An area surrounding Market Deeping near Stamford is one of just four sites selected nationally.

It has been chosen for its suitability for testing the scheme, and it is hoped at least 50 arable farmers - growing vegetables and cereals - will take part.

The project will test the popularity of new ideas with farmers to cut pollution, promote wildlife conservation and better management of land.

The Minister for the Environment, Michael Meacher, says the scheme will last two years and could then be rolled out across the country in 2005.

Once the precise boundaries of the test site have been set, farmers will be invited to take part in the project.