The chancellor Sajid Javid has said farmers can enter the new year with confidence they will be able to “thrive” after Brexit as he confirmed just under £3bn of funding for 2020.

The money – to be spread over two years – will be used to support farmers when the UK leaves the European Union and the Common Agricultural Policy direct payments scheme next year.

The cash will allow funding for direct payments for 2020 to continue at the same level as this year, and supplement the remaining EU funding that farmers will receive for development projects until 2023.

Mr Javid said: “When we leave the EU and are freed from the Common Agricultural Policy, we will be able to support our vital rural communities – who are a cornerstone of life in the UK – with a fairer and less bureaucratic system.

“Farmers can enter the new year with confidence that they have our backing and will be able to thrive after Brexit.”

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The environment secretary Theresa Villiers added: “Outside the EU we will have a simpler, fairer funding system – one that rewards farmers for enhancing our environment and safeguarding our high animal welfare standards.

“We are committed to making sure our rural communities feel the benefits of Brexit and will ensure our farmers get a better deal.”

NFU Scotland’s president Andrew McCornick said: “With us set to leave the European Union and the Common Agricultural Policy on 31 January 2020, it is essential that the farming industry knows where it stands with regards direct payments.

“Farm businesses are dependent upon these payments and, until we see a fairer redistribution of the share of the profit in the supply chain, direct payments will remain important for all farmers and crafters.

“Government commitment to continue to fund direct payments when we leave the EU is welcome.

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“When we meet ministers and MPs in the new year, we will press for a long-term funding commitment for farming and measures that will help farmers secure a fairer share of returns from the supply chain.”