This interdisciplinary project examines how Swedish dairy farmers, given different types of policy instruments, are affected by the ongoing structural transformation in the primary production. The study will improve our understanding about how the ongoing structural change affects profitability in smaller and larger dairy herds, how it affects biodiversity, landscape features and emissions, and how farm profitability is affected by different types of policies. These aspects are crucial for the Swedish model with added value linked to the environment and to animal welfare. In the project we address the following research questions: 1) What explains differences in profitability between dairy farmers? 2) How does the structural change affect a) profitability in smaller and larger dairy farms, b) biodiversity and landscape features in different regions, and c) emissions of greenhouse gases and nutrients? 3) How is Swedish milk production affected by different types of policy instruments?