Th e paper aims to assess the impact of the Common Agricultural Policy reform (post 2014) in the environmental vulnerable areas from Romania. It proposes a bio-economic dynamic farm model calibrated with the positive mathematical programming (PMP). Th e standard PMP approach was extended to simulate the mixed farming systems through the introduction of a livestock production activity in the fi rst calibration step. It allows incorporating activities not available in the base year, but that can be performed by the farmers after the future policy reforms. Th e model provides supply-responses for both the crop and livestock farms according to the agricultural and fi nancial policy shifts. It maximizes the farm net fi nancial fl ows subject to the resource, livestock, fi nancial and agricultural policy constraints. Th e initialisation data were obtained from a face-to-face stratifi ed survey applied on the mixed-sheep farms that have used grassland areas under the Agri-Environment Schemes (AES) in the North-Western Romania (Transylvania). Th e results show that the most vulnerable group to the policy changes is represented by the small-size farms, to which the AES are very important economic drivers. Th us, the diversifi cation and the off -farm employments possibilities should be integrated into the future rural development plans as a premise for their survival.