The CLA today (31 October) said Defra's consultation on the Common Agricultural Policy (CAP) may hinder agricultural development - the foundation of the rural economy.
The Association said the announcement that, potentially, 15 percent of farmers' direct payments may be transferred to fund rural development will limit their ability to invest in agriculture.
CLA Deputy President Henry Robinson said: "Farmers in England will be severely disadvantaged if modulation is at 15 percent - the full amount possible – which is not in alignment with our European neighbours, who may even benefit by switching funds from rural development to direct payments.
"This announcement fails to recognise that agriculture underpins the rural economy and taking money away from this sector will restrict its ability to become more efficient through greater investment.
"The government seeks to provide much needed growth in the rural economy but the impact of modulating at the full rate will achieve the exact reverse."
On greening, the CLA said Defra have chosen the easiest option with the lowest risk; to settle for the three basic measures set out by the EU – ecological focus areas, crop diversification and national permanent grassland rules.
Mr Robinson said: "European proposals are not altogether relevant to English farming systems and will stifle economies of scale.
"This is particularly true of the crop diversification measure, which will do very little for the environment and result in negative impacts on farming.
"Defra must look to provide an alternative to this measure and stand by their commitment not to place unnecessary burdens on the farming industry."
The Association said it was pleased to see that Defra agrees with the CLA view that a redistribution of funds under Pillar 1 should go to upland farmers and land managers.
Mr Robinson said: "This is a much better way of supporting those farm businesses in areas facing greater natural constraints."