Agricultural intensification through increased pesticide and fertilizer use, mechanized agriculture and shortened crop rotation is a major cause of biodiversity loss and changes in landscape value. Increasing concerns have been raised about the loss of biodiversity and attractive landscape in the Netherlands. Agri-environment schemes of the European Common Agricultural Policy (CAP) which aim at reducing agricultural intensification and encouraging sustainable practices have been introduced and applied in many European countries including the Netherlands. Multifunctional agriculture integrates agriculture with both productive and non-productive functions. The delivery of public goods and services such as wildlife habitat, biodiversity conservation, landscape maintenance and water quality are all targeted through multifunctional agriculture. These public services are not traded and farmers are given payments as incentives to deliver them. In agri-environment schemes, measures that preserve the natural environment from degradation are applied. The effectiveness of agri-environment schemes (AES) in conserving biodiversity in the Netherlands has been questioned and this report seeks to identify impacts of AES and provide suggestions for improvement based on literature study. Studies conducted in the Netherlands on agri-environment schemes have presented contradicting results. Most studies have concluded that agri-environment schemes have had no effect or even negative impacts on biodiversity. Biological diversity (plants, birds, hover flies and bees) have been investigated for their species richness under the management agreement scheme and no positive effects were found on their diversity. Only hover flies and bees increased under the management agreement scheme under the study, (Kleijn et al., 2001). In another study carried out to investigate the densities of black-tailed godwit (Limosa limosa), and redshank (Tringa totanus), these species were higher in the areas with management agreements, but these differences were already present before the start of the contracts. After the start of the management contracts densities of black-tailed godwit and oystercatcher (Haematopus ostralegus) did not increase, while those of lapwing (Vanellus vanellus) and redshank even declined, (Breeuwer, et al., 2009). Measures that have been proposed to contribute to scheme effectiveness include extending contract duration, improving participation rate, more restrictions on agricultural intensification and keeping up to date environmental data.