There is still no pan-European assessment of the typology of low-intensity farming systems and of the changes which they are undergoing under current European Union (EU) farm policy. This study examines the variability of farm structure and farming practices of a typical cereal-sheep farming system under continental Mediterranean conditions with the aim of providing regional data of policy relevance. The collection of quantitative and qualitative data was planned with collaborative effort from regional extension agencies and followed the Delphi technique. Arable land in Castile-La Mancha occupied more than 70% of total agricultural land in 1997, the rest being natural pasture, shrub-steppe, and Mediterranean forest. Dry low-intensity arable systems still included a sizeable proportion of fallow to cropped land (20%) or somewhat more than 1,000,000 ha, and the winter cereal stubble was often grazed by sheep. These systems were of low intensity in the sense that they used low inputs per ha, particularly of nutrients and agrochemicals. They involved the exploitation of land, particularly for grazing, on an open and large scale. In this sense, they can also be considered extensive systems. On average, only 20% of arable farmers kept sheep, while 80% of the sheep producers were landless pastoralists. Young farmers tend to be disinclined to became involved in the sheep sector, because of the harsh working conditions of sheep farming operations. Response to new economic circumstances involved the evolution of traditional practices with corresponding lower use of farm labour. Although still low-intensive, these systems can be considered as modified forms of traditional practices which have responded to new technologies and the need to cut labour costs. The new objectives for agriculture in Castile-La Mancha, must create or maintain a way of life that is socially and economically attractive to young farmers, without the acceptance of environmentally damaging practices. These new objectives will require a new regionally-targeted EU aid scheme. In turn, there is a need to understand regional agriculture systems before we can hope to achieve successful policy.