A budget designed to fund improvements to Britain's countryside is set to be raided, the BBC has learned.
A plan to use all of England's farm grants to protect the environment is being diluted, the BBC has learned.
Cash will be diverted away from ambitious conservation projects and towards protecting farm businesses.
Currently, farmers get a guaranteed EU grant based on the amount of land they farm.
The government previously promised that the £3bn currently paid to farms under EU agriculture policy would be wholly used to support the environment.
Ministers said that after Brexit they must earn grants by doing things that benefit Nature, like planting forests or capturing flood waters.
Ministers had said that, after Brexit, farmers would have to earn their subsidies.
But those with smaller farms said the new nature-friendly system wouldn't offer them enough to stay in business.
They would secure the funds by undertaking actions such as large-scale forestry or catching flood waters.
So, to the alarm of environmentalists, they've persuaded ministers to create a new scheme rewarding them for simple actions such as conserving soil, or keeping pesticides out of streams.
But many farmers complained that they'd go bust unless the environmental actions were made easier to achieve.
Environmentalists say farmers shouldn't be paid extra for enhancing soil which benefits their business anyway - or for obeying the laws prohibiting water pollution.
The payments would be made under a scheme known as ELMS - the Environmental Land Management Scheme.
But the government has accepted the need for those working on small farms - particularly in the uplands - to be cushioned as the old EU grant system is phased out over the next seven years.
But ministers are drawing up a parallel grants scheme called the Sustainable Farming Incentive to reward farmers for basic activities like conserving their soil.
Environmentalists argue that improving farmland soil makes good business sense and so shouldn't be funded by the taxpayer.
They say that funnelling cash to what are - in their view - easy-to-do actions will divert money from bigger landscape-scale changes such as re-wilding.
But farmers are relieved. They say that, with all the Brexit uncertainty, it's important for them to secure some income without too much difficulty.
How much are farmers being paid?
How much are farmers being paid?
The sums are substantial. Under the EU’s Common Agricultural Policy, farmers are paid public money based on the size of their farms. It tots up to £3bn a year in the UK.
Ministers will replace the EU policy with a new system known as ELMS, the Environmental Land Management Scheme.
Sheep farmers, for instance, get between £5,000 and £25,000 a year each, basically for owning land.
The new system demands "public money for public goods", and it's won applause from people on both sides of the Brexit debate.
Many fear they won't get as much cash under the proposed ELMS "public goods" scheme, which will pay for big-money actions such as planting forests and joining up habitats.
But under pressure from farmers, ministers are now drawing up a parallel easy-to-enter scheme - the Sustainable Farming Incentive (SFI) - to reward farmers for basic activities round the farm such as crop rotation.
So they’ve been lobbying government to make it easier to qualify for grants.
Environmentalists say actions like this are normal good practice and shouldn't be funded by the taxpayer.
In response, a new low-level scheme is now being developed at the environment department, Defra.
They say the easy-to-do actions under the SFI will divert taxpayers' cash from bigger landscape-scale changes such as re-wilding under the more ambitious ELMS.
What is the latest plan?
But farmers are relieved - they say with Brexit uncertainty it's important for them to secure some income without too much difficulty.
The Sustainable Farming Incentive is being designed to run in parallel with ELMS.
It will reward farmers for activities such as boosting soil fertility, and preventing topsoil and fertilisers from running into water courses.
Environmentalists say farmers should carry out these actions anyway, because they’ll make their farms more productive and profitable.
And they point out that firms in other sectors of the economy don’t get subsidised by the taxpayer to stop polluting.
Richard Benwell, from environmental campaign group Wildlife and Countryside Link, has written to the government condemning the proposed lowering of ambition.
He told BBC News: “There’s a real risk that we recreate a scheme for paying farmers for what they would have done anyway. We run the risk of wasting a lot of public money.
“The scheme needs to persuade them to go beyond business as usual - and start to move them towards a more environmentally-efficient farming system for the future.”
What do farmers want?
What do farmers want?
Farmers take a very different view – they’re relieved that the government is looking to find a way of paying them without imposing uncomfortably high hurdles.
Those with small farms take a very different view - they're relieved that the government is looking to find a way of keeping their businesses afloat - for the time being, at least.
Phil Stocker, from the National Sheep Association, told BBC News: “Most livestock businesses have ended up through the years being dependent on support (subsidy). Any change is going to cause a lot of uncertainty.
Phil Stocker from the National Sheep Association told BBC News: "Most livestock businesses have ended up through the years being dependent on support (subsidy). Any change is going to cause a lot of uncertainty.
“We’d like to be paid for really good soil management that protects soil life; for good management that stops nutrients and soil going into water courses; for managing hedgerows and looking after trees. They cost the business, and we know the public love these environments.”
"We'd like to be paid for really good soil management that protects soil life; for good management that stops nutrients and soil going into water courses; for managing hedgerows and looking after trees. They cost the business, and we know the public love these environments."
He was backed by the head of Natural England, Tony Juniper, who told BBC News: “It’s right to have some level of the scheme available to all to contribute something through soil management, water management, maybe trees. These are all things pretty much all farmers can join in with.”
The head of Natural England, Tony Juniper, added: "It's right to have some level of the scheme available to all to contribute something through soil management, water management, maybe trees. These are all things pretty much all farmers can join in with."
Some farmers are also pushing the government to reward them for contributing to secure supplies of food – so-called food security - or for producing artisanal local foods.
Some farmers are also pushing the government to reward them for contributing to secure supplies of food - so-called food security; or for producing artisanal local foods.
What is a 'public good'?
They argue that the public also wants to see small farms stay in business, so this should also be regarded as a public good.
Farmers argue that the public also want to see small farms stay in business, and this should be regarded as a public good.
A debate is bubbling about whether these constitute public goods or not.
A debate is bubbling about whether the kinds of rewards farmers would like can qualify as public goods.
Farmers and campaigners alike agree on the need for urgent decisions from a government preoccupied with Covid-19.
Farmers and campaigners alike agree that devising a robust system without massive cost in administration and monitoring is a task of enormous complexity.
Tom Bradshaw from the farmers' union NFU told BBC News: "We are just lacking clarity now at an incredibly important time in terms of a new trade agreements; Brexit deal; new immigration policy; and (farm grants) transition. There's so much uncertainty in the industry. Farmers can't plan. We desperately need clarity."
They agree on the need for urgent decisions from a department that’s seen staff diverted off the farm brief to work on Covid-19.
A Defra spokesperson said: "The Environmental Land Management scheme will create cleaner, greener landscapes, helping build towards the government's environmental goals and net zero commitments.
Tom Bradshaw from the farmers’ union NFU told BBC News: “We are just lacking clarity now at an incredibly important time in terms of new trade agreements, Brexit deal, new immigration policy, and (farm grants) transition. There’s so much uncertainty in the industry. Farmers can’t plan. We desperately need clarity.”
"As we phase out direct payments ahead of the full roll out in 2024, we will offer financial assistance to help farmers prepare, and invest in ways to improve their productivity and manage the environment sustainably."
