SUPERMARKETS were running out of steam, having squeezed the lemon dry, Lord Haskins, former chairman of Northern Foods, told the conference.

They were running out of ideas and leaving the door open to risk takers, and companies were expanding into other markets, such as car insurance.

He predicted: "In ten years' time Tesco will be a warehouse where entrepreneurs can go to sell their goods. They have squeezed the lemon until there is nothing left."

"There are more people wanting to buy local produce from their local store with local producers' names on the packets," he said, adding that food was more affordable than 40 years ago, with a much wider range available.

More women worked; people wanted ready-prepared meals and used microwaves and fast food retail outlets. "But food in Britain is remarkably safe, compared with the rest of the world, despite BSE and Edwina Currie and the eggs," he said.

The big stores dominated the industry and the way they marketed their food had a questionable impact on the environment. He pointed out that niche and ethical markets were remarkably successful.

Supermarkets were going to be less sure about where milk and grain came from, and the bargaining position of farmers would strengthen, with stores committing themselves to longer contracts.

On GM crops, he said there were some serious environmental issues but, in the food chain, he saw it as a benefit rather than a risk. "When we enter the GM food market and start producing food that tastes better and is significantly cheaper, you will see the argument change very rapidly," he said. "Now GM is already a global reality, we should manage it."

He claimed one of the biggest problems with British farming was a labour shortage. "British workers are not prepared to pick fruit in Kent or clear vegetables in Lincolnshire. So we get dodgy characters coming in illegally. We need to legalise and train a migrant force to work on farms."

Climate change was another factor already becoming apparent and was "a much greater danger to the world than terrorism", he reminded his audience.

Prof Janet Bainbridge, chairman of the Scientific Advisory Committee on Genetic Manipulation, said undisputed advantages came from that type of technology, but there were still issues about public understanding.

"I would say that, in five years' time, we will go into supermarkets, not just to buy food that is organic or not," she said. GM would be found increasingly in standard foods.

"People will still be able buy organic, and there will be validated non-GM foods, which won't be available to everyone because I believe there will be a very high price on it," said Prof Bainbridge.

People needed to be given a better understanding of science, in a user friendly way.

Kath Toward, of Herdship Farm in Upper Teesdale, described how, last year, the farm won the David Arnold Foster Hill Farming Award, and came third in the Silver Lapwing Award, for its partnership work in looking after the flora, fauna and the landscape.