Government plans to limit the amount of direct payments received by larger farms will be unveiled as soon as January.
Capping is one of the first changes that will be made after the UK leaves the European Union, said Defra secretary Michael Gove.
A Defra paper to be published next month will detail the means by which the government will introduce the cap, he said.
Some 80% of agricultural support is currently paid on the area of farmland in use, Mr Gove told the House of Commons Environment, Food and Rural Affairs Committee.
“We have said that simply paying people on the size of their land holding is wrong,” he told MPs on Wednesday (20 December).
“We have said that we intend to cap the amount [of money] that goes to people and that we intend to redistribute some of that sum so it is spent on public goods – including on improving productivity and also environmental enhancement.”
Some farmers will still need a form of payment, said Mr Gove.
They include upland hill farmers producing sheep who would continue to need support for several years to come and certainly beyond 2022.
Their needs will be recognised as Defra devises a new farm support system.
The total sum of money that currently goes to farmers, landowners and land managers will continue remain unchanged, Mr Gove added, but he did not say how it would be split.
But he said it is important to spend it more effectively – to obtain public benefits, improve productivity and support farmers in less favoured areas.
Mr Gove said he “hugely” recognised the importance of farmers and acknowledged the importance of having a thriving and productive agricultural sector.
Farmers are food producers first, he said. But they are also stewards of the countryside and a vital part of a healthy rural society.