A £200m DEFRA scheme to encourage farmers into organic farming has not offered taxpayers value for money, according to the government’s finance watchdog.

The National Audit Office said the Organic Entry Level Scheme, set up to reward organic farmers for protecting the environment and the landscape, had not given the environmental benefits DEFRA had claimed it would give.

In a report published on Tuesday (30 March), the NAO said forecasts for the impacts of the scheme, which is overseen by DEFRA and run by Natural England and the Rural Payments Agency, were “over optimistic”.

While the scheme was likely to have benefitted organic farmers and had a positive impact on the environment, its achievements could be increased, it added.

Under OELS, which is funded by both the EU and UK taxpayers, farmers can choose which environmental measures to implement.

The NAO said this meant farmers rarely chose to implement challenging options, with 57% choosing measures that involved features already in place on their farm.

While DEFRA was taking steps to improve the environmental benefits of the scheme, OELS benefitted larger beef and dairy farms, meaning there was a risk EU funds were not being utilised.

The report also criticised Natural England’s costs in administering the scheme, despite it cutting the amount of time it took to process applications and farmers being happy with the quality of service they received.

Amyas Morse, head of the NAO, said DEFRA needed to get better at putting “credible measurement arrangements” in place to demonstrate money was being used properly.

“It appears that DEFRA’s scheme helped to deliver environmental benefits by encouraging organic farming, but we can’t draw a similar conclusion on the land management measures,” he said.

“I would have expected a greater environmental benefit for the taxpayer’s funding contribution.”

A DEFRA spokeswoman said the department was pleased the successes of the organic agri-environment scheme had been recognised, but was disappointed the NAO did not fully recognise those successes provided value for money.

“Their own survey assessed the environmental benefits as positive,” she said.

“We recognise the concern that EU funds could remain unused – that is why we manage the funds as part of the total programme to maximise the benefits across a number of environmental and rural development schemes.”