This study analyses the role of agricultural policy in reducing nutrient loads from Finnish agriculture. Reduction in nutrient load potential is quantified through nutrient balance per ha of cultivated land, i.e. by calculating the difference between nitrogen and phosphorus inputs and outputs per ha of cultivated land. Agricultural policy affects prices of agricultural products and inputs, as well as incentives to produce through production linked subsidies. Impacts of 5 different agricultural policy scenarios on agricultural production and on the resulting nutrient balances are evaluated using an economic agricultural sector model. The model includes 18 production regions in Finland. Investment in different production techniques depends on the relative profitability and the spread of each technique in the population of heterogeneous farms. There are relatively few large farms which use efficient production techniques in Finland. De-coupling agricultural support from production, as well as the reduction of milk prices, weakens the incentive for dairy investments and production. Considering the high production costs and the dominance of small scale farms in the Finnish dairy farm structure, one can expect that de-coupling and low milk prices are likely to result in a significant drop in milk and beef production in the 10-20 year period. Setaside is likely to increase and the area under grass decrease in Finland. However, only little reduction in nitrogen surplus can be expected on cultivated area after 2005. Phosphorus surplus may even increase on cultivated area after 2005 because of concentration of production on certain areas. Hence the agricultural policy changes cannot be expected to reduce nutrient loads significantly.