Agriculture occupies large areas and inevitably affects the environment. As the world's population grows, it is expected that environmental pressures will be even more pronounced. This paper compares the effects of conventional agriculture and permaculture on the environment. The comparison is based on the data found in scientific papers, books and reports from international organizations dealing with the impact of agriculture on the environment. In conventional agricultural systems high yields are achieved with high inputs of fertilizers, pesticide and energy but with negative effects on the environment more precisely on the quality of air, water and soil, endangering human health, living organisms in nature and agriculture itself. Conventional farmingis considered to be one of the main causes of biodiversity loss in nature. On the other hand, permaculture seeks to establish an agricultural system based on patterns observed in nature. Permaculture is "consciously designing and maintaining productive agricultural ecosystems that have the diversity, stability and resilience of natural ecosystems" (King 2008). Such a system does not use mineral fertilizers andpesticides, butaims to achieve natural balance – good design is very important. The permaculture farm is shaped in such a way that through the proper deployment of different elements the synergic relationships are formed which enable a wide variety of beneficial organisms to thrive, reduce labour (all that requires more attention locates in the vicinity) and the balance of the system. Permaculture approach to agriculture is an upgrade of organic agriculture where the main objective is the production of food without pesticide residues. In permaculture positive environmental impact is equally important. There are many small farms in Croatia that have the conditions for the use of permaculture and thus the production of healthy food, environmental protection and biodiversity.