The Economics of Biodiversity Loss in Agricultural Landscapes

This paper offers a framework for analysing the economic drivers and effects of agrobiodiversity loss, focusing on in-situ conservation at both farm and landscape levels. We distinguish between the proximate and fundamental causes of biodiversity loss in terms of the decentralised (microeconomic) behaviour of farming households. Special attention is paid to the interplay between microeconomic decisions and the mesoeconomic factors (i.e., institutional and market conditions) that determine the effects of government policies. We interpret agricultural landscape changes as the product of explicit or implicit decentralised farm-level decisions to (dis)invest in biodiversity as a strategic asset that provides flows of ecological services onand off-farm. Several case studies are used to illustrate how ‘downstream’ or ‘forward’ effects feed back into agricultural production and stability (‘backward effect’). This framework can be used to assess the effectiveness of policies to address underprovision of agrobiodiversitysupported ecological services that are socially (locally and globally) welfare enhancing.