The government is proposing that farmers who retire are given the option to take a lump sum instead of Direct Payments.

It is also proposing to delink Direct Payments from the land for all farmers, meaning that the recipients will no longer have to farm the land to receive the payments.

Defra has launched a consultation that will run for 12 weeks.

Environment Secretary George Eustice said: "For farmers, home is more than just the house they live in. In many cases land has been in the same family for generations. Herds of cattle or flocks of sheep have genetic lines running back generations. For all of these reasons, the decision to retire or to exit the industry can be the most difficult of decisions, and is frequently postponed.

"The generational nature of farming also means that a younger generation often feels a great sense of duty to carry on the family tradition, but that might not be right for all.

"At the other end of the spectrum are a completely different set of people. Those who yearn to go farming but cannot afford to enter the industry nor get access to land.

"This consultation sets out to address these twin challenges.

"Our proposal is to offer farmers who want to exit the industry a one-off lump sum payment to surrender their BPS entitlements and then either rent out, sell their land or transfer it by gift if they are an owner occupier, or surrender their tenancy if they are on tenanted land.

"We believe that offering a lump sum will help those who wish to retire or leave the industry to do so in a planned and managed way.

"This will make more space for the next generation of farmers, as well as providing opportunities for existing farmers who wish to expand to improve their profitability.

"This should help bring additional fresh thinking into the industry, helping to support an innovative and vibrant farming sector and boost overall farm productivity."

Farming organisations are encouraging farmers to contribute to the consultation which can be found here.

NFU vice president Tom Bradshaw said: “As our agricultural support is overhauled, farm businesses across the country will be making life-changing decisions about the future of their farm or tenancy. We want to see a fair transition which allows farmers who are considering leaving the industry to have sufficient time and information to make those significant decisions.

“Of course, any discussion around people exiting the industry must be coupled with how we attract new people into agriculture."

RABDF chairman Peter Alvis said: “The government is trying to co-design a system with the industry that will meet the needs of those retiring and also encourage new entrants into the industry, something that is desperately needed."

CLA president Mark Bridgeman said: "The scheme will not be for everyone, but if the scheme is to contribute to industry restructuring and create opportunities for new entrants and those wishing to expand, there are some critical issues to be addressed – including clarity on tax treatment of lump sums payments, and the eligibility and exit conditions.

"The biggest challenge is the timing, and there can be no further delays in launching the scheme later this year.”