How often has it been said that England lost part of its charm when rural life started to change, younger people found work away from the farming communities and the economic landscape of the countryside changed irreversibly?

Up until the first half of the 20th century, villages were almost self-sustaining with small shops serving the population’s needs and in turn supporting farmers and producers, so everyone benefited.

That circle of life was broken by a combination of circumstances and the effects continue to be felt with the ongoing closure of pubs and post offices.

But there are still villages that retain at least some elements of traditional business. Steventon, near Abingdon, is a good example with its pubs, shops and, perhaps most unusually, The Old Farmhouse Bakery.

Set near the heart of the village, it has been run by the Bitmead family since 1982, just when rural decline was starting to gather speed.

But rather than become another statistic, it has thrived, led to the opening of a craft shop known as The Gallery, and recently picked up the Best Rural Enterprise category in the South of England heat of the Countryside Alliance Awards.

However, the business grew out changing circumstances for the agricultural community and, having spent two years in Canada where the practice was more advanced, Rodney and Kate Bitmead recognised the need to diversify on their farm.

Mrs Bitmead said: “We were a bit ahead of our time and had a battle with the planners to set up the bakery. This was breaking new ground before anyone had an incentive to do it, and what we were doing was frowned upon.”

With a keen interest in baking and motivated by the fact that the village’s bakery had closed, leaving nowhere for locals to buy decent bread, Mrs Bitmead decided to take the plunge.

“There was a gap in the market — people liked their bread and I decided to do something about it.”

The old oven was transferred to the Bitmead’s farm brick by brick, and traditional bread was baked once more. Mrs Bitmead has never looked back because she concentrates on quality, rather than quantity. And the old principle of one local business supporting another is just as relevant today as it has ever been.

Most of the money spent in the bakery is channelled back into the Oxfordshire community. About 90 per cent of the flour used is sourced from Oxfordshire mills, including FWP Matthews at Shipton under Wychwood, while the oil and eggs are also sourced locally.

In 2001 she was joined by daughter Beccie, who decided to return home after working at director level in marketing and public relations in London and, while she works all hours now, she would not return to the pressures of city life.

In 2007, the Bitmeads converted another building on their farm into what is now known as The Gallery. This is a gift shop specialising in stocking 120 British producers, many of them tiny companies, often, like the Bitmeads, from farming families diversifying into rural crafts.

The Gallery is displayed like a real home with seven rooms filled with fabrics, furniture, art and decorations.

Mrs Bitmead said: “There are so many British producers who are not expensive. I know every single one of our suppliers by name, along with their families.”

Mother and daughter sourced their stockists through the conventional trade show route, and also by travelling around the country and calling in at micro-businesses advertising on the roadside.

Beccie Bitmead said: “Our only criteria is that we have to love it ourselves. If we don’t, then it is really difficult to be enthusiastic about it.”

And the recession has not affected the businesses — in fact Mrs Bitmead believes demand is increasing as a result of it.

“For example, in the Bakery, people are eating out less but still want to eat good food and are more conscious of their health, going back to their roots, without the need to go out and spend a lot of money.”

Now, as well as their own thriving businesses, the Bitmeads have converted buildings on their premises to allow other companies — the Tiny Toes nursery and the Framing Centre — space to establish themselves.

Again, both are family businesses and help make up a village micro-economy that, with a little imagination, hard work and plenty of enthusiasm, can work just as well today as it ever has done.