear direction and leadership for the future of the countryside beyond agriculture.

• Further reform of the CAP is required so that public money is invested directly in delivering benefits the public wants and needs, such as environmental schemes.

• The current system of CAP payments in England is reviewed to address the significant difficulties that arise from lowland areas receiving more money than upland areas.

• The Government should develop the Hill Farm Allowance* so it can be used in a more flexible way to underpin those upland businesses that are already delivering environmental schemes and public goods. The total budget should be increased to around £50 million (from the current £27 million).

• The Government should invest in the transition from production based agriculture to environmentally sensitive land management over the next 5-10 years.  In order to do this we need to facilitate cultural change in the industry by providing an advice service for farmers that will help develop their businesses and skills and also help those who wish to retire or leave the industry.

• Change and restructuring of the farming sector is required over the next 10 years. We cannot escape change and need to work together to manage it and realise the opportunities it brings. We have an important role to play in this as a major landlord and farmer.

* The Hill Farm Allowance is a compensatory payment currently made to beef and sheep farmers in upland areas, in recognition of the difficulties that farmers face in these regions and the vital role they play in maintaining the landscape and rural communities of the hills.