Europe is likely to become "the museum of world farming" because of its failure to embrace genetically modified crops, the environment secretary told farmers on Tuesday.

Owen Paterson, a long-standing fan of biotechnology, warned the Oxford Farming Conference: "The longer Europe continues to close its doors to GM, the greater the risk that the rest of the world will bypass us altogether.

"Europe risks becoming the museum of world farming as innovative companies make decisions to invest and develop new technologies in other markets."

Paterson cited a study last June that found "compelling evidence" that GM crops could benefit farmers, consumers, the environment and the economy.

A key test of the appetite for GM produce among EU member states will come this month, when there will be a vote on whether to allow cultivation of a variety of maize that has been made insect-resistant through genetic engineering. If licensed, it would be the first GM food crop authorised for planting by the EU in 15 years, but the proposal faces significant opposition.

Paterson stopped short of urging other member states to vote for the licence, which will not affect UK farmers, but said any decisions must be based on scientific evidence, in contrast to "politically motivated" delays and blocks to GM crops in the past.

"I will continue to make the case for a regime that allows fair market access for products once they have passed Europe's rigorous, independent scientific assessment," he said.

Henry Robinson, president of the Country Land and Business Association, representing rural landlords, said: "While almost no one believes GM is a total solution to food security, it should be available to farmers where evidence shows it is safe and suitable."

But green campaigners said investment in organic farming would be a better bet for environmentally sustainable agriculture. Peter Melchett, policy director of the Soil Association, said: "We are concerned about the immediate prospects for organic food, as the organic market has moved back into growth. The prospects of the UK organic market increasing are being held back by the fact that UK organic farmers get the lowest level of financial support of any EU country."

EU subsidies directed toward organic farmers in other member states amount to £140 per hectare, but in England the figure is about £60 per hectare, according to Melchett. In countries including France, Germany, Italy and Sweden, the subsidy can rise to as much as £250 per hectare.

The environment secretary also said he wanted to see more of the UK's food produced here, while acknowledging that complex rules over labelling could confuse consumers. About a quarter of the food eaten in the UK is imported, but the rules over labelling make it hard for people to judge whether food is truly British.

Food that has been grown or raised elsewhere and then brought to this country for processing, including meat that has been slaughtered or repackaged here, can carry a British label of origin.

Many farmers are bitterly opposed to this ease of relabelling, because British welfare and production standards are often higher than those of other countries, but UK farmers can be undercut by foreign competition on foods that are labelled as coming from the UK when they have really been imported. Consumers can easily be confused by such labels.

Paterson said there was "no single answer" to this conundrum, but that technology could play a part, in allowing food to be more traceable and better labelled.

He did not go into detail on what forms of technology could be used in this regard. However, the horsemeat scandal, in which quantities of horse flesh were found in processed foods labelled as beef, demonstrated the uses of DNA testing.

Paterson also pledged to cut "red tape" on British farmers, in a move he said would save £70m for rural communities and taxpayers over the next decade.

The changes will affect the size of some farms, and the ways in which livestock are moved around the country. For instance, sheep farms will be allowed to cover a greater area, and temporary grazing within ten miles of a farm will no longer have to be explicitly reported. This will allow farmers greater freedom of movement for their livestock within their local area.

Paterson said that farming and food production was one of the most important industries in the UK – the biggest manufacturing sector, worth nearly £100bn and employing about 4 million people. Farming alone contributes £9bn a year to the economy.

He said: "Farming is a cornerstone of our economy but for too long farmers have had to operate within overly complex rules and requirements."

The widespread movement of animals around the country has been blamed for the spread of bovine tuberculosis.

Despite recent reports of the soaring costs of the badger culls, Paterson defended the trials and claimed that the disease would cost taxpayers £1bn in the next decade if strong action was not taken.