Coldplay: Were to play at the all-day concert in Cardiff
It had been due to take place at the Millennium Stadium in Cardiff on 27 October, with tickets on sale at £26 each.
It was hoped that the gig would raise £500,000 from ticket sales, with money from TV revenue and donations to be added on top of that.
But organiser Michael Eavis, himself a dairy farmer and the organiser of the annual Glastonbury Festival, has now decided it would not be appropriate to hold the concert.
A statement on behalf of the organisers said: "Due to the horrendous events in America we have had to cancel our Farm Aid concert in Cardiff.
"Everyone's thoughts will be, for a long time, directed towards the terrible loss of life and the consequences that will bring to many thousands of people."
The all-day event was to be headlined by UK bands Coldplay, Toploader and Ash - although acts such as U2 and Robbie Williams were said to have turned down Mr Eavis's request to play.
A pressure group had also urged music fans and bands to stay away from the concert, saying farmers did not deserve extra money.
The Vegetarians International Voice for Animals (Viva) wrote to bands and planned to stage a demonstration outside the stadium.
Despite reports that at least 37 farmers have applied for more than £1m compensation each, Mr Eavis said thousands of farmers were "really struggling".
"They look after the countryside and do a great job but they are finding it almost impossible to earn a living," he said.
Mr Eavis, who is a full-time dairy farmer and also stages the Glastonbury festival, had said he was staging the event because foot-and-mouth has been the "the straw that broke the camel's back" for the farming industry.
Reef and Morcheeba were also due to appear.
Mr Eavis had criticised the biggest names in UK music, including U2, Oasis and Robbie Williams, for refusing to appear.
"They don't really see it as their problem. They don't identify with small farmers' problems. They've got loads of money," he said.
The charities that were to benefit were the Royal Agricultural Benevolent Fund, the ARC Addington Fund, the Farm Crisis Network, the Rural Stress Information Network, the Samaritans and the RSPCA.