Farmers could be offered exit payments of up to £100,000 to help them leave the industry as part of a government drive to attract "new talent" onto the fields.
Defra has launched a 12-week consultation on how it will support farmers through the post-Brexit transition period between now and 2027.
During that time, the EU's system of land-based subsidies, currently paid through the Basic Payment Scheme (BPS), will be phased out and replaced with a new system of environmental incentives.
As part of the process, Defra proposes to pay farmers part of their BPS entitlement in advance, to help those who are finding it difficult to retire or leave the industry for financial reasons - thus creating opportunities to bring new blood into the industry.
Eligible farmers would lose their BPS entitlements and would have to sell or rent out their land, or surrender their tenancy - although they will be able to keep their dwelling and up to 5pc of their agricultural land.
In return, they would be offered a lump sum worth 2.35 times their annual BPS payment - meaning a farmer currently receiving the average BPS payment of £21,375 per year would get a lump sum of £50,231.
That payment would be capped at a maximum of £100,000.
Environment secretary George Eustice said it would "help an older generation retire with dignity", while a New Entrant Scheme currently being developed with industry leaders, councils and landowners would create opportunities for new farmers from 2022.
Jamie Lockhart, Norfolk branch chairman of the National Farmers' Union (NFU), broadly welcomed the idea but said "the devil will be in the detail".
"It would appear to be more aimed at tenant farmers who would like to exit the industry, but have not been able to make provisions for retirement because of how tight the margins have been in farming," he said. "If this mechanism allows that transition to happen fairly, it seems like a sound arrangement.
"My concern is that all tenancy agreements are worded slightly differently and some will state that any money coming from support payments must go to the active farmer or the landlord.
"The other point is around the new entrants scheme. If the support payment has gone to the exiting farmer, it could put new entrants, despite all their enthusiasm and ideas, on an uneven playing field for those important first few years against a neighbour still getting some kind of support.
"So there is a lot more detail needed, but the sentiment should be applauded. It is fresh thinking on how to lower the average age of farmers and create new opportunities for people to come into the industry."
- The Defra consultation will close on August 11.
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