Poverty and low-quality services are creating a crisis in the countryside, according to a report out today.

The warning from the New Policy Institute comes as the Prime Minister addresses farmers at their annual conference and just before he begins a tour of the South West of England scheduled for the end of the week.

Tony Blair is expected to use the tour as an opportunity to underline the Government's record in rural areas.

He has already angered farmers by calling on the agricultural industry to modernise and embrace technology such as the Internet rather than relying on further State subsidies.

The New Policy Institute's document, Changing Views of Rural Britain, says deprivation can often be as bad in rural areas as it is in the inner city areas.

It suggests that, in most country areas, at least one in 10 people lives below the poverty line, and there are significant barriers to the essential services which city dwellers take for granted.

The institute says the combination of low incomes and lack of access to services means the experience of poverty in country areas can be worse than in cities.

Institute director Peter Kenway said: "When the Prime Minister visits the South West, he may be presented with a picture of rural bliss, much as Catherine the Great saw only model Potemkin villages specially built on the riverbank as she cruised down the Dnieper river.

"But behind the idyllic scenery, the truth is very different."

Mr Kenway added: "Our report shows that there is a real crisis of social exclusion in the countryside. Poverty is combined with lack of access to services that are essential for a decent standard of life."

Ian Strong, director of the York-based Yorkshire Rural Community Council, said: "We would agree that the experience of deprivation and poverty can be worse in rural areas than in cities.

"Much of the poverty is hidden amongst relative affluence and people with problems are frequently very much in the minority."

Mr Strong said services such as shops and post offices were really significant to those without their own transport.

"If you have a car, there is no real problem. But to those unable to afford a car, it becomes part of a vicious circle. Lack of use undermines the shop, and it may eventually close."

He said: "Ironically, the Government's own policies are also undermining post offices by seeking to pay benefits, including pensions, direct into banks."

Mr Strong said some people still did not have bank accounts; shops would lose out where cash received in the form of benefits was once spent locally; and villages would also be hit.

"Village services are also a social thing - without them, there is a real reduction in social interaction".

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