Sounds like a massive subsidy for hill sheep farmers and won't touch the sides for a spud grower for example.
Environmentally which is more damaging and which one is more profitable. If we are going on the environmental heroism as the reason for the removal of fuel rebates then encouraging farms to use less or no fuel is a winner.
Spuds are particularly soil destructive these days with a focus on elimination of stone to reduce the required numbers of expensive pickers...... You didn't completely destone fields pre war.
Personally I think it would solve all the issues. It even solves the contractor issue as although they need to put rates up the farmers rebate will contribute.
The only thing you would need is a iron fist proving the land is still in productive use..... But we already have that type of monitoring for setaside..