Dumfries and Galloway Police detained the farmer 22 hours after receiving the allegation and allowed him to retrieve his guns himself for seizure, the Police Investigations & Review Commissioner (PIRC) heard.
A farmer accused of wielding a loaded gun "ought to have raised a concern that he might present a danger" and should have prompted an immediate response, Commissioner John McNeill said.
On the evening of January 22 2010, the farmer reported poachers on his land to police.
When an initial police search proved fruitless the farmer went out alone with a shotgun "to shoot any poacher's dog that was loose in his fields", the commissioner heard.
The farmer told police that he found three men with two dogs and carrying rabbits or hares. When police confronted the men, one of them said the farmer had pointed a shotgun at him.
But police did not detain the farmer until around 8.45pm the following night and allowed him to go upstairs to either retrieve keys for the gun cabinet or the guns themselves, depending on conflicting accounts heard by the commissioner.
The farmer was arrested and held for two days, and was subsequently acquitted.
He complained about the officers' conduct, much of which was dismissed by the PIRC but the commissioner ruled that the farmer should not have been afforded such a great degree of liberty given the seriousness of the charge.
"(The farmer) complained that the sergeant had placed himself and his colleague in danger by allowing the applicant to go and retrieve his shotgun unaccompanied. The applicant commented that had he been 'minded' to make use of the gun, he could have killed both officers," the commissioner's report states.
"The applicant had been detained by the officers who should therefore have taken control of him and not allowed him out of their sight.
"The applicant was alleged to have pointed a loaded shotgun within 6-12 inches of (the alleged poacher's) chest. In the commissioner's view, that alone ought to have raised a concern that he might present a danger, if not to the wider public, certainly to (the alleged poacher)."
Dumfries and Galloway Police was merged into the new single police force on April 1. The commissioner noted that Police Scotland has already implemented tighter operating procedures on firearms so, he said, no further action was required.