Worldwide, biodiversity conservation is one of the key challenges for a sustainable future of nature and society. It is particularly important to preserve high quality habitats within otherwise intensively managed agricultural landscapes. Within the European Union (EU), farmers are highly dependent on agricultural subsidies through the Common Agricultural Policy (CAP), which hence have a strong influence on management and biodiversity. In European agricultural landscapes, wooded pastures form important habitats that contribute to landscape level heterogeneity and high local biodiversity, values which are often closely linked to trees. Unfortunately, many of these values were put at risk when a tree density limitation was introduced within the CAP, encouraging farmers to keep pastures open and ensuring grazing management. However, limiting tree density to a specific number to increase biodiversity finds little basis in the scientific literature. The main objective of this thesis is therefore to investigate how different measures of biodiversity across multiple taxa are affected by tree density and to study the farmers' perspective on this CAP regulation. Wooded pastures in the biosphere reserve Östra Vätterbranterna in southern Sweden were used as study sites. This thesis shows that encouraging farmers to cut trees to receive subsidies weakens the link between social and ecological values of wooded pastures, with potential subsequent losses in biodiversity. Trees were almost exclusively positive for biodiversity within this study system, increasing the species richness of plants, birds and bats. However, functional diversity across these taxa were mainly affected by other vegetation attributes within and around the pastures, such as shrub density and surrounding forest cover. A seed sowing experiment showed how trees partly shape plant communities already at the germination stage. Further, responses of functional diversity was mainly driven by resource use related traits among plants and birds, whereas bat functional diversity responses were mainly determined by their ability to manoeuvre through the micro-habitats of wooded pastures. Based on this thesis, I conclude that the tree density limit proposed by the EU has failed to capture the unique biological values of continuously managed wooded pastures and that the social-ecological links between policy, management and biodiversity are threatened by number specific governance of nature. It is therefore promising that the EU in November 2017 announced to open up for excluding the tree density focus in the CAP. Further development of the CAP can benefit from the findings of this thesis, revealing important knowledge gaps on biodiversity patterns in relation to trees in pastures.