This paper examines the potential impact of agricultural and trade policy reform on land-use across the EU focussing particularly on the issue of land abandonment. Using a novel combined application of the well established CAPRI and Dyna-CLUE models it estimates the extent of change across Europe under removal of Pillar 1 support payments and trade liberalisation. Overall, it is estimated that around 8 per cent less land will be farmed under these reforms than under the baseline situation. However, some regions, areas and farm types face more significant reductions. The reforms are particularly felt on livestock grazing farms situated in the more marginal areas of Europe, which also coincide with areas of high nature value. Therefore, farmland biodiversity is likely to be reduced in these areas. However, using a range of environmental indicators, relating to nutrient surpluses, GHG emissions, soil erosion and species abundance, an overall improvement in the environmental footprint of agriculture is likely. In addition, the economic efficiency of the agricultural sector will probably improve. The paper considers several possible options available to deal with any negative aspects of land abandonment. Following the FAO (2006), it is argued that untargeted, rather general agricultural policy measures which maintain land in production are likely to be an ineffective and inefficient way to address the perceived negative consequences of abandonment. A more holistic approach to rural development is required, tailored to the specific context within each area. © 2012 Elsevier Ltd.