Large tracts of European rural land, mostly in the less favored areas (LFA), are devoted to low-inputs and large scale grazing systems (LSGS) with potential environmental and social functions. Although these LSGS may provide harbor for a good part of European nature values, their continuity is facing contrasting threats of intensification and abandonment. These areas, however, may be characterized by particular grazing structures and social dynamics of change that should be unveiled prior to attempts to devise rural development strategies or (...) to adapt policy frameworks in general. To wit, stakeholder interactions and legal and institutional processes are described and analyzed for the cereal-sheep system of Castile-La Mancha (CLM) in the central Iberian plain. Farmers and pastoralists still share the use of the land, but their roles and interests have changed over time, and particularly in the last 50 years. Arable farming, mainly cereal cropping, has followed an intensification path, partially tempered by the environmental constraints of the Castilian plain. Extensive pastoralism is still a secondary option of land use; in the main, sheep farmers depend on, and look to, the management practices of arable farmers. A mixed cereal and sheep operation may deliver environmental and economic benefits, but successful implementation of this strategy is only possible when the system serves the needs of both types of stakeholders. Paradoxically, the main drivers of change in the countryside overall are arrayed against this sensible and traditional agricultural system. We argue that the recent legal and institutional frameworks do not favor social cohesion and that policy-support schemes of the European Union (EU) have been, and continue to be, devised without taking into account the particular structures and social dynamic of the farming system. (shrink)