Rewards for ecological goods - requirements and perspectives for agricultural land use

Abstract

This paper focuses on the possibilities to reward ecological goods and services of agriculture. Ecological goods in agriculture are achieved by various types of agricultural land use either creating resources or buffering resource consumption. From an economic point of view, positive consequences will result from rewarding the agricultural sector for the production of ecological goods according to market principles. A rewarding system can be developed according to market principles when results instead of actions are rewarded, producer and consumer surpluses are created, demand can be expressed and supply can be provided. Ecological goods are public goods, therefore the expression of demand is up to the community. However, the purchasing of such ecological goods is up to the authority administrating public finances. Establishing regional markets is necessary, since regional differences are evident. Principally, the price of an ecological good should be determined by its value to the public, not by the cost of production. With respect to the various ecological goods achieved by the agricultural sector, the contribution of agricultural land use to biodiversity, and more specifically to plant biodiversity seems to be the most appropriate for a market-orientated rewarding system. A framework for establishing such a market is outlined in this paper. Deviation from standard economic principles regarding prices for ecological goods are considered to be necessary during an introductory period. Finally based on both, ecological and economical considerations, and regarding the intrinsic and extrinsic characteristics of "plant biodiversity connected with agricultural land use", it seems worth the effort to further examine and develop this concept. (C) 2003 Elsevier Science B.V. All rights reserved.