Abstract Organic farming is increasingly considered in the European Common Agricultural Policy. Sound evaluations of the effects of policy measures on organic farms in the EU are needed to face the challenges in future policy design. The effects of various policy scenarios on profitability and development strategies of typical organic dairy farms are analysed for the EU countries—Germany, Denmark, the United Kingdom and Italy. Based on an approach which links simulation modelling and focus groups consisting of farmers and advisors, profitability of typical farms is analysed, the impact of policy scenarios (Agenda 2000 and two alternatives) simulated and farm adaptation strategies forecasted. Size, structure, productivity, profitability and policy environment surrounding typical organic farms differ widely between countries. Dairy farms will benefit from Agenda 2000. In adaptation to Agenda 2000 they are expected to either grow or diversify production. Two extreme alternative scenarios are also analysed in their impacts on organic farms, a supply-policy driven scenario (I) and a demand-induced scenario (II). Scenario I results in higher profitability of organic farms than scenario II in the long term, while Scenario II results are similar to Agenda 2000 effects in the long term. Adaptation strategies to alternative scenarios are similar to the ones forecasted for Agenda 2000.
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