BRITAIN'S "archaic" tax system fails to recognise the vital role of rural businesses in managing the land, Professor Allan Buckwell told bosses at Kent County Show at Detling, near Maidstone.

The chief economist of the County Land and Business Association (CLA) who went to school in Gillingham and now lives in Whitstable, said running any rural business was a land management activity. But the tax system was "locked in an archaic view that land management and the income from land management is different from other activities".

Speaking at a business breakfast hosted by the Kent branch of the Institute of Directors, he said: "The tax system should recognise custody of the land for positive purposes like biodiversity." Professor Buckwell, who taught at Wye College, near Ashford, for many years, said land management was crucial to a vibrant rural economy.

"The way that land is managed affects the success and desire of all the other businesses," he said. "We want to work in partnership with all organisations that have that common interest in preserving a high standard of land management and the beautfiul landscape of counties such as Kent."

To have a vibrant rural economy, land managers should be given freedom to use their assets as they saw fit rather than be constrained by some "ancient mystical romantic view about what is right to take place in the countryside".

He said agriculture and forestry were in deep trouble because it was impossible to make money out of them. He blamed the strong pound, low commodity markets, BSE and Foot and Mouth Disease. Supermarkets were also squeezing "primary producers", he said.

They were always at the bottom of the pyramid and always suffered when costly new regulations were introduced. The countryside would change if they could not make any profit. "We'll end up with primary producers who have got margins that are so thin they can't survive, and driven to structural change which can't deliver the environment we want."