Farming subsidies are "propping up" bad farmers and preventing new blood joining the industry, the Farming Minister has said.
George Eustice, also a West Country MP, said some unprofitable farms that rely on EU hand-outs should be helped to "get out of the industry".
Successive British governments have failed in their attempts to slash the subsidy, costing each household around £400 a year, against resistance from EU nations led by France.
Mr Eustice, speaking at a Westminster inquiry into future food shortages, said the Common Agricultural Policy has a "distorting" effect by curbing growth among successful farms and keeping bad ones in business.
The Conservative MP for Camborne and Redruth told the cross-party Environment, Food and Rural Affairs select committee: "Everyone who looks at this says the same thing.
"Part of getting new people into the industry is helping some of them retire and get out of the industry.
"We have a fixed amount of land, and if you want to create opportunities for new people – who want to come in with fresh ideas and fresh thinking and be more productive – we need to make it easier for some of those to retire."
He added: "If you have got unprofitable, less productive farms and they are basically being propped up by the single farm payment – which is a straight subsidy payment – then you are making it harder for new entrants to get in."
Farming subsidies come in two forms: direct farm payments given to all farmers, based on acreage, and money in return for environmental and rural development measures, such as building dry stone walls and creating wildlife habitats.
Ministers eventually want to scrap all direct farm payments. But the coalition Government scaled-back proposals to give a bigger share of the £20 billion subsidy received by British farmers over the next seven years to the environmental "pillar 2" budget.
There are already a number of schemes across the country to help ease struggling farmers into retirement.
In 2005, the Fresh Start programme was launched in Cornwall to help younger people enter farming and help older producers retire with dignity through a "match-making" scheme.
Mr Eustice, who worked on his family's west Cornwall fruit farm for ten years, told the committee: "We think (CAP) is a distorting policy.
"It potentially prevents larger businesses from expanding. And it can keep some of the less productive farms going when actually they should be retiring and allowing more productive businesses a go. So we do think it can affect farmyard activity."
He added there is "quite a variation" between farms reliant on the subsidy to make a profit and others that "don't want the hassle" of applying for the hand-out because of the bureaucracy.
But he made clear that "marginal land", such as uplands where it is even harder to turn a profit but play a key role in maintaining the delicate balance of the countryside, should not be abandoned.
Yet Mr Eustice also insisted: "Even within hill farming you will find some farmers are more successful than others.
"Probably what we should have is a degree of consolidation," he said.
"And even make it easy for new entrants to take-on farm and take on holdings and bring some fresh ideas into farming."
Characterising the single farm subsidy as an "arbitrary area based payment", he held out little hope of change.
He said: "For all of my lifetime, and probably years to come, CAP has always had this suffix 'reform' at the end of it, and it is a slow incremental process."