An energy saving scheme has been announced by the Carbon Trust which will help British farmers to slash their fuel bills.

The initiative will allow people in the agriculture sector to apply for unsecured, interest-free loans of between £3,000 and £20,000 to help them use more efficient equipment.

It is estimated that these measures will cut farmers' energy bills by £4 million per year, while reducing annual carbon emissions by 25,000 tonnes.

Those who take advantage of the energy saving programme will be able to repay the money through the discounts they have received from their power invoices.

Environment secretary Hilary Benn welcomed the move, saying it is common sense for farmers to cut their outgoings while also reducing the cost of producing food and lowering their impact on the environment.

"These interest-free loans will help farmers … to cut emissions right at the start of the food chain," she added.

This news comes after the Conservative Party unveiled a similar trial scheme in which three million householders would be given loans to make energy saving changes to their properties.