Countryside Minister Elliot Morley offered cold comfort to Britain's crisis-hit farmers when he ruled out any further Government cash while on a visit to North Yorkshire.

Mr Morley firmly rejected calls for a major public spending boost to help the farming industry, saying farmers must diversify to survive.

He also risked the wrath of struggling farmers by saying the rural economy was in "good shape."

Speaking at a press conference at Eggborough, near Selby, where he was visiting a wood-fuelled environmentally-friendly power station, his comments further fuelled the escalating row over the Government's refusal to ease the industry's financial crisis.

Mr Morley said the Government's radical vision was designed to redirect agriculture away from production subsidies to schemes which will boost the broader rural economy and advance environmentally-friendly farming.

He said the Government wanted to move away from production-based support, which was costing £3.5 billion a year in addition to an extra £400 million in the last two years to deal with livestock problems.

He said a further £4 billion had been spent on dealing with BSE. These sums of money were huge and unsustainable, and calls for more money would not necessarily solve the problem.

Mr Morley said money should be going into organic farming, energy crops, training, marketing and forestry schemes.

He said: "Commodities are likely to continue to be volatile and command low prices, so there will be support to help farmers adjust to the market more and respond to customer demand."

He said farmers had to embrace new technologies and developments, such as crops for industrial oils and pharmaceuticals, which offered potentially high profits for farmers.

"The choice is theirs, but they have to be business choices. We can't go on giving large subsidies."

Mr Morley further angered farmers when he said that while farming was in crisis, there were a lot of bright spots in rural areas.

He said: "Unemployment is falling faster and there is a higher percentage of small businesses in rural areas. Crime is also lower and health is better than in urban areas."

Mr Morley added: "I have a lot of sympathy for pig farmers. A lot of their problems are not of their own making, but it's illegal just to give them money. We have made £6 million available to advertise the quality of British pork, and seconded a MAFF official to check supermarket labels to make sure mis-labelling is not taking place."

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