I F all the opportunities are taken, Westcountry agriculture can become more efficient and profitable during the next 10 years, to the benefit of all involved.

That was the upbeat forecast delivered by the team from Anderson, the national farm business consultants, to an audience of farming professionals and companies working in agriculture on a visit to the South West on Friday.

At the seminar at Exeter Racecourse, the 35 guests were told there was scope for limited additional production, the decline in dairy and pig production should be reversed – and renewable energy would provide an important new income stream for farmers.

Total support from the Common Agricultural Policy was likely to reduce after its present life-span ended in 2013, though.

Speaking about farming's profits and capital, Francis Mordaunt, head of Anderson's research team, said income from farming needed to be £4 billion nationally for farmers realistically to invest to any real extent – otherwise there was no real incentive.

"Output prices in most sectors have been helped by the weakening of sterling over the past two years. But the sobering fact is that without subsidy, UK farming has been usually loss-making," he said.

Farming had been bailed out by direct subsidies and a small amount of Pillar Two agri-environment support and diversification – holiday lettings, bed and breakfast and equestrian enterprises.

Borrowing, though, had seen a turnaround, with the Rural Payments Agency getting out the bulk of the Single Farm Payments on time.

Interest rates had been left at 0.5 per cent, and even though lending rates over base rate had risen, it was still very cheap borrowing.

So there was a lot of new investment, funding higher working capital. Unlike the rest of industry, farming has had its credit limit extended, seen as a good risk by the banks.

But farmers had to put forward a decent proposition, said Mr Mordaunt.

He forecast that weak sterling was likely to continue for some time, a situation that traditionally had been good for farming. While fertiliser costs had dropped, they were still significantly higher than before the recession.

Looking forward, he said, there would be more policy changes within the next two years – but at least there had been a total change of attitude towards farming from the present Government.

Defra Secretary Hilary Benn's statement at the Oxford Farming Conference this year, that food security could not be taken for granted any more, was the nearest to an admission that the Government had got it wrong in the past.

And the long-awaited appointment of a retail trade ombudsman was a positive move forward, giving farmers a fairer chance to see a profit margin.

However, there was still no lessening of regulation, and the RPA was also being very slow at completing the new Rural Land Register for all farmers receiving payments under the CAP.

There was a danger it would not be completed in time for the 2010 Single Payment Scheme applications and ELS renewals.

Also the onus was on individual farmers to check whether it was correct, a situation that was "pretty iniquitous", he said.

So far as this year's SFP was concerned, many farmers failed on inspections by not having completed the forms in the Soil Protection Review booklet.

So far as the new Nitrate Vulnerable Zone rules were concerned, there were problems with cross-compliance and grazing licences.

Under a tenancy, the responsibility clearly lay with the tenant – so it was important to have written agreements; handshake deals were dangerous, Mr Mordaunt stressed.

On the Uplands Entry Level Scheme, which replaces the Hill Farm Allowance next year, he warned that farmers still tied into other support schemes must also claim on the new allowance, or lose out.

A White Paper on the future of the CAP could be expected in the autumn, he said, but the direction would be changed, with the European Parliament now having equal co-decision powers with the European Commission.

But it would have to be a comprehensive forecast, not least to give farmers a chance to plan plantings in 2012.

The SFP was likely to last until 2020, though there was also likely to be a redistribution to help new Member States, and a flat rate payment basis on an average area would be adopted.