This paper presents a methodology to evaluate the impact of different policy scenarios using a farmer's utility function. The analysis shows the impact on farmers and on the environment. The case study is a community of irrigated farms (Bajo Carrión) in Northwestern Spain. The results obtained show how Agenda 2000 has little impact on farm crop distribution, gross margins, employment and environment (use of fertilizers and water). The most radical scenario (a 15 per cent COP price cut and no area payments) produces a 37.3 per cent reduction in farm gross margin, and an increase in fertilizer use of 6 per cent.