We will leave the European Union like a drunk tumbling out of a pub at closing time, perhaps with the barman’s boot on our backside. We’ll find ourselves face down on the pavement wondering what just happened. The idea of an orderly, negotiated exit retreats to the margins of possibility: the more likely outcome is chaotic rupture.

No industry will be kicked harder by Brexit than farming. It is uniquely vulnerable for three reasons. Small changes to the amount of goods allowed to enter this country with low trade taxes (a system known as tariff rate quotas) could knock many farmers out of business. There are 86 agricultural products subject to these quotas in the EU, and Britain might have to renegotiate every one of them, in some cases with dozens of other nations. The complexity could be overwhelming.

Without labourers from the EU, fruit and vegetable growers will not get their crops off the fields. As a result of perceived hostility and a weaker pound, migrant farm labour fell by 30% after the referendum last year. If the government ends free movement, many producers will go under.

Most importantly, farmers here have developed a toxic dependency on European subsidies. These now provide, in aggregate, over half their income. It is hard to see how the government could keep paying them in their current form.

Every year €50bn (£43bn) is taken from the pockets of European taxpayers of all stations, and poured disproportionately into the pockets of the very rich. The money is paid by the hectare, so the more land you own, the more cash you are given. In England, the government has refused to limit the money a landowner can receive: some people receive hundreds of thousands of pounds a year in public funds. Social security is capped only for the poor.

Nor are these funds reserved for farming. The government uses this system to keep its members and friends in the style to which they feel entitled. Some of them claim this money for land used to breed racehorses and shoot grouse. David Cameron’s government raised the public subsidy for grouse moors by 86%.

But that is not the worst of it. To claim most farm subsidies, you must keep the land bare: the system amounts to a €50bn perverse incentive for clearing wildlife habitats. Across the European Union, hundreds of thousands of hectares of woods, scrubland, reed beds, ponds and other “ineligible features” have been destroyed for the sole purpose of claiming public money.

The subsidy system sustains the greatest cause of habitat and wildlife destruction in Britain (whose impacts are far wider than all the building that has ever taken place here): sheep grazing on infertile land. Sheep have not so much altered the ecosystem as removed it altogether, stripping most edible plants and much of the soil from the land, leaving nothing of what would once have been a rich mosaic of forest and glade except coarse grass, occasionally interspersed with bracken and bare rock: the only things the sheep can’t eat.

There are no official figures for the amount of land used by sheep in this country, so I commissioned some research of my own. The results are very rough and provisional. (A full survey would take many months and cost thousands.) But they are of this order: the area that is grazed by sheep in Britain is broadly equivalent to our entire arable acreage.

In other words, sheep occupy roughly the same amount of land as is used to grow all the cereals, oilseeds, potatoes, fruit, vegetables and other crops this country produces. Yet lamb and mutton provide just 1.2% of our diet. Nor are they feeding the rest of the world – imports and exports of sheep meat are almost exactly matched. (I explain how these figures are derived on my website.)

In other words, this is an astonishingly profligate use of land. It is hard to think of any industry, anywhere on earth, with a higher ratio of destruction to production. Because it is uneconomic, it depends entirely on European money. It should be a source of enduring shame to Britain’s big conservation groups that, out of sheer cowardice, they refuse to confront this pointless mass erasure of wildlife at public expense.

This spending – £3bn a year in the UK, which is roughly equivalent to the NHS deficit – has been protected only by the fact that our government is not directly responsible for it. As soon as the money appears on national accounts, it will become politically unsustainable. The system has to change. We should ensure it changes for the better.

New Zealand shows how not to do it. When subsidies were suddenly stopped there in 1984, small and medium-sized farms went under, and the government protected the remaining producers by scrapping environmental laws.

It would not be surprising to see this happen here. European measures protecting the natural world, such as the habitats and birds directives, are likely to become zombie legislation in the UK after Brexit, as the institutions required to enforce them will no longer exist. With Andrea Leadsom in charge of farming and Liam Fox in charge of trade, everything could go. Both farmers and conservationists should fiercely resist these outcomes.

The only fair way of resolving this incipient crisis is to continue to provide public money, but only for the delivery of public goods – such as restoring ecosystems, preventing flooding downstream, and bringing children and adults back into contact with the living world. This should be accompanied by rules strong enough to ensure that farmers can no longer pollute our rivers, strip the soil from the land, wipe out pollinators and other wildlife, and destroy the features of the countryside with impunity.

If farmers are to be exposed to market forces, the market should be fair. This means curtailing the power of the chain stores and, where necessary, breaking them up: it is outrageous that farmers receive only 9% of the value of their produce sold in supermarkets.

None of this will be easy; but we could pluck from the wreckage a better system of support for farmers and for the countryside than exists at the moment. It would be hard to think of a worse one.

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• A fully referenced version of this article can be found at monbiot.com. Twitter: @georgemonbiot