Conference Agenda

Conservation science and economics research determine that wild species provide various valuable ecosystem services (ES) to agricultural production. Whether those services provide a strong incentive to farmers to allocate some land to habitat for those species depends on the characteristics of the land and ES, with Simpson (2019) finding a modest incentive for farmers to conserve habitat. This paper develops a farmer decision model using a set of agricultural production functions that have multiple ecosystem services entering in different observed ways, including synergistically. We use the model to examine how the farmer’s incentive for habitat conservation relates to market access costs for inputs that substitute for ES and varies across settings that provide more than one ES. We find that common market settings in low-income countries and common multiple ES settings can increase the farmer’s optimal habitat conservation. We also explore the response of private habitat conservation and rural incomes to policies that reduce market access costs, make payments for ecosystem services, and conserve public land for habitat. We apply the model to a coffee-growing region in Costa Rica that raises issues about the contribution of off-farm habitat to on-farm agricultural productivity and farmer’s private habitat conservation levels.