Industry Eye: A new agricultural revolution is now needed to cope with the ever-increasing world demand for food

Ultimately, though, everything reaches a ceiling. We are reaching the limits of food production capacity for present demands. Water is short, oil is finite. Yet the population keeps growing. We have been eating more than the world has produced for most of the past decade, and the markets are beginning to respond to our foolishness.

We will need to produce 50 per cent more food by 2050 if we are to feed the anticipated population. But how? We need a new agricultural revolution. Food prices must go up and waste (and waist) levels down. Governments must understand that there is little of more importance for political stability than sufficiency of food. Society must invest in research and development, and farmers must be encouraged to invest in top-quality facilities and technology.

Governments want to keep food cheap and agricultural commodity prices down, but that is short-sighted: low profits eventually lead to a draining of the capital base and thus the ability to sustain or improve output. They also weaken farmers' ability to do the things for which they are not paid: to sustain biodiversity, to maintain the beautiful fabric of our countryside on which tourism depends, to preserve woodlands.

But they cannot do these things if they cannot afford to do so. It was Winston Churchill who warned against a political mindset that assumes profits are bad things, to be discouraged. "It is the strong horse that pulls the whole cart," he said – it is the profitable business that delivers the greatest benefit to the public, through the taxes it pays, the employment it creates and the public benefits it delivers.

The last time our government took the food issue seriously was 40 years ago, when grants of 32.5 per cent for farm buildings and 50 per cent for field drainage could be obtained, and the net expense then qualified for 10 per cent capital allowances.

Now those buildings are reaching the end of their lives, drainage systems are becoming dysfunctional and Agricultural Building Allowances have been withdrawn.

Nevertheless, with profits now rising and interest rates at an all-time low, this could be a most opportune time to be investing in agriculture for the next generation.

But action on these matters should not be left to the farmers' initiative alone.

Although this isn't a good time to be asking the Chancellor to help out, the Government should share the load by reintroducing fair tax allowances for investments that will generate taxable profits, and also by a visionary attitude towards appropriate grant support for those items that are unlikely to be economically justifiable on their own but will nevertheless help to increase food output, reduce cost to the consumer and help environmental protection.

This is a time of opportunity, demanding of political imagination as well as appropriate farmer investment.

James Farrell is a partner at Strutt & Parker. Tel: 01423 706770 or email [email protected]