Paterson was the Conservatives' shadow agriculture, fisheries and food minister from 2003-05.
Caroline Spelman, whom he replaces, held the Defra brief since the Coalition's formation in May 2010, but will no longer have a role in cabinet.
NFU president Peter Kendall said: "I look forward to meeting Mr Paterson at the earliest opportunity to discuss the ways in which the farming industry and government can work together in future.
"He has a real appreciation of the importance of agriculture, both as a result of the strong farming presence in his North Shropshire constituency and through his previous experience as shadow Defra spokesman."
Kendall also paid tribute to the outgoing Caroline Spelman, saying: "She has worked incredibly hard to foster strong and meaningful relationships with our partners in Europe, a vital element in our efforts to ensure forthcoming reforms to the Common Agricultural Policy do not discriminate against the interests of British farmers."
Country Land & Business Association (CLA) president Harry Cotterell said: "The CLA would like to see Owen Paterson vigorously implement the good policy work started under his predecessor, and present a bold vision for our industry in Defra’s forthcoming Rural Statement."