They could define and enforce environmental laws that would make the current way of farming that is destroying nature impossible. The farmers would need to adapt or go bankrupt.

Instead they get offered millions. And in response they terrorize our society.

Yes, draconian as that seems, they should.

The government will be paying a shit load of money for it, so yes, I don't see any issues.

Or the government can just stop giving them subsidies and they'll just seize existing. I think buying them out is a neater solution.

Why is that the alternative you leap to? There are others.