MPs are urging ministers to do more to help hill farmers, saying many are struggling for a "decent" living and their plight hurts rural communities.
The cross-party environment select committee said livestock farming was vital to preserving landscapes.
But "hard-pressed" farmers needed help to diversify into new areas and direct payments linked to livestock numbers may need to be reintroduced, it argued.
Ministers said they were committed to "affordable" measures to help farmers.
In its report, the committee said the industry was under pressure and that tenant farmers in remote areas were having a "particularly hard time".
Farmers needed help to develop new types of income, like using their land for carbon capture and storage and water quality assessment programmes, it argued.
With many farmers struggling to access EU grants to which they were entitled, it said the way funding from the Common Agricultural Policy was allocated in the UK needed to be reviewed.
One step the committee said should be considered was re-introducing "headage payments" - funds paid directly to farmers calculated on the basis of the number of animals held.
"Government must ensure farm businesses can provide a decent income for hard-pressed hill farmers," the committee's chairman, Tory MP Anne McIntosh, said.
"Farmers in the uplands already do a huge amount of unpaid work that benefits the public. The challenge for ministers is to find a way to reward farmers for those public benefits while preserving their way of life and wonderful landscapes of our uplands."
Wider measures to support rural communities in the tough economic climate should be prioritised, she added, such as access to economic development grants and super-fast broadband services.
The Commission for Rural Communities recommended last year that farmers should be paid for protecting the upland landscape in England.
Ministers said they would be announcing details of their farm uplands policy in the near future.
"Hill farmers face some real challenges and make an important contribution not just in terms of agriculture but to the environment and landscape," a Defra spokesman said.
"That is why we promised in our structural reform plan to develop affordable measures of support for hill farmers, in order to help put them on a more secure and sustainable footing for the future."