They brought in a Bill in Scotland last week to prevent gun dogs having their tails docked. It is the kind of law that governments pass when they haven’t got anything better to do — ignorant, well-meaning, self-defeating.

Anyone with a working dog knows that you cut the tail off when it is a puppy to prevent it being injured later on; a dog charging through the undergrowth with a long wavy tail is more likely to get hurt than one with a trim backside. Parliament was told all about this, but MSPs passed the Bill anyway, because tail-docking sounds cruel. Spaniels will now have to be taken south so that vets can carry out the operation in England instead.

Why are politicians so clueless when it comes to rural matters? Why do they impose regulations that don’t work, using a bureaucracy that can’t implement them? The £300 million fine that the Department for Environment, Food and Rural Affairs (Defra) had to pay to the EU because its single farm payment scheme was so badly handled is the kind of scandal that used to bring ministers down — instead they are promoted, like Margaret Beckett, to be Foreign Secretary. The Rural Payments Agency, which handles agricultural subsidies in England, is so behind with its funding that it has asked farmers not to telephone about their claims — some of them are still waiting for money due to them from 2005. Meanwhile, the bureaucracy expands inexorably: protecting the rural environment in Scotland alone requires two quangos and nearly 2,000 staff, whereas in Norway they do the same job with just 400 people.

The answer, I think, is that the countryside is alien territory to most ministers. Caught between the cumbersome Common Agricultural Policy, with its raft of directives, and an industry that they neither understand nor particularly like, they prefer to control it with red tape rather than listen to real experts, with proper hands-on experience, to explain to them how things actually work.

The latest absurdity — revealed in The Times yesterday — is a case in point. Because farmers are now paid to “manage the environment” rather than produce more food, they have discovered a lucrative sideline in trading their subsidy entitlements. Anyone can buy them. Even if you have never ventured from behind a city desk, all you need is to be classified as a farmer, which you can do through the simple expedient of taking out a lease on less than two acres of land, and holding it for ten months. Armed with the classification you can claim subsidies of anything between £100 and £1,000 an acre per year.

It is becoming big business, particularly in Scotland where the single payment system is more advanced than in England. One dairy farmer near Stirling now earns up to a million pounds a year, quite legally, by trading in milk quotas, which are handed out under an EU compensation scheme. I know of one landowner in the Highlands who rents out his largely unproductive land to “farmers”, who then use it to apply for grants. They never go near the land itself, but make substantial profits from claiming payments on what are known as “naked acres”. Meanwhile, the landowner is making up to £70,000 a year.

This is the ultimate absurdity — a form of “virtual” farming which reduces a once staple industry to a shabby scam. It is worse than that, of course, because it makes a mockery of the new environmentally friendly policy that is meant to govern European agriculture. It gives big farms, which already earn substantial EU grants, the opportunity to expand even further, while offering small farmers an incentive to go out of business altogether. Why try to hang on in a hill farm in Cumberland, for instance, when you can sell your entitlements to a city stockbroker and retire in comfort?

And yet, as most experts who have looked at the future of farming agree, this is the very reverse of what is needed. As oil production peaks, and reducing carbon emissions becomes a key target in the battle against global warming, the demand will be for more local production rather than the long-distance trade in cheap food from abroad that keeps our superstores supplied at present. Neither Gordon Brown nor David Cameron mentioned it when they unveiled their separate green policies this week, but encouraging “localisation” — smaller units, less trucking of long-distance food, more self-sufficiency in farm production — is vital to a successful rural economy and essential if carbon emission targets are to be met.

A recent conference held by the Soil Association heard from a range of experts, all of whom emphasised the dangers for Britain in running down its smaller farms. They called for a radical reduction of fossil fuel inputs to agriculture, less reliance on transport, more production geared to local consumption. Far from recommending empty fields and deserted farms, they envisaged what they termed “reruralisation,” reversing the population drain to towns and cities, and encouraging policies that would entice young people back onto the land. One speaker even suggested that the global energy crisis confronted British agriculture with a challenge as great as any since the Second World War.

Two things are needed to make sense of all this. The first is to press on with reform of the CAP, which everyone agrees is holding farming back. The second is solid, down-to-earth advice from experts who know how farming works, and can see how it might develop over the next few decades. Both mean long-term thinking and both are needed badly, and needed now, before the desiccated decision-making that currently passes for rural policy reduces our farming industry to a piece of slick accountancy.

Times Recommends

• We must lead the world to stability
• The recession's a blessing in disguise
• The guilty men who sent mum to Iceland