In the new farming world, costs and returns are increasingly being set by the most efficient producers in the world. For milk, New Zealand, and, it must be said, Ireland where suitable land and expertise is used, while for beef and protein crops, South America has a clear advantage.

The policy responses have been mixed. The EU has put in a system of direct payments to compensate for the reduction in guaranteed prices that were linked to European costs of production.

In recent years, there has been an environmental dimension but this has been mainly based on what is forbidden under the code of good farming practice rather than real incentives.

Change in thinking

Environmental payments are, in the main, small, but we are seeing a change in thinking. Serious questions are now being asked as to how those with less than excellent land can earn enough income to encourage them to stay in farming and prevent land abandonment and rural decay over large areas. Last week, the Agricultural Science Association held an interesting meeting in association with Devenish, the specialist supplement company.

One of the main speakers was Teagasc soil scientist David Wall from Johnstown Castle. He put logical analysis on a subject about which policymakers and others have been thinking for decades.

Originally, the disadvantages of farming in difficult areas were dealt with by making disadvantaged area payments.

For the foreseeable future, all the signs are that we will see increasingly abundant supplies of normal food so land is being diverted to energy, carbon sequestration, forestry, wildlife conservation and landscape. In some cases, this is what these marginal quality acres are best suited to rather than large-scale drainage and perhaps reseeding with mediocre results. But how should farmers be paid for these efforts?

These Pillar II public goods are becoming more centre-stage as CAP reform talks progress but, so far, a sensible measurement system of how farmers should be paid for providing them has not been developed. It will have to be.