This research presents an analysis of policies concerning the multifunctionality of agriculture and their impact on the operation of farms in Burgundy, France and Kentucky, United States. We examine the conditions and behaviour of cow-calf producers as an illustration of how past and multifunctional agricultural policy influence farm structure. In France, the policy emphasis on full time farms, operated with high levels of technical efficiency, has led to a structure where the majority of cattle production takes place on family operated mid-size farms that receive all their income from cattle production. The introduction of new pro-environment policy has reinforced the prevailing system because these policies have been tightly coupled to the pre-existing system that encourages high quality production by medium size family farms. In Kentucky calf production mainly takes place on small, or very small, farms that have traditionally relied upon a combination of, income from cattle, income from tobacco and off-farm employment. Unlike France there is only a limited set of public policies that influence cattle producers’ decisions National agri-environment measures are the main policies applicable to cattle farms. These seem to be most attractive to smaller farms, but State initiatives in Kentucky also focus on increasing income levels on small and medium size farms to offset lost tobacco revenue, and on developing a new structure that encourages greater attention to production methods to improve quality and external demand for Kentucky cattle. In both countries it appears farmers respond rationally to the combination of policy and market signals that effect them.