LSIRD NAPLIO CONFERENCE PAPERS

Beef farming in the GB LFA -
the response of farmers to the 1992 CAP reform measures
and the implications for meeting world trade obligations.

Professor M. Winter, J.A. Rutherford, & Dr P Gaskell

1. Introduction

Upland heather (Calluna vulgaris) is one of the most important and distinctive habitats in north-western Europe, with a considerable proportion of its distribution in Great Britain (Thompson et al 1995). It is important for its distinctive plant communities and associated animal species, particularly birds, as well as from a landscape and amenity perspective. Economically, heather is significant because it is so essential to grouse populations, grouse being an important game bird. However, much heather has been lost or degraded as a result of both afforestation and heavy grazing, especially at the grass/heather interface. The grazing problems are exacerbated by winter feeding on old heather, poor burning, decline caused the heather beetle, and competition from bracken (Johnson & Merrell 1994). There was a net loss of 20% of heather moorland in England and Wales between 1947 and 1980 with heavy grazing by sheep accounting for 67% of the total change in moorland cover (English Nature 1996). There is now considerable policy concern to ensure the maintenance or improvement of existing heather communities and, even, to re-establish heather moorland. There is also concern about grass moors where course species, such as Molinia and Nardus, are spreading at the expense of finer grass species and a diverse ground flora.

The replacement of cattle by sheep is of particular significance here, for sheep are more selective grazers than cattle and less likely to graze the course grasses that compete with heather. Thus, Rushton and Bryne (1990), found that an increase in ewe numbers of 40% between 1979 and 1989 was associated with a 40% reduction in the area of heather in situations where heather had accounted for more than 50% of the ground cover. Heather moorland (and grass moors too) are maintained by a combination of appropriate grazing, burning and trampling. In these ways, control of the coarse grasses and the bracken that compete with heather and the finer grasses is promoted. Hitherto, much of the discussion of heather decline has focused on sheep stocking rates and has rather neglected the significance of cattle. But there is an increasing consensus that cattle have a pivotal role in grazing and trampling course grasses and trampling bracken. As sheep have replaced cattle in the uplands so the problems have increased. .

Vegetation change is not the only issue of importance. Cattle, especially the traditional and distinctive hill breeds (such as Welsh Black, Highland and Galloway), play an important role in the cultural landscape of British upland areas (Evans and Yarwood 1995). From the perspective of cultural aesthetics the uplands would be a poorer place without them.

The decline of cattle in the uplands has been a consequence of a combination of factors to do with the economics of cattle and sheep production over a couple of decades and more recently, the operation of sheep and suckler cow quota rules. The crisis in the beef sector and in beef consumption brought about by BSE has only served to exacerbate existing problems.

This paper examines data on the current state of beef farming in the uplands of Britain and considers the prospects for policy changes and the implications of these for upland beef farming. Clearly what is happening in the beef sector provides only part of the story and further work is, additionally, exploring the sheep sector. Thus this paper should be seen as an interim account of some of the key current agricultural production and policy trends.

2. Background data from the CAP reform project

The research on which this paper is based forms part of a larger three year project to investigate the impact of the 1992 reforms of the Common Agricultural Policy (CAP) on the GB countryside. The research involved a continuous desk study and interviews with 558 farmers and 17 crofters. The sample frame was constructed from data provided by the Ministry of Agriculture Fisheries and Food (MAFF) and Welsh Office Agriculture Department (WOAD) for England and Wales, and the Scottish Office Agriculture, Environment and Food Department (SOAEFD)( hereafter referred to as "the agriculture departments" ). The purpose of the sample was to provide an illustrative selection of farms, stratified to represent farms across the farming sectors and geographical areas (Table 1). A sample of 588 holdings was stratified according to geographical location (England; Scotland and Wales); farm type (Cereals; General Cropping; Dairy; Cattle and sheep (LFA); Cattle and sheep (lowland); and Mixed farming) and size of holding (20-99.9 ha, 100-299.9 ha, and 300+ha). It is important to note that the stratification over-represented farms with larger areas of land at the expense of smaller farms. In the analysis presented here no attempt has been made to weight the data to take this into account, but this is being done for the final project report. The data presented here draw on an interim project report on the beef sector (Gaskell and Winter 1996).

Table 1. Stratification of sample by farm type, farm size and country.

The purpose of the farm survey was to provide in-depth information on farm decision making and management in order to identify and to explain changes in agricultural activity which affected land management. The farm survey was carried out during 1995/96. The sample was not designed to be representative of farms with beef enterprises. However, it is representative of the farm types most influenced by the CAP reforms of 1992. Two thirds (389) of the interview survey possessed a beef enterprise and 125 of these were located in the LFAs (Table 2). The location of the LFAs in GB is shown in Figure 1.(Figure 1 is not yet available)

Table 2. The frequency of beef enterprises in the sample

The geographical distribution of the beef farms in the sample is shown in Figure 2.

3. Beef production systems in Britain

Grazing livestock in Britain fall into three main categories: dairy; sheep; and beef. Dairy farming in Britain is a highly specialised sector utilising specialist breeds (Friesians or Holsteins) rather than traditional dual purpose breeds, and is no longer common within the LFAs except in parts of west Wales. Beef, seldom the main enterprise on a farm, is associated with a wide range of other enterprises depending on location. On lowland farms, a beef enterprise would typically be used either to exploit arable by-products in intensive or semi-intensive systems, or for more extensive production from grass or a forage crop used as a break crop in an arable rotation.

In upland or mountainous areas (LFAs), sheep are the dominant farm enterprise, found virtually on all farms. Where beef cattle are also farmed, their grazing is likely to be confined to both open and enclosed land in valleys or lower slopes, although in some English LFAs, such as Dartmoor, they are to be found on the same range of land as sheep. The secondary role of beef enterprises on most farms (Table 3) is important in assessing reactions to, and impacts of, changes in beef policy.

Table 3 The contribution of the beef enterprise to total agricultural turnover

Because beef systems are so often linked to other enterprises, they are designed to suit a particular farm's circumstances. But at the risk of generalisation, most systems fall into one of four main systems:

Suckler Systems: Beef breeding systems made up of breeding cattle and calves. Calves are usually weaned at 6-9 months and either sold, usually to lowland farms, or retained for further finishing. Suckler herds can be sub-divided into hill and upland systems or lowland systems depending on the premia they attract and the type of grassland on which they are grazed. In this paper they are distinguished as LFA suckler and non-LFA suckler.

Extensive rearing and finishing systems: Beef animals reared for slaughter which at some stage in their lives graze outdoors but may be housed at certain times.

Intensive rearing and finishing systems: Beef animals reared for slaughter and housed for their entire lives.

Two thirds (66.5%) of all survey farms with a beef enterprise had a suckler herd and just over half of these herds were situated in the LFA. Table 4 shows the distribution of the major beef systems, revealing the relative rarity of intensive systems.

Table 4 Distribution of major beef systems by country

The distribution of beef systems varies according to farm type. Extensive beef rearing systems are more dispersed than suckler systems; dairy farms accounted for almost 32% of extensive beef followed by 23% on mixed farms, 23% on cereal and cropping farms and 16% on non-LFA livestock farms. Intensive beef had a strong association with dairy and cropping farms, 33.3% and 28.6% respectively, followed by cereal farms which accounted for 14.3% of intensive beef enterprises.

The size of farms with LFA suckler systems varied considerably. The average size of farm was 378.8 ha. with a range from only 20.2 ha. to 5,050.3 ha. However, this large degree of variation was in part due to the sampling frame employed. As was expected sheep enterprises were normally run in association with the suckler herd (Table 5).

Table 5. Enterprises found in conjunction with LFA suckler herds

The beef enterprise usually made a significant contribution to the agricultural turnover of the LFA farm. On 43.2% of the farms the beef enterprise made up at least half the agricultural turnover. The average farm had a suckler herd of 40 cows with a range of 3 to 344 cows. Single suckling was virtually universal with only 4 farms (3.3%) practising multiple suckling. The majority of suckler herds calved in the spring (61.0%). The average number of cattle sold in 1994/95 was 72.3, with over half of the farms (54.0%) selling 50 cattle or less and 30% selling over 100. Most of the farmers sold their cattle at 12 months or under (66.4%), a further 20.8% produced strong stores or 18 month beef.

The average forage area was 361.2 ha. ranging from 10.1 ha to 4,469.8 ha. Most farmers (113) had quota for the Suckler Cow Premium (SCP) and 94 claimed the Beef Special Premium (BSP).

4. The role and objectives of the countryside agencies

An understanding of the agri-environmental objectives of the agencies who commissioned the research on which this report is based is necessary in order to appreciate how beef farming in Britain is evaluated from an environmental perspective. To summarise, the agencies:

• give a high priority to encouraging the identification and adoption of techniques which lead to the sustainable use of natural resources;
  
• have a remit that extends to protecting and enhancing the environment with natural and human aspects increasingly seen as integral parts of the same system;
  
• have an interest in the human environment that includes aesthetic, amenity/recreation, historic, cultural and socio-economic considerations;
  
• have a statutory obligation to advise government about the appropriateness of policy reform options;
  
• recognise that agriculture has a significant effect on their ability to achieve these aims.
  

It is a fundamental requirement, recognised by the agencies, that any farming system must be economically viable in order to support the people who are directly dependent on it for their livelihoods and to deliver wider social and environmental benefits. The commercial viability of most beef farmers in Europe depends on both the market returns for their products and public support via the Common Agricultural Policy. Many of the social and environmental benefits that are associated with agricultural activity are beyond the reach of market mechanisms. For example, an attractive rural environment may well be the result of traditional farming systems but is not of direct economic value to the farmers who produce and maintain that environment. However, such a landscape may be of considerable aesthetic and cultural value to society as a whole or may contribute to the social fabric of the area because of the economic value that arises from indirect activity such as tourism. The valuation of farming systems in economic, social and environmental terms and the justification of continued public support of agricultural activity is therefore a complex task. And as society's values concerning food security, food safety, farming ethics, animal welfare, cultural heritage and the natural environment are rapidly changing, that evaluation and justification is requiring policy makers to take a much wider interpretation of the meaning of farming and the countryside.

In general terms it is with reference to environmental sustainability that the management, and the effects of policy on the management, of beef cattle in Britain are judged by the agencies that commissioned this research. While it is recognised that this is only a partial view it is hoped that it will be helpful in enabling a more integrated approach to this area of rural policy. In summary the agencies' understanding of environmentally sustainable agriculture entails conformity to environmental objectives in the areas of: wildlife and habitat protection; resource use and protection; landscape; social, cultural and historic heritage; recreation, amenity and health.

With regard to beef production, and the policies that influence it, the broad environmental objectives of the agencies can be summarised as:

• to secure adequate grazing where it is needed and where it is more beneficial for cattle to be present than absent;
  
• to avoid the natural carrying capacity of the land and any high value vegetation;
  
• to maintain and rebuild the natural fabric of the countryside (eg hedges, walls, ditches, rough areas, trees, natural river channels, flood lands, heaths, woodland, historic landscapes and species rich grassland;
  
• to maintain at the whole farm level integrated mixed management units (ie beef with other enterprises);
  
• to support extensification, whereby heavy use of inputs is reduced significantly;
  
• to discourage the adoption of systems that involve the use of intensive indoor units, especially in sensitive landscapes;
  
• to maintain and rebuild the elements of the cultural heritage of the countryside.
  
  
  

5. The 1992 CAP Reforms

In 1992 the European Commission, under the leadership of Commissioner Ray MacSharry, introduced a major reform of the CAP. The objective of these proposed reforms was essentially to restore the ability to control farm support expenditure. Throughout the 1980s production of several major commodities, notably cereals, beef and dairy products, rose dramatically and led to an escalating costs of market intervention, storage and subsidised export of surpluses. The MacSharry plan was to shift the basis of the CAP away from price support and towards direct payments that were less production distorting. At the same time the negotiation of the GATT Uruguay round demonstrated that in the future Europe's agricultural policies would need to be compatible with global trade obligations. Up to December 1995 the European Commission argued that the 1992 MacSharry reforms were indeed compatible with the GATT Agriculture agreement (Buckwell 1996).

The key measures relevant to the UK undertaken in the beef sector were as follows:

• Intervention prices cut by 15% over 3 years from 1993/94.
  
• Ceilings progressively introduced on intervention purchases from 1993/94 to 1997/98.
  
• The beef special premium (BSP) increased from 1993/94, with the number of eligible animals constrained by regional ceilings, limited to a maximum of 90 male head of cattle per producer.
  
• The suckler cow premium (SCP) increased in 1993/94 subject to individual producer quotas.
  
• An extensification premium introduced from 1993/94.
  
  

The support of the beef sector under the reformed CAP was designed to:

• offset the loss of income resulting in the cut in the intervention price through the BSP and the SCP.
  
• establish market equilibrium throughout the year (deseasonalisation premium), not applicable in GB.
  
• encourage extensification.
  
• reduce beef production from dairy herds (calf disposal scheme or, alternatively, intervention arrangements for lightweight carcasses).
  

The detailed rules of the various measures are not considered here apart from the use of livestock units and forage area to determine stocking density criteria for eligibility to certain premia and the eligibility for the Extensification Premium. This is because these measures have a direct bearing in assessing how effective the reforms have been from an environmental perspective of promoting a more extensive and environmentally sustainable beef sector.

Eligibility for both the BSP and the SCP is now conditional on meeting certain stocking density rules, expressed as a number of livestock units (LUs) per hectare. Eligibility for the extensification premia is also based on the stocking density criteria. The limit for 1993 was 3.5 LUs, progressively reduced to 2.0 LUs in 1996. The calculation of stocking densities is complex and requires a submission to the agriculture departments providing, inter alia, detailed data on the forage areas and livestock numbers on the holding. The following factors have to be taken into consideration in the calculation of stocking rates:

i. Livestock units

• dairy cows (1.0 LU)
• breeding ewes on which sheep premium is claimed (0.15 LU)
• male cattle, under two years of age, on which BSP is claimed (0.6 LU)
• male cattle, aged over two years, on which BSP is claimed (1.0 LU)
• suckler cows on which SCP is claimed (including in-calf replacement heifers) (1.0 LU)
  

ii. Forage area

• This is the area of the holding available throughout the calendar year for feeding or grazing livestock excluding, buildings, woods, ponds, paths, areas used for crops benefiting from community aid, areas used for permanent crops or horticultural crops and areas of land set-aside.
  

iii. Extensification Premium

• Where a farmer has a stocking density of less than 1.4 LUs per hectare of forage area, then a supplement is payable in addition to the BSP and/or the SCP.
  

It is very important to note that the stocking density rules only apply to the categories of livestock specified above rather than to the actual number of animals on the farm. Farmers may also keep animals for which no claim for premium is made or other animals which are ineligible for premia, such as non-breeding female beef stock, calves under six months of age, lambs or alternative categories of livestock such as deer. It is also significant that the definition of forage area could include areas of arable on which aid under the Arable Area Payment Scheme is not claimed.

This reliance on 'paper' animals and forage area, rather than actual stock and forage areas on the farm, to calculate stocking densities, raises the possibility of claims rather than stock numbers being adjusted in order to qualify for the Extensification Premium and in ensuring claims observe the stocking density limits. As will be seen the existence of a 'paper' farm has been a significant factor in determining the environmental value of the beef regime reforms in Britain.

6. The impact of the 1992 CAP reforms on LFA suckler systems and management

The survey on which this paper is based provides information on how the four main beef systems operating in Britain were modified in response to the 1992 reforms. However, for this paper we focus chiefly on the changes observed in LFA suckler systems, although reference is made to data from the other systems where this is relevant.

Changes in management since 1992

Three quarters of farms (76.0%) had not changed their area since 1991/92. However, 22 holdings (17.6%) had increased and 8 (6.4%) reduced in size. The contribution of the beef enterprise to agricultural turnover had not changed on half of the farms and where there had been a change the direction of change was equally divided between increased and decreased importance. Despite the introduction of quotas, average herd size increased from 55.9 in 1991/92 to 59.6 in 1994/95. Just over a third of farmers (34.7%) had expanded their herd while only 11.3% had reduced numbers. The general pattern with regard to management of herds and stock rearing and fattening policy was little changed. Just three farmers had changed their feeding system and three changed the system of stock housing.

With regard to sales, 32% had increased sales by 10 animals or more and only 19.4% had reduced the number of cattle sold, reflecting the trend in changed breeding herd size, although there was little change in the age of stock sold.

Regarding SCP and BSP claims, the majority had made no change, but a significant minority had increased claims (Table 6).

Table 6 Changes in SCP and BSP claims between 1991/92 and 1994/5 (% of farms)

Very few farmers with suckler herds had altered herd management as a result of the reforms. In contrast however over one third had increased the scale of production from their beef enterprise. The introduction of quotas on SCP does not seem to have frozen production patterns in either the uplands or the lowlands of Britain. However, farmers with LFA suckler herds were less likely to have reduced the size of their enterprise, while lowland suckler herds showed a considerable degree of dynamism since the 1992 reforms with only 38.8% reporting no change in herd size compared to 54% in the LFAs. This indicates that farmers in the LFA enjoy far less flexibility in their farming operations in the face of pressure for change (Table 7).

Table 7. Changes in the suckler herd 1991/92 and 1994/95 (% of farms)

The impact of the stocking density regulations (see summary Table 8)

The majority of farmers reported that their stock numbers had been unaffected by the stocking density regulations implemented as part of the 1992 reforms. Only 10 farmers (8.0%) said that the management of their enterprise had significantly changed as a result of the new regulations, and most farmers had accommodated the change by careful management of stocking density, in some instances by increasing the forage area available. Two farmers had responded by adjusting the balance between premia and non-premia livestock by reducing claims for BSP, so effectively removing stock from the calculation of the stocking density. Only two farmers said that the introduction of the stocking density regulations had resulted in an overall reduction of stocking density on their farm.

When farmers were asked how they would respond to the introduction of the lower stocking density (2.0 LSUs/ha.) in 1996, 86% said they would not have to change their management practices. Only 17 farmers (13.6%) said they would need to make changes. Four said they would acquire additional forage area, while seven farmers would reduce the number of premium claims, the remaining six had not decided how they would respond.

The response to the extensification premium

Surprisingly perhaps, given the above observations on stocking levels and the policy objective of reducing stocking levels, the Extensification Premium was claimed by 90.6% of farmers. Of those claiming, just 20.8% had made adjustments to their official stocking density to qualify, the most frequent response being to purchase or rent additional forage area. None of the farmers said they had reduced the overall number of livestock on the farm in order to qualify for Extensification Premia. Only two farmers were planning a reduction in their stocking density to qualify for the Extensification Premium in the future.

Comparing the response to the stocking density regulations and the Extensification Premium in other beef systems we find that in non-LFA suckler herds there had been a modest increase in average herd size, from 72.0 in 1991/92 to 73.2 in 1994/95. Almost all (94.2%) of farmers said they were unaffected by the stocking density regulations. In only two cases had there been an overall reduction in stocking density. The lower 1996 stocking density limit would affect 26.2% of farmers, with only 7.8% planning to reduce livestock numbers. The Extensification Premium was claimed by 64.3% of farmers, with 17.5% having made adjustments to 'paper' stocking density to qualify and only two farmers reducing actual stock numbers. In extensive beef finishing systems the average number of cattle sold per annum during the period between 1991/92 and 1994/95 increased from 80.6 to 87 head. Only 9.6% of farmers said their livestock management had been directly affected by the stocking density regulations, with only two farmers saying it had resulted in an overall reduction in actual stocking density. The main response was to alter the `paper' stocking density by changing the balance between premia and non-premia eligible livestock. Over half of the farmers (51.2%) claimed the Extensification Premium. Of these, 15 had made management changes to qualify, usually by acquiring additional forage area, only three farmers had actually reduced the number of livestock on which they claimed premia.

In contrast to the other systems, intensive beef systems showed a fall in the average number of cattle sold between 1991/92 to 1994/95, from 135.5 to 118.0. Nonetheless, all but one farmer claimed to be unaffected by the stocking density regulations, although seven said that future livestock management would be affected by the introduction of the lower 1996 limits. Even in intensive systems, 38.1% of farmers claimed the Extensification Premium and only one farmer had made management changes to become eligible. None of the farmers who had a stocking density above the extensification limit said they would attempt to de-stock in order to qualify for payments in the future.

Table 8. Response to stocking density requirements and Extensification Premium across the beef systems (% of farmers)

7. Pressures for further CAP reform

Since 1992, when the last major reform of the CAP was concluded there have been a number of significant developments that have once again opened the debate over the need for further reform of the CAP. These arguments were summarised by the European Commission's Strategies paper published in December 1995 (see Tracy 1995). In common with other commentators (Buckwell 1996) this paper cites three major forces for further reform of the CAP:

• Expansion of the EU to include the central and eastern European states;
  
• Environmental;
  
• implications of the GATT/WTO.
  

In the beef sector the compatibility of the 1992 CAP reforms and the requirements of GATT have been in doubt for some time. A report considering the implications of the GATT agreement on the English Countryside (BER 1995) concluded that "it seems likely that the Community may have to make further adjustments to the beef regime in order to bring supply and demand into better balance", and a further report commissioned by the countryside agencies analysed the impact of the GATT agreement on market balance (Entec 1996). This report suggested that, in order to meet its GATT obligations in the beef sector, the EU would need to reduce subsidised exports of beef to 817,000 tonnes by the year 2000, a reduction of more than 30 per cent on the 1993 level. To test if this obligation was achievable a forecast of the beef market balance to 2000 was prepared (Table 9).

Table 9. Projected EU beef market balance ('000 tonnes)

Source: Entec 1996: 48.

The production trend was based on the European beef herd stabilising at 10.5 million head, a 10% decline in the dairy herd and a 1% annual rise in carcass weights. The production forecast was very close to similar exercises conducted by the National Farmers Union and MAFF. The projection also assumed a continuing decline in consumption, which at the time was in conflict with official EU projections. The debate over whether the EU could meet its GATT agreement obligations hinged on the beef consumption trend in the EU. A modest decline in consumption, in line with the long term trend, would lead to stocks of beef in excess of 2 million tonnes by 2001. The BER report concluded that "there is a high probability of a policy crisis in the beef sector towards the end of the century".

In the event, the crisis came even sooner than anticipated. On the 20th March 1996 the UK government announced that there was the possibility that a new form of Creutzfeldt-Jacob disease could possibly be linked to the occurrence of BSE in the UK herd. The effect of this announcement on beef consumption in Europe is well reported, EU per capita consumption has fallen from 23kg in 1988 to 18kg in 1996 (Agra Europe No 171, October 11th). As demand for beef crashed across Europe cattle prices went into free-fall and the future for beef producers was highly uncertain. The EU responded with a set of emergency measures that included additional aid for beef produces and the introduction of intervention buying to take unwanted beef off the European market. From a short term perspective, the measures can be seen as successful, beef prices were stabilised, although still well below pre-20 March 96 levels, and consumption levels of beef in the EU, which slumped by 30-40% in the immediate aftermath of the crisis in March/April recovered to just 10-15% below early March levels by October 1996. However, it is difficult to envisage consumption making a full recovery in the short to medium term and European beef intervention stocks have risen from almost zero at the start of 1996 to 440,000 tonnes by the end of the year (source Meat and Livestock Commission).

The response of beef farms in Britain to the crisis is difficult to forecast. The survey on which this report is based was not designed to examine the implications of BSE and almost half of the interviews took place before the government announcements of March 20th (Table 10). It was therefore possible to get an indication of some of the likely responses to the BSE crisis by comparing the answers given to these questions by farmers interviewed before and after March the 20th. However, it must be stressed that the majority of farmers interviewed after the crisis broke were visited within four weeks of March 20th which gave them little time to consider the implications of the crisis for their farms. While the majority of beef farmers (65%) could not say with confidence what would happen to their farm businesses in the next three years, a sufficient number were able to discuss their plans to make a detailed analysis worthwhile. The most obvious conclusion to draw is that farmers with LFA suckler herds have few alternative options to consider other than reducing beef herds and increasing their sheep production, notwithstanding the limitations imposed by ewe quotas. This could have negative consequences for the management of the countryside as the problem of overgrazing in the uplands has been linked to the same trend of declining cattle numbers in favour of sheep.

Table 10. Date of farm survey by beef production system

8. Conclusions

The beef enterprise is an important component of the agricultural turnover on LFA farms with suckler herds. Despite the introduction of quotas, stocking density limits and Extensification Premia average herd size and cattle sales were increasing until the impact of BSE. The majority of farmers were unaffected by stocking density regulations and on only two farms had these led to an overall reduction in stocking density on the farm. The great majority of farmers (86.4%) would not have to change their management practice even with the introduction of lower stocking density limits in 1996. The Extensification Premium was claimed by almost all farmers and while 20.8% had made adjustments to their `paper' stocking density to qualify, none had reduced the overall number of livestock on the farm in order to qualify for the Extensification Premium.

It is widely accepted that prior to 1992, developments in the CAP had been inimical to the natural environment. Sadly, it is clear that the 1992 reforms in the beef sector have failed to live up to expectations that they might provide a turning point in reversing these trends in the uplands and elsewhere. The reasons for this are twofold. First, the 1992 CAP measures are insufficiently focused on environmental improvement. Apparent elements of conditionality are, in practice, exceedingly week. Secondly, market developments have altered and continue to alter the course of the reforms. This last point is of considerable significance not only in explaining the operation of the reforms in the last four years, but also in bringing home to policy makers and others that the CAP is not the only engine of change in agriculture. Farm management decisions are driven by both policy signals and market signals.

Aggregate responses to market and policy signals are based on individual responses by business men and women motivated by a range of factors to do with the trajectories of their own businesses and of the families within which those businesses are socially and economically embedded. Consequently the precise relationship between countryside change and policy change is highly complex and it is important to recognise that particular trends may be the consequence of a combination of factors.

Future policy reforms must recognise the complex and inter-related factors influencing farmer behaviour if policies are to be designed which will make positive impacts on the natural environment. This is likely to mean a combination of measures designed to capture the potential for protecting natural resources, increasing biodiversity, enhancing landscape character and encouraging public enjoyment of the countryside, in a range of contrasting farm systems and individual farm circumstances. Giver the decline in beef consumption and the obvious need to reduce beef production, there is little doubt that beef cattle numbers will continue to decline in the uplands. This makes it all the more important that policies should be environmentally targeted. It is important that beef cattle should continue to be located, or re-introduced, on key sites where nature conservation or landscape protection demands their attention. Reforms to the beef regime that would encourage slower-growing cattle of traditional breeds should also be explored. At the same time attention should be given to adjusting the sheep regime in certain ways. For example, older wether sheep graze much less selectively than ewes and young lambs. They might replace the valuable role of cattle in certain circumstances but are unlikely to be economically viable as long as sheep payments are tied to ewes and subject to quotas.

BER (1995) The Implications of the GATT Agreement for the English Countryside, Report to the Countryside Commission by the Bureau Europeen de Recherches S.A.
Buckwell, A. (1996) Towards a common agricultural and rural policy for Europe, Winegarten Memorial lecture, NFU, 10th December.
Entec (1996) Options for Change in the CAP Beef Regime, Report to Countryside Commission, Countryside Council for Wales, English Nature and Scottish Natural Heritage.
English Nature (1996) Agri-environment schemes in the uplands, Peterborough.
Evans, N.J. & Yarwood, R. (1995) Livestock and landscape, Landscape Research, 20, 141-146.
Gaskell, P. & Winter, M. (1996) Beef Farming in Great Britain: Farmer Responses to the 1992 CAP Reforms and Implications of the 1996 BSE Crisis, Report to the Countryside Commission, Scottish Natural Heritage and English Nature.
Johnson, J. & Merrell, B.G. (1994) Practical pasture management in hill and upland systems, pp31-41 in Livestock Production and Land Use in Hills and Uplands - Occasional publication No. 18 of the British Society of Animal Production.
Rushton, S.P. & Byrne, J.P. (1990) The dynamics of vegetation changes and flock output of hill land,, Research meeting, British Grassland Society.
Thompson, D.B.A. MacDonald, A.J. Marsden, J.H. & Galbraith, C.A. (1995) Upland heather moorland in Great Britain: a review of international importance, vegetation change and some objectives for nature conservation, Biological Conservation, 71, 163-178.
Tracy, M. (1995) The Commission's "Agricultural Strategy Paper": a commentary, Paper presented to the Agricultural Economics Society, London, 13th December.

Professor M. Winter
Countryside and Community Research Unit
Cheltenham and Gloucester College of Higher Education,
Cheltenham Glos. GL50 4AZ.

J.A. Rutherford
The Countryside Commission
John Dower House, Cheltenham, Glos. GL50 3RA.

Dr P Gaskell
Countryside and Community Research Unit
Cheltenham and Gloucester College of Higher Education,
Cheltenham Glos. GL50 4AZ.

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