Forage and ruminant production in Western Europe have increased significantly since World War II. However, in the last decade the livestock production sector has come under increasing pressure as the European Union introduced the milk quota system, effectively curbing total national and individual farm production volume, and national governments increasingly took measures to reduce the losses of nutrients from these systems to the environment. In the late 1980’s in the Netherlands a project was initiated with the objective to design, test and further develop a farming system that can serve as a starting point for the development of dairy farms on dry sandy soils with average milk production (system ‘De Marke’) using the method of ‘prototyping’. First, a number of farming systems have been identified that, in theory, meet the formulated objectives. From this theoretically acceptable set one of the technically and economically most attractive and, from a research point of view, most interesting was implemented at the experimental farm ‘De Marke’ in 1992. The functioning of this system is monitored in quantitative terms by measuring flows of dry matter and nutrients. The results sofar suggest that on dry sandy soils strict environmental standards for losses of nitrogen and accumulation of phosphorus can be attained within a short time while maintaining the current milk quota. Grass, maize and fodder beets could be grown in such a way that the norms for nitrate losses could be met. Improved utilization of animal manure and lower manuring levels allowed a reduction in the use of fertilizer-N of 74% compared to current practice. The input of P in feed and the output in milk and meat could be more or less balanced: P-surplus was only 18% of that on the current farm. To obtain reliable results the research will be continued for a longer period of time because the system has to stabilize, the soil nutrient and organic matter stores and soil fertility react slowly to changes in management, and weather conditions are always variable.