This paper examines the influence of animal premiums under the CAP beef and ewe regime on beef and sheep meat farming in the Netherlands concerning instruments like stock density limits, quota on premium rights and premium payments. On the basis of econometric models, equations are estimated for beef cows1, bulls and ewes. Then, the impacts of the different policy instruments on the stocks are decomposed. At last, prospects of Agenda 2000 on the Dutch beef and ewe sector are calculated up to 2010. For policy makers, the study offers information on the effectiveness of animal premium instruments to manipulate beef and sheep meat production. For Dutch farmers, the study offers information to what extent premium instruments might influence the decision to incline or reduce their stocks.