Effects of forbs and legumes intercropped with organically grown winter cereals on plant productivity and fertility related soil parameters were detennined. Yarrow (Achillea millefolium), cornflower (Centaurea cyanus), chamomile (Matricaria recutita), dandelion (Taraxacum officina/e), white clover (Trifolium repens) and subterranean clover (Trifolium subterraneum) were established between wide spaced cereal rows as companion plants or as perennial living mulch, where cereals were sown into rotovated bands. Cornflower and chamomile had significant competitive effects already in their first year after sowing. Yarrow and dandelion, established as living mulch in an earlier growing season, were severe nitrogen competitors, in spite of low productivity in the case of dandelion. White clover living mulch was a more moderate, but still significant competitor. Nitrogen content of cereal plant material was higher in these plots and the clover steadily increased the total plot productivity by contributed nitrogen. Ammonium was the dominant form of mineral nitrogen in soils covered by plants. Performance of the systems was heavily dependent upon nitrogen relationships. This must be taken into consideration in attempts to manage biodiversity in organic plant production.