The government said farmers in England would be paid more public money to protect the environment and produce more sustainable food.
It is hoped that the increase in payout rates will encourage more farmers to enroll in new environmental land management schemes (ELMS).
The ELMS is designed to replace the EU’s common agricultural policy (CAP).
The farmer’s union (NFU) welcomed the increase, but warned it might be “too late” in the economic climate.
The Department of Environment, Food and Rural Affairs (Defra) said the new system will “put money in the pockets of farmers” while improving nature and promoting innovation in agriculture.
The announcement came amid increases in food production costs that hit farmers the most, particularly from increases in animal feed, fertilizer and fuel costs.
The increased rates under the ELMS will come from existing money reallocated from previous direct payment subsidies to farmers under the EU scheme.
NFU vice president David Exwood said it was still unclear how much would actually be paid under the ELMS to farmers who would lose their direct payments.
“While some of these recent changes are welcome, they risk being too late, especially given the current economic challenges we are experiencing and the rapid erosion of direct payments.”
Concerns were raised earlier that the new eco-friendly payment system would not offer smaller farms enough to keep their business.
Now, 30,000 farmers enrolling in an expanded rural management plan under the ELMS will see an average 10% increase in money they receive for ongoing environmental work such as habitat management.
Larger, one-time green plans like fencing will see an average payout increase of 48%.
As part of ELMS’ sustainable farming promotion, an additional £1,000 per year will be provided to help smaller businesses, including tenant farmers, cover the administrative costs of participation.
But the focus on smaller plans has been met with caution by environmental and conservation groups, who have previously expressed concerns about the government’s commitment to ELMS.
Harry Bowell, the organization’s director of land and nature, worries that money will come from more ambitious environmental projects.
“The risk is that a large part of the overall budget will be spent on attracting farmers to the sustainable agriculture incentive scheme, at the expense of more flexible measures and plans.”
Tim Field, who leads 120 farms across the Cotswolds and is currently piloting a larger-scale landscape improvement plan under the ELMS, said he welcomes any help smaller farms can take on their environmental work.
However, he added that more needs to be done to support domestic food production.
“Public money is crucial to making food and farming ecosystem services regenerative, not destructive.
“However, cheap imports produced to lower standards continue to undermine the price of home-grown sustainably produced food, and this pumped public money will be insufficient to cover the price discrepancy at the farm gate,” he said.
The rate increase was announced by agriculture minister Mark Spencer at the Oxford Agriculture Conference on Thursday.
“As the custodian of more than 70% of our rural area, the nation relies on its farmers to produce the high-quality food we know as well as protect our nature, and we are increasing our payouts to ensure that farmers are better off not out-of-pocket to do what is right by the environment”.
A Defra spokesperson added that the plans will help the UK meet its legally binding environmental goals and the goal of stopping biodiversity decline by 2030, while “supporting the industry to grow more indigenous crops”.
Before the ELMS, under the EU’s CAP system, farmers received subsidies based on the amount of land they owned, meaning larger landholders benefited most.
The new system is phased in until 2027/28 and more details on the environmental work payable will be announced at the end of the month.
Agricultural policy in the UK is a delegated responsibility and each country implements its own subsidy schemes.