Farmers are warning the growing problems affecting Britain's farming industry will force thousands to leave the land.

The National Farmers' Union (NFU) says the government must act now or low incomes, job losses and poor prices will lead to a new crisis in agriculture.

The warning comes on the day an Environmental Agency report shows taxpayers are having to pay millions of pounds each year to rectify damage caused to the environment by farmers.

It says soil erosion, which adds to flooding, and pollution of rivers by fertilisers and farm waste could all be avoided if the government did more to encourage better farming practices.

The big scandal has been that agri-environmental schemes in this country have been underfunded

Ben Gill NFU President

Calls have been made to the Treasury for an extra �500m to be spent on UK farming in the next three years, to make it more competitive.

But the Environment Agency said taxpayers could save that amount annually if farmers took better care of the environment they worked in.

The agency report estimates the annual costs of farming to the environment amount to �1.2bn, offset by benefits of up to �0.9m.

In the short term, it is estimated �331m could be saved per year by adopting simple techniques.

'Progress'

In the long term, savings could amount to about �525m a year, the report says.

Environment Agency president, Baroness Young, told BBC Radio 4's Today programme 27% of all serious water pollution was from farming.

She said: "We are working with the NFU firstly to get an environmental management standard for farmers that will help them take these low-cost and no-cost steps.

A quarter of water pollution is from farming

"Secondly to persuade government that more money needs to go into agri-environmental schemes that will support farmers taking these practical measures to reduce their impact on the environment."

But NFU president Ben Gill, speaking on the same programme, said the figure of �525m was "nebulous" because great improvements had already been made, with 95% of all rivers a fair or good chemical quality.

He added: "That's an enormous step forward from where we were ten years ago."

He demanded more government money for environmental schemes.

Reform

Mr Gill will release figures on what is described as "farming's on-going crisis" later on Tuesday.

In April a leading agricultural expert told the BBC the industry would be facing ruin if �500m was not ploughed in by the government - fast.

Sir Donald Curry said funding was crucial to implement much-needed changes to farming in the wake of last year's foot-and-mouth outbreak.

His report said �500m over three years would be needed for this reform which included shifting from intensive food production towards projects to protect the environment.