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This paper presents a scientifically sound set of environmental indicators for comprehensive description of farm environmental impact within a policy-driven framework that aims at achieving Swiss agri-environmental policy goals. The indicator system covers the following key environmental areas: greenhouse gas (GHG) and ammonia emissions, nitrate and phosphorus leaching, biodiversity, plant protection products, soil erosion, and humus accumulation. Novel indicators were developed through reviewing existing indicators and intensive consultation with experts. To provide a flexible and suitable indicator-based system, three systems of varying complexity (simple, medium, detailed) were developed.In-depth evaluation revealed specific advantages and disadvantages of the three novel indicator systems at different complexity levels. The simple system benefited from a low administrative burden, but may suffer from limited acceptance owing to its low flexibility regarding farmers’ scope for action. The detailed system may be very demanding to implement in terms of data acquisition, but benefited from more accurate representation of the key driving processes. Successful implementation of the system will require broad acceptance promoted through sufficient support and advice, good communication between participating stakeholders, a secure and simple data acquisition process, and a high degree of transparency.