Farmers considering ploughing out permanent pasture risk losing out on their single farm payment unless they ensure they are not breaching conservation rules.

Current proposals to reform the Common Agricultural Policy set out plans to force farmers to retain grassland which is more than five years old by 2014.

In an effort to avoid penalties, some farmers are already making plans to cultivate pasture land.

But Tony Hargreaves of rural consultant Brown and Co said farmers needed to think carefully before they took action to avoid facing stiff financial penalties.

“There’s an element of panic out there,” he said. “People think they must get rid of grassland or they will be stuck with it if the current CAP proposals go ahead.

“But it’s important not to go out there and rip things up – both from a conservation and regulation side.”

Mr Hargreaves said cultivating land could breach Environmental Impact Assessments rules imposed by Natural England on protecting ecologically-important grassland, putting farmers’ single farm payments at risk.

Those who breach the rules may be forced to re-install the habitats at considerable cost, he said.

EIAs cover areas of land larger than 2ha that have not been cultivated in 15 years or are defied as semi-natural, including species-rich hay meadow, scrub, moorland and heathland.

Any work which increased the productivity of such land – not just ploughing or cultivation – was banned, Mr Hargreaves added.

“If in doubt, seek advice. Most people are being sensible, but it’s worth waiting before you react.

“We have another two years before the rules would come in, so you ca hold off until at least the end of this year before you take action.”

Mr Hargreaves’s comments came as the Grasslands Trust said it wanted DEFRA to carry out a grassland inventory to pinpoint the exact location of semi-natural grasslands.

Miles King, the trust’s director of conservation, said many farmers might not be aware of the ecological importance of their grassland.

“We want to work with the farming community so this important landscape can be conserved and targeted for agri-environment support,” he added.