The Treasury is set to slash England's farming budget by £100m to help fill a £22 billion hole in public finances left by the last government, according to media reports.
Civil service sources have told The Guardian that ministers were blaming an underspend of £100m a year from the £2.4bn agricultural budget for the cut.
They added that because the previous Conservative government failed to spend the whole pot, it was difficult for the Treasury to justify keeping it at that level.
Chancellor Rachel Reeves has asked all departments, including Defra, to each find more than £1 billion in savings.
Some departments have been ordered to find hundreds of millions of pounds as part of the huge cost-cutting drive.
But the NFU said a cut to England's farming budget would risk further undermining farmer confidence, which was already at rock bottom.
“We have seen a collapse in farmers’ confidence, driven by record inflation, falls in farm income, and unprecedented weather patterns delivering relentless rain this year and a near drought last year," the union's president, Tom Bradshaw, told the paper.
“In opposition the government consistently made clear its commitment to agriculture as a key driver of growth. Now it needs to deliver on that commitment. This government has said food security is national security.
"Now is the time to restore confidence by setting a multi-annual agriculture budget at the level needed to deliver economic growth in all that farming delivers for Britain.”
A recent report by environmental groups urged the new Labour government to 'significantly' boost the agricultural budget in order to meet nature and climate targets.
RSPB, National Trust and the Wildlife Trusts concluded that increasing investment in nature-friendly farming from £2.4bn to £3.1bn a year in England was 'essential' to meet the targets.
As well as environmental goals, the three charities said this would "improve the resilience" of the UK farming industry.
The organisations said: “Climate change and nature loss are the two biggest threats to UK food security and we are already seeing their impacts on food production, including the impact of the incredibly wet year to date.
"We are urging the new UK government and devolved governments to urgently rise to this challenge with more ambitious funding models for nature-friendly farming.
"Farmers must be rewarded for helping nature to recover and tackling climate change, as well as producing food. These issues are deeply interlinked."
A Treasury spokesperson said: “The chancellor has been clear that difficult decisions lie ahead on spending, welfare and tax to fix the foundations of our economy and address the £22bn hole in the public finances left by the last government.”
