Conventional and organic farming practices have been compared at various levels in the project The Economic Effects of Environmental Impacts of Agricultural Production Alternatives (in Finnish MATYVA for short). The customary farm level considerations form the core of the analysis, which is supplemented with diverse environmental and social aspects. The main focus is on the environment, due to the various negative externalities of modern agriculture. According to various nutrient leaching studies, the nitrogen load of organic farms is on average 50% smaller than that of conventional farms. Organic farming practices also improve the overall condition of the soil, thereby reducing soil erosion and the phosphorus load. The Finnish Agri-Environmental Programme (FAEP) and its Supplementary Protection Scheme (SPS), both implemented in 1995, offer special support to organic farmers in the form of conversion support and organic production support. Conversion support has made organic farming financially quite attractive. Even without premium prices, organic technology is, within most production lines (milk, beef, cereals), just as profitable as conventional agriculture. Only in pork and vegetables is organic farming relatively unprofitable. Recent methods of environmental economics were used to assess the monetary value of the agricultural landscape and reduced pesticide use. A contingent valuation study of agricultural countryside environment, including landscape, etc., estimated consumers willingness to pay (WTP) for fields that are kept open, though not in production. The estimated average WTP was about FIM 400/ha/a in 1991. Another contingent valuation survey estimated the willingness of finnish households to pay for reduced pesticide use. The median WTP was FIM 1200/ha/a for a 100% reduction and FIM 1600/ha/a for a 50% reduction. Since in organic farming domestic inputs (mainly labour) are substituted for imported inputs like fertilizers and pesticides, a large scale conversion to organic farming could have some macroeconomic effects as well. However, these effects are probably smaller than the average seasonal variation: the unemployment rate (unemployed/total labour force) would decrease on average by 0.8 percentage points, depending on the development of organic production technology. Imports would decline by some 1.2 bill. FIM, which is roughly 1% of the total.