Core parts of the environmental payment scheme due to replace EU farm subsidies after Brexit are still not in place, warned the government's spending watchdog.
Failure to launch the new "environmental land management" (ELM) scheme on time could reduce participation and hit efforts to help nature and the climate, said the National Audit Office (NAO).
The three-tier programme will pay farmers to improve the environment on their land through the Sustainable Farming Incentive (SFI), as well as funding larger Local Nature Recovery and Landscape Recovery schemes.
The scheme, the biggest change in farm policy for a generation, is set to replace land-based EU subsidies being phased out from this year.
But the NAO said Defra has yet to establish clear objectives or detailed delivery plans past March 2022 - increasing the risk to the initial planned roll-out. It also warned the scheme has failed to ensure high levels of participation.
The SFI is being piloted with 1,000 farmers from October, with plans to launch some core elements at larger scale in mid-2022.
Only 2,178 farmers expressed an interest in the pilot, compared with expectations that between 5,000 and 10,000 of 44,000 eligible farmers would come forward, the NAO said.
Gareth Davies, head of the NAO, said: "The success of the ELM scheme depends on securing participation from farmers.
"Defra has not yet set detailed objectives for the scheme and has been slow to provide information on what farmers can expect from it.
"Defra must now develop detailed plans for the scheme's delivery if it is to achieve its intended environmental goals."
The National Farmers' Union (NFU) agreed there were "some significant challenges to overcome" to successfully deliver the SFI roll-out next year and develop the full ELM offer by 2024.
Rob Wise, the NFU’s East Anglia environment adviser, said: "Farmers in the region are still unclear of the upsides and downsides of signing up now. Many in existing schemes cannot sign up anyway and others are reluctant to commit.
"So we definitely needed greater clarity quickly to give farmers the confidence to know if these schemes will be right for them.”
The NAO report says Defra had brought forward the roll-out of SFI to 2022 in order to give farmers an earlier opportunity to replace lost EU subsidy payments, and has reduced some of the risks by reducing its scope.
Environment secretary George Eustice said the government's future agricultural policy "will incentivise sustainable farming practices and reward farmers for the environmental assets on their land".
He added: "The NAO recognises that we have made good progress but we will be addressing some areas where there have been misunderstandings in our full response to the report."
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