Like Melanie Reid, writing in these pages yesterday, I have a local herd of cows with whom I frequently share social intercourse. In my case, however, it tends to be limited to: “Now why don’t you just shift your butt over there, then I will be able to get through that gate.” As for lessons in the economics of global food production I tend to look elsewhere.

It is quite true that cattle farmers have had a hard time of it over the past few years; many have given up their farms and huge numbers feel cruelly unrewarded for their hard work. But the current upheavals in agriculture, which are now rewarding farmers who clung on to their farms with higher prices, are not the fault of the retail food industry and supermarkets. They bear the indelible mark of central planners in Whitehall and Brussels.

Farmers have a point in that supermarkets have been merciless in negotiating prices of milk. But they could only get away with this because of the glut in production caused by the Common Agricultural Policy. Some of the dairy farms that have gone under in recent years should really have been allowed to founder decades ago, but have been propped up artificially by subsidies that insulated farmers from market forces, and led to huge gluts – remember the EU butter mountain?

The fall in milk prices at the beginning of this century was not ultimately due to the supermarkets but down to increased production at a time when consumers wanted to buy less milk. Between 1996 and 1999 the output of cattle in the UK rose from 13,975 million litres to 14,580 million litres – prompting the milk prices to fall from 25p to 17p a litre. Since then, a shake-out of cattle farms has brought milk production (in 2006) back down to 13,938 million litres, with the result that prices have climbed back towards 25p a litre.

These figures hardly paint a picture of an agricultural wasteland created by short-sightedness and greed: rather it is a correction in the marketplace caused by a period of overproduction. Now, after a period of retrenchment, higher prices will encourage production to rise once again. This kind of process occurs in every industry from time to time but, for reasons that may have something to do with nostalgia and sentimentality towards animals, it becomes a much more emotive issue when it happens in agriculture.

We are quick to declare the death of British farming every time a tearful figure in tweeds is forced to auction the contents of his milking parlour. Yet for every farmer who has gone out of business over the past few years, another has been investing in better machinery and better animals. Over the past decade the average milk yield per cow has risen from 5,500 litres to 6,800 litres, enabling the same quantity of milk to be produced from many fewer cattle: the number of cattle fell from 11.8 million in the mid 1990s to 10.2 million today.

Quite what the effect is on a cow’s mind and body of being treated ever more like a walking milk dispenser I will leave to animal behaviourists and philosophers, but no one can say that successful farmers are not, like the supermarkets, accused of trying to drive them to ruin, indulging in efforts to squeeze the producer and so increase their own profit margins. That is how business works.

It is sometimes asserted that farming isn’t just another business: that food production is somehow too important to be left to the marketplace. Yet if there is a strategic case for state intervention in agriculture we are hardly at the point of crisis. Even with the recent fall in the number of farm animals, we still have a cow for every six Britons, a sheep for every two Britons, a pig for every ten Britons – not to mention three chickens each.

A national flock of 34 million sheep hardly represents what Reid described as “the tipping point for breeding stock”. The population of Indian tigers is down to 1,300, and naturalists have far from given up on them. Were international crisis to force us to increase native food production, it wouldn’t take long to breed extra stock: just look how quickly the hills came alive with sheep and cattle after the foot-and-mouth outbreak of 2001.

Barring a repeat of the Second World War, the risk of a repeat of circumstances requiring the country to “dig for victory” is remote. It is a common conceit that that a globalised agricultural industry somehow makes us more vulnerable to food shortages. The opposite is true. It is when we all relied upon locally produced food that we faced starvation as a result of a failed harvest. So too the African famines of 1970s have greatly diminished (save for in war zones and Zimbabwe, where Robert Mugabe seems to have an active policy of trying to destroy the economy). Nowadays, when a harvest fails in one part of the world it is a dire problem for the farmers and an irritation for local consumers who will face higher prices; but few will go hungry.

Anyone who fears world markets every time they open the larder door hasn’t cottoned on to the robustness of global trade. Without subsidies and tariff barriers it would be even more robust. The reform of the Common Agricultural Policy in 2003, which decoupled subsidies from food production, is some kind of start – even if it has led to the bizarre practice of forcing taxpayers to fund gentlemen farmers to do nothing. If there is one bovine-brained herd we could do without it is central planners.

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