Taxpayers have pumped money into the countryside. So is there really a crisis?

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The Independent Online

The rural economy in Britain has been taking a beating. Its two main drivers, agriculture and tourism, have both had difficult times. The experience is very uneven. There are pockets of rural success, some of them substantial, and there are sadly big pockets of urban failure. But the general pattern has been for the countryside to miss most of the latest boom and be particularly hard hit in the current downturn.

The rural economy in Britain has been taking a beating. Its two main drivers, agriculture and tourism, have both had difficult times. The experience is very uneven. There are pockets of rural success, some of them substantial, and there are sadly big pockets of urban failure. But the general pattern has been for the countryside to miss most of the latest boom and be particularly hard hit in the current downturn.

Agriculture may be only 1.7 per cent of the British economy but for the truly rural parts of the country (ie, outside of the commuter zones) it remains the main motor for all activity. Many market towns exist largely to service farming, so service industries that you might imagine are independent of agriculture are actually extremely dependent on it. Agriculture has, of course, faced particular disruption from BSE and foot-and-mouth disease, but more generally it has been under price pressure for a decade as agricultural subsidies have been pared back.

The impact of this squeeze is uneven. As a rule of thumb, the west of the country is having a tougher time than the east and small farms tougher than large – the prairies of East Anglia are doing better than the Cumbrian hill farms. But at an individual level there are naturally many anomalies. Some farms in a really difficult area have found their most reliable cash crop has become holiday cottages; others that have up to now been doing well have been savaged by a sudden fall in the price of a single commodity, such as milk. But the general pattern is a squeeze.

Tourism is a much larger business than agriculture – on its widest definition it is about 11 per cent of the economy – but most of the industry is urban. Most visitors to Britain spend most of their money in London and when they leave they go to other signature cities such as Edinburgh or York, rather than roaming the countryside. But for some parts of rural England, much of Wales, and just about all of Scotland, the travel industry is even more important than agriculture.

It has been a tough year for the most obvious and saddest reason: the post-11 September travel slump. That came on top of the message to townies to stay away from the country because of the outbreak of foot-and-mouth. But even before these specific blows, the industry was already in trouble. The relatively high pound and the proliferation of cheap flights to the Continent have tipped the balance against British holidays. The weather has not helped, for while city visitors have many wet-weather options, the countryside relies on its outdoor attractions. For a small shop in a tourist centre in, say, south-west Scotland, four wet weekends at the height of the summer season is the difference between profit and loss for the year.

The tragedy is that the taxpayer has pumped vast amounts of money into the countryside: coping with foot-and-mouth alone has cost £3bn and of course the still-considerable agricultural subsidies are on top of that. But the spoils have been distributed in a haphazard way, with some farmers in some parts of the country doing rather well from compensation. But tourism, the bigger industry, has not been compensated at all. So it is not just the farmers but whole rural communities that feel squeezed by the economy and unloved by the politicians.

Ultimately the economic future of the countryside will be determined by the people who live and work there, not by Westminster, Whitehall or even Brussels. But the public sector has a more important role in the countryside than in the town. Communities are more dependent on public services – and more affected by ill-considered regulation. The marchers this weekend clearly feel that the public sector should raise its game.

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