WHAT does a farmer do with a large empty house on the side of a busy road? Open a gourmet shop of course. That's what Paul Barkes and his wife Jo have just done with Thorpe Farm Peel House on the A66 near Greta Bridge, making it one of the more unusual delicatessens and coffee shops you're likely to encounter. And one of the nicest.

Peel House looks very grand. Designed by Thomas Robinson, who also did nearby Rokeby Park, it's been in the family since the 1930s, but is now surplus to requirements.

"Because it's such a lovely building, it's a great responsibility and we wanted to do something special with it," says Paul, who grew up in the house but now lives next door with his family, while still running the family farm.

"Farmers tend to look on the gloomy side," says Paul, with good reason - he keeps pigs and the price had fallen yet again last week - "But these have been really bad times and we all have to diversify. But I wanted to do something positive."

For a start, he wants people to begin thinking about the food they eat. The shop sells their own bacon, ham and sausages and much of the stock is the pick of local produce - Brymor ice cream from Masham, Jenkins and Husthwaite cakes from Bishop Auckland, Lanchester apple juice, Rosebud jams from Healey, Biscuits by Mrs Pilcher from Barney. There are local cheeses and vegetables too.

But there is also a wide range of unusual pates, pickles, chutneys, fruit juices, as well as their own range of bread, cakes and ready meals made in their own kitchens - which also supply the coffee shop with quiches, pies and some seriously tempting cakes.

They opened in June, but already have a steady stream of customers, with a mix of locals and passers-by. At the back of the house is a big picnic area and playground where the children can let off steam. There are old farm buildings too that Paul has plans for - craft workshops, perhaps.

Meanwhile, back in the house, there are some upstairs rooms, renovated and furnished about to be turned into an information centre and a meeting room. A small lawn separates the house from the A66. You can watch the traffic, but hardly hear it.

"I'm hoping groups will come and use these rooms, for meetings or just lunch parties and we can provide the home-baking from the kitchens. We want to make as much use of the kitchens as possible."

As well as the coffee shop, the kitchen's busy making the ready meals for sale and have already provided picnics for people off for a day at the races.

"There are all sorts of possibilities and we're open to ideas, to see what will work," he says.

For a farmer, a notoriously solitary breed, Paul is enjoying the chance of meeting people, talking to them, explaining his plans, asking customers their opinion, devising questionnaires.

"Jo is more behind the scenes, in charge of the finances. But I like talking to all these people. It's a change for me and I'm really enjoying it."

Judging by the reaction of customers in the shop, so are they.

* Thorpe Farm Peel House, A66, near Greta Bridge, Barnard Castle Tel: (01833) 627242. Open Mon-Sat 8am to 5pm; Sunday 10am to 5pm. Check if travelling far. There are now two big farm shops on theA66. Mainsgill is near Scotch Corner and best accessed while travelling west. Thorpe Farm Peel House is near Greta Bridge and best accessed while travelling east.