Sustainability and stewardship are not new objectives in farming; they are thoroughly traditional objectives, and well tried and tested in the process. We can still attain them today, but only if they are made absolutely central to farming policy. Bolt-on extras, whether for greenery, food quality or other social responsibilities simply won't work.

Are you absolutely sure that you know what you have done in electing me as your President, because I can only presume that you have a taste in the Council for living dangerously. Like the College of General Practitioners, who have joined the Dangerous Sports Clubs by electing me as their President.

As advancing decrepitude overtakes me, I cannot remember which organisation elected me. It is worse when, having asked someone a question, they merely reply that my father asked them the same question too. The final straw was when someone actually said that my great grandfather had asked them the same question.

I'm not sure that I can remember a time when one section or another of the farming community was not experiencing financial problems. There has tended to be a natural cycle of good and bad times, just as we experience good and bad growing seasons - and farmers, being phlegmatic sorts of people, learn to take both in their stride. Today, I think everyone in this audience knows that things are very different. All sections of the farming community are in serious economic difficulty, and there is no immediate prospect of things getting any better.

Last year, farm debt reached £7 billion and 6,000 British farmers stopped farming. Those who carried on were forecast to earn, overall, real incomes only fractionally over half the average level achieved between 1979 and 1984. To this catalogue of gloom we now have to add the uncertainty created by the volatile state of the GATT negotiations, a massive CAP budget over-run, and ideas which would place an unreasonable burden on British farmers.

There is, of course, a terrible irony in much of the current situation because the majority of the problems are due to farmers' success in responding to Government and EC policies and pricing signals over the last 40 years. There is no doubt that the whole situation has become incredibly complicated, and some of the issues now are far removed from real farming. Farmers have ensured that the people of Europe are well-fed. Now they are successful they are being blamed for the surpluses - and I have to say I both understand and share the general feeling of injustice which is in the air at the moment.

As if an economic crisis was not enough, I believe we also have to face up to the fact that there is a separate crisis - a cultural crisis - facing us. It concerns the very identity of farming itself, and it has arisen largely because we have not made clear our dual role of providing food and looking after the countryside. This may seem an obvious point to those of us here today, but I fear it is not fully understood in the country at large and perhaps we haven't paid enough attention to that dual role ourselves in recent years. The vast majority of the population now live in towns and cities, and even many of those who live in the country follow what can only be described as urban lifestyles. Many people are now four or more generations removed from anyone who actually worked on the land - and it shows in their attitudes. They don't know what farming is or does: and they are increasingly suspicious of it.

I believe this cultural crisis has been exacerbated by the fashionable concept that farming is 'just another business'. I don't know where this idea started, but I have to say that I think it is both wrong-headed and thoroughly unhelpful. Farming is not like any other business. It is, or should be, a rather special way of life, and I believe most farmers recognise this, even if they don't always recognise the benefits of not have to commute, being one's own boss and having room to breathe.

That is not to say that it should not bring proper financial rewards and security, but what makes farming different is the element of long-term stewardship of a precious natural resource - and I don't think there is anything soft, romantic or otherwise unrealistic about such an interpretation. Farmers are at the very heart of rural life and without them we wouldn't have a countryside - at least not as we know it today. In this regard it may just be worth indicating what stewardship means to me. In my estimation a steward is someone who cares for, or manages, the property or estate of someone else and who has to account for the condition of that property at the end of the day either to the owner or to God.

It seems to me that any long-lasting solution to farming's problems will have to address both the economic and cultural issues. We need to get away from a sterile debate in which farmers accuse environmentalists (which in this context seems to me to include just about everyone who is not a farmer) of nostalgic hankering after the past, while environmentalists accuse farmers of a technocratic obsession with profit at all costs.

This is certainly not a helpful exchange of views. It would be much more constructive to acknowledge that there can be no going back technologically, and actually take pride in the advances made possible by modern science, but in the same breath confess that technology doesn't have all the answers and that we need to retrieve some of the wisdom of the past, both in terms of values and husbandry skills. Happily, there are increasing signs that environmentalists and farmers are seeing that the future lies in cooperation not confrontation.

It seems to me that some kind of consensus (I hardly dare use that word!) along these lines may be starting to emerge. If so, it is a timely development, because we are clearly at a watershed period for British agriculture. When historians look back on the last 40 years, I believe they will see them as an aberration; a time when guaranteed output-related subsidies came to dominate agricultural decision making in a way which they had never done before, and are unlikely to do again.

There are some important similarities between today's situation and the events that led to the 1947 Agriculture Act - though no doubt there are some important differences too. Then, consensus was achieved on the need to invest in our farming industry to deliver what society needed - large quantities of relatively cheap, high quality food. Although today's debate is infinitely more complex, I believe a similar kind of consensus is emerging today - this time for a farming enterprise which is economically viable, responsive to the needs of consumers, socially acceptable, environmentally friendly and moving towards genuine sustainability.

The essence of this consensus should be policies which enable our farmers to look after the land and produce the food that we need. We cannot allow any significant part of the 80 per cent of Britain which is now farmed to be lost permanently to agriculture, and farming must be sufficiently rewarding to allow our farmers to continue to care for it.

Whether or not this emerging consensus can be turned into action is a matter for conjecture. But it is clear to me that it will certainly not happen without positive, decisive leadership and encouragement. It does seem that we may at last be getting away from the attitude that there isn't much wrong that a few financial tweaks and green twiddles can't put right, and towards a recognition that much more wholesale reform is necessary, but there is still a long way to go.

Any attempt to balance the two key issues of economic viability and environmental friendliness must start with the recognition that the countryside needs its own thriving economy, responsive to consumer needs. Neglect of this basic marketing principle has brought the Common Agricultural Policy into disrepute in this country and around the world.

The guaranteed payments of the last 20 years have led to farmers being too remote from continental counterparts, due to our different inheritance systems. This is a very important fact to remember. This may seem to be an advantage, but one of the consequences is that historically the smaller continental farms have required much more sharing between themselves, even of production resources, and this has produced a much more cooperative mentality which now gives them real strength in their marketing.

One of the aims of the CAP was to create a level playing field, which is a key component of any genuinely free market, within Europe. Sadly, however, it failed - as it has done in so many important ways. But we must be sure we don't dig up what is left of the playing field in trying to level it. I therefore applaud the strong line which the Government is taking against proposals which would place our farmers at a disadvantage and our countryside under further threat purely as a result of the greater size of farms in this country. But to oppose the current EC proposals is not enough. Reform is now both necessary and inevitable - the question is how it is to be achieved.

One of the most widely reported consequences of the CAP has been the surpluses it has produced - and they are not going to go away without major changes somewhere in the system.

Two options which are frequently discussed are based on production quotas (which have so many undesirable features that I do not propose to mention them again), and on reducing on the two key inputs - land and fertiliser.

Reduction of land in production has been attempted by the set-aside scheme, but the results so far have been thoroughly unsatisfactory, both in the amount and quality of land set-aside and, more importantly, in its highly damaging environmental and psychological effects. Paying farmers not to farm, and perpetuating the notion that we have surplus land rather than surplus food is not the answer. Even if it were, the price for set-aside is clearly too low to tempt many farmers into what amounts to a denial of their existence.

Encouragingly, more positive and creative options, such as encouraging reversion to permanent pasture by allowing a grazing regime, and the Farm Woodlands scheme are now being tried, with the result that we in this country are increasingly the pioneers in Europe of making set-aside an environmental asset.

Another possible control is on fertiliser use, and specifically nitrogen. I am aware that this is a highly contentious idea, and no doubt the agro-chemical lobby are preparing their powerful defences against any such proposal, but I hope the possibilities will be examined with great care. Advocates of such a policy point out that nitrogen is the most important single factor affecting the quality of food produced on a given area of land. A reduction in nitrogen, through some sort of quota, or even tradeable permits, would solve the production problem. It would also help reduce both the amount of pesticide needed to safeguard over-lush crops and the levels of nitrate in our drinking water.

The other way of reducing surpluses is through cutting the CAP's high support prices. This may seem an obvious answer, but immediate reductions to the level needed to remove surpluses would literally drive many farmers out of business. I also believe (though other people do not) that price pressure can lead, as can set-aside, to intensification, as farmers struggle to maintain their incomes.

It has to be said that none of these alternatives of set-aside, nitrogen quotas and price pressure is in the least bit welcome to farmers, because all three promise a reduction in real incomes. But in each case the proposals can be made acceptable, and the threat of intensification reduced, by introducing direct payments to farmers for environmental services - whether it be for enhancements to set-aside or more specific habitat creation and re-creation proposals. The crisis of the CAP obviously has to be faced, and the cycle of intensification has to be broken. The challenge is to substitute something meaningful in its place. We know what the public want - sensible quantities of food, and an attractive environment. Personally I don't believe that is an impossible task.

Having just touched on the environmental issues, I would now like to look at them in a little more detail. Much the most encouraging development is the establishment of the Environmentally Sensitive Areas scheme - a British idea, pioneered in Europe by the then Minister, Michael Jopling. This genuinely broke new ground, in those areas which have been designated. Farmers in the scheme do not need to plan their next capital investment or intensification, and their income is assured - at least for the duration of the scheme.

This scheme does deliver genuine environmental benefits, but in national terms it touches less than the tip of the iceberg. The ESA budget in the UK is only a miniscule half of one per cent of the UK's agriculture budget, and the ESAs themselves cover less than 5 per cent of our land area. There is immense scope for other schemes along these lines, with the ultimate aim of recognising that the entire countryside is environmentally sensitive. I believe every farm has, or could have, features of real interest - green lanes, wildlife corridors along river-banks, rare arable plants in cornfield margins, or even just an expanding colony of orchids.

An environmental approach to the land must still take into account the need to produce what consumers want to buy, and indeed it opens up new opportunities. As CAP support declines and as governments become more careful about approving fertilisers and other chemical usage, the sheer output orientation of farmers should reduce. As at the Duchy of Cornwall Home Farm at Highgrove, many farms may revert back from the almost one-product crop to the mixed stock and crop methods which British farmers operated for centuries. Balanced mixed farming methods using rotational systems can maintain and improve soil by-products. Mechanisation and larger farm sizes both make mixed farms more easily organised.

There is no doubt that the guaranteed payments for individual products under the CAP scheme have resulted in a most unhealthy degree of intensification and specialisation. This has meant, for instance, that in some parts of the country the disposal of straw has become a real problem, and yet in other areas, valuable muck and slurry is now seen only as a potential pollutant. This sort of imbalance has been caused by farmers not having to worry about the risk of only producing one product, because the payment for that product was guaranteed by the government. In the new world of lower support prices and more market orientation, that imbalance must surely begin to change so we can once again farm each area in a m ore diverse and sustainable manner, regaining empathy with soil, plants and weather.

In this new situation, many farmers will find that it actually pays them to produce organic or Conservation Grade foods, "real" meat and local specialities. These are all options which increase consumer choice and provide for higher standards. A greater marketing orientation by farmers is an essential element in all of this, but it is equally important that the produce offered to the consumer is a real improvement on the standard item and achieves what it claims it does. There is ample scope for confusion in this area and plenty of evidence that the confused consumer quickly becomes both disillusioned and highly resistant to further approaches of this sort.

Personally, I am encouraged by the number of farmers who have already gone beyond these 'halfway houses' by choosing to farm organically. But I remain astonished at just how many other farmers still look at organic farming as some kind of drop-out option for superannuated hippies, since, as one of those superannuated hippies, I have just taken the decision to farm the whole of the Highgrove Home Farm organically, I hope I may be excused the luxury of injecting a short commercial at this point. Don't worry, I quite expect to see mental shutters coming down, and eyes glazing over, but the level of ignorance about both the principles and practice of organic farming does disturb me, and you would probably think it remiss of me not to mention something in which I believe so strongly.

The first thing to say about organic farming is that it will not provide an economic means of feeding the entire nation, at least not while we maintain our current dietary preferences. There are simply too many of us on this small island. Nor is it something which every farmer can embrace, because it requires a strong degree of personal commitment and belief in the principles behind it.

To me, organic farming combines the traditional wisdom of sound rotational farming practice with much of the best that modern technology can provide. There are, I believe, greater advantages in improved soil management, maintaining a diversified flora and fauna, reduced pollution and increased energy self-reliance than many commentators have so far been prepared to acknowledge. And you only have to see the faces of some of the people who come to look at some of our organic farming operations at Highgrove to see that sometimes scepticism finishes.

Most of us who farm organically do so because we want to produce food in a natural and sustainable way; to work with rather than against nature and to rear and keep our animals economically in an extensive rather than an intensive manner. Experience at Highgrove has included re-learning a lot of traditional skills and, yes, of course there have been mistakes along the way. But there is also an economic aspect and, so far, our organic farming is doing well. With 60 per cent of this country's organic produce coming from abroad, there is clearly substantial scope for other farmers in this area.

There are just two main impediments to success. Firstly, the high prices charged for organic produce continue to put it beyond the reach of many consumers. Better marketing and liaison with retailers should eventually lead to an increased market share and therefore to reduced premiums. Secondly, the conversion period has to be regarded as an investment, and few farmers have anything left to invest. Bearing in mind the role of organic farming in reducing both over-production and environmental pollution, and the potential for reducing imports, I do hope the Government will soon be able to carry out a long-standing promise to find more and better ways of helping potential organic farmers. I am told this particular path is blocked in Brussels. If so, I hope it will soon be unblocked.

Of course, there are a number of schemes which already recognise environmental and social factors, rather than the pure output considerations which have dominated the CAP. I have already mentioned the Farm Woodlands scheme and special help has been provided for many years to upland farmers. But I am concerned that although these and other similar schemes are good initiatives they are somewhat arbitrary and not sufficiently well coordinated or targeted.

For instance, the Hill Livestock Compensatory Allowance has encouraged farmers to overstock, leading to over-grazing and the undesirable 'improvement' of ecologically valuable semi-natural habitats. The British initiative to 'green' the HLCAs, which has gained Community agreement, should make it possible to avoid these disadvantages, and produce a scheme which will give support in the hills without damaging the environment through overgrazing. Many of us would be particularly pleased were such a scheme to tackle the increasing problem of heather loss in our upland areas.

There does seem to me to be enormous potential for overhauling all the existing grant schemes, bringing them together in a much more coordinated package with a real sense of direction and adequate funding and, above all, making them available to all farmers, wherever they are. Such a policy would be a clear acknowledgment that although the market does indeed provide the best discipline for food production aspects of farming, there are other functions, to do with the long-term care and appearance of the countryside, which cannot be resolved through the operation of the market. Those stewardship and environmental functions are in great demand as far as the public is concerned and they need to be properly rewarded.

Providing the resources for direct environmental payments will undoubtedly mean a re-direction of agricultural support. The money, in global terms, is certainly there; last year the CAP budget was £20 billion, but nevertheless farmers in Britain face declining incomes. Partly this is because a good deal of the money is not paid to farmers at all. If only we could redirect our expenditure so that it supported environmentally friendly farming and the proper conservation of the land.

One of the most remarkable - and encouraging - developments in this area in recent months has been the way in which the environmental organisations, once fierce and largely indiscriminate critics of farming, have turned their increasingly professional hands to articulating positive alternatives to agricultural policy. I can think of half a dozen well written and carefully argued documents which I have seen recently. They all acknowledge the needs and problems of farmers and their proposals deserve to be taken seriously - not least because they represent the environmentally-concerned public, whose support for farming is vital.

Sadly, where the general public's attitude to farming is concerned we have a public relations problem. All the health scare issues have not helped and agriculture is, regrettably, not often seen as a friendly environmental influence. Images persist of wealthy farmers riding around the countryside, destroying wildlife habitats and living off a generous tax-payer, as do reports of butter mountains, cereal stores and wine lakes. Set-aside is easily (and not unfairly, in my view) portrayed as paying farmers for doing nothing. In a slightly muddled, but well meaning, way the public has a series of notions about what it wants from the countryside, in addition to reliable supplies of good food, and I believe it is up to us to translate those notions into practical action.

Farmers themselves must accept the responsibility of reducing the alienation which now exists between farmers and the bulk of the population. It is essential that farmers become better understood. The RASE, through the Royal Show and in other ways, plays its part, but far more needs to be done. Education is the first essential. I know that there are some splendid schemes in operation such as 'Farmers Adopt a School' run by the South of England Agricultural Society and Brighton Polytechnic, and anything of this sort is tremendously helpful. Of course, such activities can take up precious time, but they are, quite literally, an investment in the future. Processors and retailers can also do much to help by ensuring that production of food has a strong positive image with consumers.

It is now an inescapable fact that public concern about animal welfare is growing all the time. Farmers are having to come to realise that although the majority of people do indeed still like eating mate, they're not prepared to put up with unjustifiable cruelty and poor husbandry practices. In the debate on Sir Richard Body's Private Member's Bill to outlaw the use of all stalls and tethers in pig rearing systems in this country, David Maclean, the Junior Minister at MAFF, informed the house that he had received as an MP more mail about this issue than on the crisis in the Gulf - and even that, I suspect, is but the tip of the iceberg of humanitarian concern for the welfare of farm animals in this country.

I understand only too well the problem for UK pig farmers of being placed at an economic disadvantage if their European counterparts are able to continue with indisputably cruel practices - as I believe has been the result of the UK banning the use of veal crates while the rest of Europe carried on as before. It was therefore good to see that Mr Gummer has decided to pursue these concerns with his EC colleagues, many of whom face far less vociferous lobbying from environmental and animal rights activists than he does!

I don't think it is necessarily all that helpful if many of those with the interests of the farming community at heart continue to dismiss public concerns about the welfare of farm animals as irrelevant or irrational. In this respect, it may not be productive any longer to claim that "the experts always know best". The crisis engendered by Bovine Spongiform Encephalopathy (BSE) seriously undermined the credibility of such patronising expertise, and the livestock industry in this country is only just recovering from the experience.

There were many farmers, even in the early Eighties, who felt very strongly that it simply wasn't right to be feeding herbivores with the rendered remains of other herbivores. There may well have been no specific scientific evidence to demonstrate the dangers of such an approach, but 'natural wisdom' was enough to deter them. Others simply accepted the practice because it was legal.

Farmers would of course argue that they have little influence - let alone control - over the animal feed industry. But choices can still be made by individual farmers. Post-BSE, I suspect that they will be. But for responsible choices to be made, there has to be proper freedom of information about the specific contents of different feed brands. I gather that labelling rules are now a matter for the European Community. In which case I can only say that it has taken an extraordinarily long time for them to produce sensible and proper rules, and I profoundly hope that Professor Lamming's enquiry into the practices of the animal feed industry will ensure that customers have all the information necessary for them to make proper decisions.

Given the huge issue of consumer confidence which is at stake, it is hard to believe that if very competitive, food manufacturers cannot adequately label their products for farmers. Accountability to the public requires a much more positive role from farmers themselves in defence of the public good. That is the only way in which the farming community will restore confidence in itself and in which the image of modern farming will be transformed.

Many of the environmental issues I have mentioned so far could be addressed in the short-term to provide rapid and reassuring results, and I hope they will be. Even the maddeningly slow process of planting broad-leaved trees will produce evidence of growth after a few years. But arguably the most important environmental concern, sustainability, cannot be seen, only deduced - or its absence detected. It is a concept which is much discussed, and has come to mean many things to many people (often closely approximating to what they would each like it to mean). To me it means that everything is done with one eye kept on the needs of future generations as well as our own. It is the acid test of our stewardship of the natural resources which someone else will need one day - perhaps more than we do.

Historically, farmers have been very conscious of preceding generations and even more conscious of the land and fertility store they were leaving for their families. In medieval times the importance of sustainability was recognised in a whole series of local regulations to prevent long-term damage to village resources. Replacement trees were to be planted every year, and no manure was to be sold off the manor. Even the expression 'by hook or by crook' derives from the way that wood could be collected from trees - only by knocking or pulling down the dead branches with a hook or crook, and not by felling.

The concept of sustainability is something we have tended to lose sight of under the pressures of output subsidies. Instead we hear a great deal about efficient farming. But should we not stop and ask ourselves "efficient for whom, and over what period"? Is it really efficient to produce more wheat than we need, at four or more tons per acre, at three times the real world price, and then dump the surplus on the world market, thereby depressing the price even further - to the great disadvantage of third world producers? I need hardly add that the huge amounts of nitrogen fertiliser required in such 'efficient' farming are synthesised using vast amounts of power, most of which comes from non-renewable fossil fuels - with the release of equally vast amounts of carbon dioxide.

Is traditional mixed farming, using animal manure and the nitrogen-fixing ability of clover and other leguminous plants to build soil fertility, any less efficient in the long-run? It is certainly infinitely more sustainable, and I suggest that it may also allow a more flexible response (and therefore greater security) in times of hardship. Of course, sustainability is not only important in a physical context, it also has cultural aspects and the human and social dimension must be considered when looking at the impact of our policies.

Sustainability and stewardship are not new objectives in farming; they are thoroughly traditional objectives, and well tried and tested in the process. We can still attain them today, but only if they are made absolutely central to farming policy. Bolt-on extras, whether for greenery, food quality or other social responsibilities simply won't work.

Food production and stewardship of the land can be re-integrated, but this will require fundamental reform of agricultural policy as we know it. Flows of money will have to be re-directed, so that less is wasted on surpluses and more reaches the pockets of farmers, in ways that will encourage them to farm with a greater sensitivity to the environment and the concerns of the consumer. To do this we will have to get away from using the output of farms as the sole measure of the extent to which farmers should be rewarded. We will also have to reject absolutely the suggestion that we should have a two-tier agricultural system with some areas designated for full-blown intensive production, and others for conservation only, with farmers as fully paid-up park keepers.

This idea, you may have noticed, is usually compounded by those who farm large areas of god land, and cheered to the echo by the agro-chemical lobby. Now it may well be that we will one day need some high input/high output farming to feed ourselves and others, and it is comforting to know that we can do it if we have to, but the fact is that at a time of massive over-production we don't need to do it. And nor should we because the consequences for those on the poorer land, who frequently tend to be the smaller farmers, and their communities would be disastrous. Can we not accept that we need to keep the whole countryside working and accept that it is all environmentally sensitive?

It would be encouraging if some of this thinking could inform the continuing debate in Brussels about the future of the CAP. There are clearly both external and internal pressures on the Community to make substantial changes in current practices. This could give Europe the same opportunity to set a positive direction for the next decade as was given by the introduction of the 1947 Agriculture Act in the UK.

The overwhelming impression one gets from the current debate is that all the balls are still in the air, but there is no way of knowing whether all - or any - of them will be caught. Farmers are, rightly, dismayed by their own circumstances and what they perceive as a lack of leadership, bewildered by events internationally and in Europe, and angry about the repeated batterings they receive from all sides. But some of the clouds around us do, perhaps, have silver linings. The potential for creative alliances between farmers, environmentalists and consumers has certainly never been greater. The challenge is to turn this latent goodwill into something more tangible, and then to convince policy makers that there are some real, convincing and workable alternatives.

All of this constitutes a compelling challenge to the RASE and the Royal Show. I would like to stress to you today the real urgency of this. There is a window of opportunity at the moment which may not remain open for very long. May I suggest to you and your Council that you have the debate I have suggested about the economic and environmental factors and then set out to provide leadership for the industry in reconciling these items. If you agree that this would be useful, perhaps I could help the Council to use its good offices to bring together all the interested parties.

I would then be very pleased to attend a further Council meeting later in the year at which you could present your views and we could discuss how best to take things forward. Nobody wants to sit back any longer and watch the decimation of the British farming community and the continuing erosion of the British countryside. I know that you all share these concerns with me and I am certain that there would be wide public support for the RASE if it were to rise to the challenge and turn a thoroughly messy crisis into a new opportunity."