Brussels said its package of measures targeting controls and administrative burdens would save up to 1.8 billion euros ($2 billion) annually for farmers and national administrations.
"Cutting red tape will move the focus to what matters most -- farming, not forms," said Valdis Dombrovskis, the European Union commissioner for the economy.
Among the changes envisaged by the European Commission, certified organic farms will automatically be considered as meeting some of the bloc's environmental requirements to receive EU money.
Small farmers will also be exempt from some environmental rules and benefit from a new funding option offering up to 50,000 euros as a one-off payment to help improve competitiveness, as well as a doubled 2,500-euro annual lump-sum subsidy limit.
Controls will be "streamlined through the use of satellite and technology" and on-the-spot checks limited to a maximum of one per farm per year.
The proposal comes as part of a wider EU push to slash rules seen as hindering businesses and economic growth, which has angered environmental groups.
It will need to be approved by the EU parliament and member states.
The EU subsidises farming under its common agricultural policy (CAP) to make sure enough food is produced at affordable prices, and farmers are rewarded for taking care of nature.
The aid is massive, with the sector gobbling up a third of the 27-nation bloc's budget. But farmers have long resented Brussels' liberal approach to trade as well as its regulatory zeal.
Months of protests last year saw farmers irked at administrative burdens, squeezed revenues and what they see as unfair competition from less-regulated overseas rivals, hurling eggs, spraying manure and blocking the Brussels' streets.
Negotiations on the next instalment of the CAP for 2028-2034 are set to be one of the most sensitive subjects during EU chief Ursula von der Leyen's second term in office, which began in December.
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