The global demand for food is expected to continue increasing for decades, which may drive both agricultural expansion and intensification. The associated environmental impacts are potentially considerable but will depend on how the agricultural sector develops. Currently, there are contrasting regional developments in agriculture; expansion and/or intensification in some regions and abandonment in others, as well as changes in the type of farming. However, the environmental consequences of changes in farm type are not well understood. We have evaluated the impacts of farm type on food production and three key environmental variables—landscape openness, grassland biodiversity and greenhouse gas (GHG) emissions—in three marginal agricultural regions in Sweden. Our results show that there is not one single farm type that would simultaneously maximize food production, grassland biodiversity, and landscape openness, whilst minimizing GHG emissions. However, there exists considerable potential to manage the trade-offs between food production and these environmental variables. For example, by reducing land use for dairying and instead increasing both cropping for food production and extensive livestock grazing to maintain landscape openness and biodiversity-rich semi-natural pastures, it would keep food production at similar levels.