‘Farming for Nature’, a relatively new policy instrument being tried out in the Netherlands, is evaluated. The concept has been designed to allow dairy farmers to improve nature conservation on their farms. Under the scheme, no manure, fertilizer, or feed – concentrates or roughage - may be imported into farm systems from external sources. The feasibility of such a self-sustaining system and the conditions required for it to deliver the desired results, are explored with a farm-based linear programming model known as FIONA (Farm based Integrated Optimization Model for Nature and Agriculture). The model is explained and applied to ‘de Langstraat’, a region in southern Netherlands. The results show that levels of production under the ‘Farming for Nature’ regime are dependent upon soil fertility and the proportion of land that is suitable for growing arable crops. If all available land on a dairy farm in the scheme is arable land, then high production levels of up to 7,500 kg milk per hectare can be realized. If only 30% of the farm area is suitable for arable crops, then only lower production levels, of about 6,600 kg milk per hectare can be realized. The scheme has positive ecological effects. Both nature and cultural landscape values may benefit significantly from the concept. Improvement in ecological terms however, carries a price in terms of agricultural income. An average dairy farm adopting the concept of ‘Farming for Nature’ experiences an income loss of approximately € 840 per hectare in the short-run (5-10 years). More important is the observation that the scale of such farms in the short-run might be too small to earn an attractive income for its workers, even when fully compensated according to European Union regulations.