Nearly 500 farmers in England are waiting for last year's European Union subsidies, almost six months after the official deadline, the government said.
Farmers says the delays have driven some to bankruptcy
The Environment Minister, Lord Rooker, told the Lords a further 1,254 had received only an 80% part-payment.
He told peers: "Once again, on behalf of the government, I apologise for the delays in making these payments."
The National Union of Farmers blamed "the complete incompetence of Defra and its agencies" for the delays.
The NFU's Anthony Gibson also said: "It's quite disgraceful when you consider most farmers in the rest of Europe have had their second payment."
Lord Rooker said 480 farmers were still waiting for payments from the Rural Payments Agency (RPA) on 14 December, which compared with 911 cases eight days earlier.
He said the 1,254 waiting for a "top-up" were about half the previous week's total.
The RPA, a government agency, allocates about £1.5bn under the EU's single farm payment scheme.
The system calculates a single annual subsidy for each farmer for looking after their land, rather than a series of payments for producing food.
Many farmers claim the long delays in pay-outs have driven them to despair and even bankruptcy.
Defra said in a statement: "We are fully aware that significant problems at the Rural Payments Agency have seriously affected farmers.
"Whilst we are committed to resolving these issues, they are not ones that can be solved overnight. We are, however, working with the RPA to ensure that they are rectified as soon as is possible."
It added the RPA was tackling the backlog of work and trying to improve the effectiveness of its IT system.