Proposed changes to the Common Agricultural Policy (CAP) have created a "minefield" but the outlook for the industry is generally positive.

The suggested reforms raised several questions and offered few solutions as to how they would work in practice, Strutt & Parker land agent George Chichester told more than 150 delegates at the annual Rural Land Briefing organised by the firm in London's Centre Point.

Chichester said there were numerous difficulties involved in the EU proposals which had created "a wonderful muddle, a wonderful minefield".

The stipulation that an entitlements claimant in 2014 will need to have claimed in 2011 in order to be eligible - designed to stop landowners from terminating tenancies in order to take land back "in hand" so they can claim entitlements - was likely to be problematic. The 'golden ticket' concession allowing a claimant to transfer his right to the new Basic Payment, as it is likely to be called, to another farmer was fraught with complications.

Chichester said: "What if the farm is to be sold in multiple lots? Only one purchaser can receive the golden ticket? What if the vendor wants to buy another farm or is only selling one of a number of farms he owns? In this case he needs his golden ticket himself. What happens in the case of a buyer from last summer or autumn, who is a new farmer but did not know what the draft regulations might say when they came out? There are lots and lots of complications here."

He also said there was a lot of "grumbling behind the scenes" about the definition of an Active Farmer and how that might be policed by the Department for Environment, Food and Rural Affairs (Defra). Under the proposals, no payments will be made to applicants whose CAP direct payments are "less than 5% of the total receipts they obtained from non-agricultural activities in the most recent fiscal year". He said it would cause problems for farmers with major diversification ventures or a significant let property portfolio or a traditional estate owner with let land farming parkland in hand or a corporate organisation such as the National Trust of the Co-op. "It is an absolute nonsense to say that these people are not genuine farmers," he said.

Chichester also criticised the "Greening measures" whereby farmers growing arable crops must grow at least three different types of crop, 7% of arable and grassland must be used as an "ecological focus area" and that any farmer with permanent pasture must preserve at least 95% of the area declared as such in the first year of the new regime. Referring particularly to the ecological focus areas, he said: "Not only does this seem a little odd to be taking a substantial land area out of production at a time when the world is running out of food and 15% of the world's population is malnourished but it also gives no credit to those farmers who have already put land into Environmental Stewardship."

However, Chichester added that despite all these complications, CAP reform would ensure ongoing underlying support for another half decade at levels close to those currently prevailing.

He said he "remained bullish" about the prospects for UK agriculture despite "living in volatile times". "The world population is rising rapidly - and they need to be fed. A greater affluence in developing countries will further increase demand for food. The demand for biofuels remains strong. Land area is finite.

"Commodity prices look firm. The London Olympics will consume a lot of meat. Exchange rates are the only real concern."

Also speaking at the conference was Mark McAndrew, Head of Estates and Farms Sales for Strutt & Parker, who said that a two-tier land market would continue to develop in 2012.

"Land values are still rising, but gently. Commercial farms sell well and achieve the highest land values. They are in short supply and offer the best chance of attracting a premium. Residential farms are a mixed picture with lower land values but they are performing better than the purely residential market. Some sales are struggling and they are price sensitive."

He said that the market was driven by a lack of supply, population growth, a loss of agricultural land to residential and industrial development, growing consumer demand from Brazil, Russia, India and China, climate change and a fall in world food supplies.

Stating that 28 of the 76 estates placed on the market in the last three years were commercial arable farms, he said English land values had risen from an average of £5,086 per acre in 2009 and £5,754 in 2010 to £6,922 in 2011. He predicted prices would hit an average of £7,500 per acre this year.

The conference, attended by more than 150 delegates, also heard about the booming Prime Central London market from Strutt & Parker Senior Partner Andy Martin. He said the London Residential sector was largely driven by overseas buyers who thought the city was a safe place in which to invest.

He said that 2011 had ended more strongly than expected with a growth of 14.1% in Prime Central London and the forecast was for continued growth. He added: "They are not saying that about anywhere else."

He said transaction levels in 2010 exceeded the five-year average and two quarters even reached the pre-recession peak of the 2007 average levels. Transactions in every quarter of 2011 were above the 2007 peak average, with overall transactions levels for the year 18% higher than the 2007 peak.

He said a rising number of billionaires and increasing overseas investment were driving the market, within which there was a "relentless demand" for prime sites.

Other speakers included Alexander Creed on the challenges and opportunities presented by renewable energy, John McLarty on the changes to the planning system and buying agents Ian Hepburn and James Geddes, from Strutt & Parker-owned Private Property Search.