The purpose of this paper is to summarize the literature and the debate over agrienvironmental program effectiveness in the European Union (EU) and the US, with emphasis on examples in the Northeastern US and Germany. A particular concern is arrangements for blending regulatory and compensatory incentives for providing environmental goods and services on farms and in rural communities. In the EU, and especially in Germany, a prevailing view is that current agri-environmental efforts are unsatisfactory in terms of effects on environment and cost-effectiveness. Future challenges include better targeting of agri-environmental payments and providing incentives for resource sustainability. In the U.S., efforts to achieve a balance between agriculture and environmental quality are longer lived and follow two distinct policy tracks: 1) soil erosion/water quality management and 2) farmland protection. Each policy track has its own constituency and each has a fairly exclusive list of policy tools. However, this fragmented policy environment tends to blur the broad view of the “multifunctional” landscape and the implications of farm and food production on landscape diversity, biological resources, wildlife habitat, and open space land interests. Suggestions for advancing the strategic interests of both countries in the arena of working landscape management, with particular emphasis on providing financial incentives for the provision of environmental goods and services are discussed.