You hear the Borderway Mart before you see it. Driving out of Carlisle, beyond the roundabouts and small industrial units, you can hear cattle lowing and dragging their chains, and in the car park there are trucks full of bleating sheep arriving at a market that doesn't especially want them. Inside you cannot breathe for the smell of dung: farmers move around, shuffling papers, eating rolls and sausages, drinking coffee from Styrofoam cups. Some of them check advertising boards covered with details of machinery for sale, farm buildings for rent - the day-to-day evidence of farmers selling up. "It could be any of us selling our tractor up there," an old man in a tweed cap muttered at me.
The Tannoy crackled into life. "The sale of five cattle is starting right now in ring number one," the voice said. A black heifer was padding around the ring, its hooves slipping in sawdust and shit, and the man in charge of the gate, whose overalls were similarly caked, regularly patted it on the rump to keep it moving. Farmers in wellington boots and green waxed jackets hung their arms over the bars taking notes. One or two looked more like City businessmen. The heifer was 19 months old and weighed 430kg. The bidding was quick and decisive: the beast went for 79p a kilo.
"If you were here in the prime beef ring six or seven years ago," the auctioneer said later, "you would have seen the farmers getting about 120p per kilo. That is why so many are going out of business. Four years ago, young female sheep would be going for £80-odd, and today they are averaging £30."
Back in his office, the auctioneer took out his book covering the last few years. "Last week, bulls were averaging 82.7p per kilo. Three years ago . . ." He riffled through the pages. "Three years ago the average for bulls was 101.5p, and in October 1995, before BSE, the same bulls were fetching 134.2p. Think about that. There it is. Black and white. You can't argue with those figures. Hellish."
Because of government regulations stemming from the BSE crisis, every cow in Britain now has a passport, which tells where and when it was born, and where it has been since. But despite the seriousness of the attempt to tackle BSE, and the relative healthiness (by EU standards) of the meat on sale here, no one abroad wants British beef any more. Peo ple are always sensitive about meat, and they find it difficult to forget bad news - a fact which is already turning the BSE, swine fever and foot and mouth crises into a full-blown catastrophe, especially in respect of European buyers.
At the moment there are only two abattoirs that export beef. The market is dead. (Before 1996, British beef was generally considered the best in Europe.) Current EU proposals seem set to tackle overproduction by making subsidy payments relate to acreage rather than headcount. "It will result in a reduction in livestock units," the auctioneer said, "and if we don't have the units, it's hopeless for the whole community." The auctioneer was defending his own business, as he should, but why should taxpayers pay subsidies to farmers?
The auctioneer's boss was more strident. "The industry's going under," he said, "and you'll notice something: the common agricultural policy works for the rest of the European Union, but it's not working for us."
"In what ways?" I asked.
"Well, first, the animal welfare rules are more strongly applied here than anywhere, and in this, as in so many areas, British farmers find themselves not on a level playing field. We are not competing on equal ground. The weakness of the euro, with the subsidy payments coming in euros, is a killer;and as well as that, we are still being punished over the BSE crisis. There doesn't seem to be the appreciation in some quarters . . . "
"You mean government?"
"I'm not going to say that . . . Confidence has dropped. This is the largest mart in the UK, and what we see is that volumes are holding up, but costs have gone out of control: increased animal welfare, water usage, effluent handling and passports. Today alone we will be handling 1,500 passports for cattle."
The boss dropped his middle finger ominously on to the table. "Unless there is reinvestment the industry will . . . well, you check your crystal ball," he said. "It is unbelievably serious in the rural community and I don't think people properly appreciate it. It's no longer a north/south divide we have in this country: it's a rural/urban divide. It's easy to work out: after 18 months or more of breeding and feeding and labour, a farmer today is walking home with £339.70 for a good heifer. Nothing." Five months after he said this, many of the farmers weren't even getting that. "Nothing" was the accurate figure; compensation the only hope.
Climbing to Rakefoot Farm outside Keswick, you see nothing but hills and, in the distance, the lakes like patches of silver; teashops and heritage centres and Wordsworth's Walks serve as punctuation on the hills going brown in the afternoon. Will Cockbain was sitting in front of a black range in a cottage built in 1504. "There are ghosts here," he said, "but they're mostly quite friendly."
Cockbain's father bought Rakefoot Farm in 1958, but his family has been working the land around Keswick for hundreds of years. "There are more Cockbains in the local cemetery than anything else," he said, "and they have always been sheep farmers. Sitting here with you now, I can remember the smell of bread coming from that range, years ago, when my grandmother was here."
Cockbain has 1,100 Swaledale sheep and 35 suckler cows on the farm. "Seven thousand pounds is a figure you often hear as an annual earning for full-time farmers round here," he said. "Quite a few are on family credit - though not many will admit it. We farm 2,500 acres, of which we now own just 170, the rest being rented from five different landlords, including the National Trust. The bigger part of our income comes from subsidies we get for environmental work - keeping the stone walls and fences in order, maintaining stock-proof dykes, burning heather, off-wintering trees."
"Can't you make anything from the sheep?" I asked. "No," he said. "We are selling livestock way below the cost of production. Subsidies were introduced in 1947 when there was rationing and food shortages, and the subsidies continued, along with guaranteed prices, and now even the subsidies aren't enough. We've got the lowest ewe premium price we've had for years. In hill farming the income is stuck and the environmental grants are stuck, too. Fuel prices are crippling us. We are in a job that doesn't pay well and we depend on our vehicles. We are responsible for keeping the landscape the way people say they are proud to have it - but who pays for it? The people down the road selling postcards of the Lake District are making much more than the farmers who keep the land so photogenic."
Cockbain was the same size as the chair he was sitting in. Staring into the fire, he waggled his stocking-soled feet, and blew out his lips. "I think Margaret Thatcher saw those guaranteed prices farmers were getting and just hated it," he said. "And now, though it kills me, we may have to face something: there are too many sheep in the economy. Farmers go down to the market every other week and sell one sheep, and then they give 30 or 40 away. They're not worth anything. There are mass sheep graves everywhere now in the United Kingdom." Cockbain laughed and drank his tea. "It's only those with an inbuilt capacity for pain that can stand the farming life nowadays," he said. "I like the life, but you can't keep liking it when you're running against the bank, when things are getting out of control in ways you never dreamed of, relationships falling apart, everything."
On the walls of Cockbain's farm there are dozens of rosettes for prize-winning sheep. A picture of Cockbain's son holding a prize ram hangs beside a grandfather clock made by Simpson of Cockermouth, and an old barometer pointing to Rain. "This is a farming community from way back," Cockbain said, "but they're all getting too old now. Young men with trained dogs are a rarity, and hill farming, of all kinds, needs young legs. We've lost a whole generation to farming. My boys are hanging in there for now, but with, what, £27,000 last year between four men, who could blame them for disappearing?"
Another day, in the tiny kitchen of a hill farm above Bewcastle, 800ft above sea level, a little girl called Louise Carruthers walked to the sink in her blue parka, carrying a jug of water. She smiles and looks like a girl in a Vermeer. "I've made nothing this year," her father, Brian, told me. "I'm on family credit and dependent on family allowance to get from week to week. And I'm working from daylight to dark. I'm trying to encourage my boy not to go into this. One of my friends gave up and now he's working on a building site earning £280 a week."
Carruthers' farm is a confusion of mist and rotting leaves. When I arrived, he slammed the door of his Land Rover shut and tasted the air. "Last year we were buying fuel at 11p a litre, and now it's 22p, and has even been up as high recently as 27p."
Inside the cottage, there is a pair of Massey Ferguson overalls hanging above the Aga and a waxcloth on the table. "You know all the reasons for this," he said, "but people ought to look at the supermarkets: they are really taking the piss. They talk about partnerships and all that but they have the farmers at each other's throats. Forget the landscape, forget the culture, and forget traditions, forget the efforts being made by farmers to produce good quality stuff - most supermarkets will buy from wherever they get the best deal. They don't support the British farmer, although it suits them to say they do. They squeeze everyone."
Couldn't Carruthers diversify? "Oh aye," he said, "they're always talking about diversify. Into what? It's hard to believe the way people plough nowadays. You can't buy into that now, not with those giant agribusiness people, who buy everything and turn it arable. Tenant farmers are no match for those big businesses. Diversify? How else? It's heavy clay land up here, it's wet, there's no tourism, no ponies, no golf."
"So what do farmers do who can't cope?" I asked. "Commit suicide," he replied, "or drive a dumper."
Carruthers is 42 years old. He is separated with two children. His wife left him after beginning an affair with a man she met in the office where she worked. He keeps all his cattle passports in a tin and at one point he held a passport up and said to Louise: "It looks a bit like our family allowance book." They had been watching Who Wants to Be a Millionaire? the previous night, "and this guy lost £125,000 on a question we knew the answer to. It was amazing, wasn't it, Louise?"
Out in the yard I saw some of Carruthers' Galloway cows. It takes three years for these famous animals to mature, but under the new BSE regulations cows have to be slaughtered before their 30th month. Brian patted one of the cows on the way past. "It's going to be a nightmare if they let farming go the same way as mining," he said, "but still, we all vote Conservative up here. The Tories were much better to us."
You could see the Solway Firth 20 miles away. There it was: Scotland and England balanced along a line of blue mist. And it felt as if there was a freeze coming down. Carruthers nudged me with his arm as I left, and he laughed, looking into the wild, unpeopled hills. "If you find me a new wife make sure she's an accountant," he said.
© Andrew O'Hagan. This is an edited version of an article that first appeared in the London Review of Books. The On the farm column will return tomorrow in G2.