Policy debates in the European Union have increasingly emphasised "Payments for Ecosystem Services" (PES) as a model for delivering agri-environmental objectives. This paper examines the Glastir scheme, introduced in Wales in 2009, as a notable attempt to move between long standing models of European agri-environment regulation and emerging approaches offering "Payments for Ecosystem Services". Specifically, the paper outlines how Glastir departs from previous discourse, where the environmental and socio-cultural benefits of farming are portrayed in broad terms, as positive by-products of "multifunctional-agriculture", to present "ecosystem goods and services" as desirable commodities in their own right. Nevertheless, despite the surrounding rhetoric and enthusiasm evident for a market-based approach, the paper argues that Glastir has emerged as a hybrid model, rather than "pure" PES scheme, in which key tensions between PES and agriculture can be identified. As such, the analysis of Glastir is used to put forward some initial points of assessment for PES schemes emerging in the context of current Common Agricultural Policy reforms.