Michael Gove will set out proposals to replace EU farming subsidies with new incentives to reward landowners for environmentally friendly practices after Brexit.

The Environment Secretary plans to scrap the much-criticised Common Agricultural Policy (CAP) in favour of subsidies for farmers who try to enhance the natural environment by planting woods, creating wildflower meadows and providing habitats for wildlife.

In a speech at the Oxford Farming Conference, he is expected to say: “I want to develop a new method of providing financial support for farmers which moves away from subsidies for inefficiency to public money for public goods.”

Warning that the CAP is “fundamentally flawed by design”, Mr Gove will outline a major shake-up in how farmers receive funding, where they will bid for cash based on environmental benefits delivered on their land.

He will tell delegates: “Paying landowners for the amount of agricultural land they have is unjust, inefficient and drives perverse outcomes.

“It gives the most from the public purse to those who have the most private wealth.”

The Cabinet minister will add: “We will design a scheme accessible to almost any land owner or manager who wishes to enhance the natural environment by planting woodland, providing new habitats for wildlife, increasing biodiversity, contributing to improved water quality and returning cultivated land to wildflower meadows or other more natural states.”

The new proposals – which will be published later this year – will also offer additional funds to farmers who collaborate to make environmental changes at a “landscape scale”. It is understood that farmers will be given five years to prepare for the changes after Brexit.

Mr Gove has surprised green campaigners with his energetic push to tackle environmental issues in recent months, including plans to ban sales of ivory and plastic microbeads, to outlaw new petrol and diesel cars by 2040 and a deposit scheme for drinks bottles and cans.

His intervention comes as cross-party MPs warned that trade deals after Brexit could pose the “biggest peacetime threat” to the UK’s food security if standards and farmers are not protected.

A report by the All-Party Parliamentary Group on Agroecology warned the Government must ensure future trade deals protect British farmers and do not undermine them by allowing imports of food produced with lower welfare or environmental standards.

Labour chairwoman Kerry McCarthy, said: “There are serious concerns that if negotiators don’t value farmers enough and build poorly managed trade deals that reflect this – particularly a US-UK deal – it could trigger a race to the bottom in terms of standards and ability of our own farmers to compete.

Brexit: the deciders Show all 8 1 /8 Brexit: the deciders Brexit: the deciders European Union's chief Brexit negotiator, Michel Barnier Getty Brexit: the deciders French President Emmanuel Macron Getty Brexit: the deciders German Chancellor Angela Merkel Reuters Brexit: the deciders Commission President Jean-Claude Juncker EPA Brexit: the deciders The European Parliament's chief Brexit negotiator Guy Verhofstadt Getty Brexit: the deciders Britain's Prime Minister Theresa May Getty Images Brexit: the deciders Britain's Chancellor of the Exchequer, Philip Hammond PA Brexit: the deciders After the first and second appointed Brexit secretaries resigned (David Davis and Dominic Raab respectively), Stephen Barclay is currently heading up the position PA

“The APPG is determined this sector should not become a bargaining chip or something that can easily be traded.”