How to value ecosystem goods and services in agriculture at increasing land use pressure ?

Katarina Hedlund Lund university, Sweden

Land use projections

• Production of goods is increasing– Food, biofuels, timber, water use

• Natural habitats are declining

• Mitigating climate change– Increased pressure on land for production

of biomass

EU biofuel strategy 2006 1% (produced in EU)

2010 6% 10% of total area

2020 10% 43% of total area

Agricultural land use

Nowicki 2006

Current land use in Europe

Land use in EU-27

arable land

permanent pastures

permanent crops

forests

other areas

Eurostat 2008

Biofuel production

Agriculture Natural grasslands

Land use demands

Extensive agriculture, Dehesas in Spain

How do we conserve ecosystem services and biodiversity ?

Agri-environmental schemes:

Extensification

Protected areas

Heterogeneity in landscapes

EU common agricultural policy CAP

• Implemented nationally as rural development plans with additional national funding

• CAP (12 000 million €/yr), 47% of EU budget• Farming is 5% of European economy• CAP subsidies

– Area based income support– Rural development actions– Agri-environmental schemes

Ecosystem services threatened by

intensive agriculture

• Natural enemies• Pollination• Resistance to pests &

invasive species• Nutrient cycling• Water retention• Carbon retention

Intensification and above ground services

• Increased heterogeneity may give higher diversity

• Effect is scale dependent

• Not true for all species

Tscharnkte et al. 2007

Soil ecosystem services

• Nutrient cycling

N, P retention and availability to plants

• Water retention

Aggregate structure, organic matter• Carbon retention

Fuels microbial activity, mitigates climate change

Soil ecosystem services-the ”workers”

Soil services

Reduced under intensive management

0

5

10

15

20

25

30

bacterial biomass AM-fungi fungi

grassland

field

Hedlund 2002

SOILSERVICE

Conflicting demands of land use:

Soil biodiversity and the sustainable delivery of

ecosystem goods and services in Europe

http://www.kem.ekol.lu.se/soilservice/index.html

• value soil ecosystem services.• predict sustainability of ecosystem services, by field and modelling studies.• Build scenarios to identify economical and social drivers of land use

Biofuel production

Agriculture Natural grasslands

Land use demands Soil carbonNutrientsNatural enemiesPollination

Valuation of ecological services

Market values of ecological servicesprevention of pests - natural enemiespollinationwater retentionnutrient retention

Non market valuesrecreationlandscapes

Markanday et al 2008

Economic valuationa dynamic approach

Ecosystem services in agriculture

- Dynamic network of interacting organisms

- Responding to changes in land use

- Depending on spatial and temporal scales

SOILSERVICE

Economic model

simulated landscapes

predicts regional land

use (20 yrs)

Ecological model

farmers scale

predicts output of

ecosystem services

Values of servicesfor farmer and society

Predictions on sustainabilityFeed back to policymakers

AgriPoliS Agent-based model of regional structural change

over time and space

Actions

Interactions

Farms

Factor endowment

Agricultural Policy Simulator (Happe 2004, Brady et al 2007)

Institute of Agricultural Development in Central and Eastern Europe (IAMO),

Halle, Germany

Drivers in relation to AgriPoliS

Exogenous• Prices of

inputs/outputs• Wage and interest

rates• Agricultural policy• Climate• Technology

Endogenous• Land market• Regional markets• Input & output levels• Land use• Landscape impacts• ES production

Output from AgriPoliS

• Farm structure– Average farm size– Number of farms– Distribution of farm

type• Land use

– Composition of crops– Distribution of field

size– Landscape mosaic

• Econ. Performance– Land rents by soil

type– Farm income – Farm profit – Investment activity– Returns to labour

• Livestock– Numbers of livestock– Animal density

SOILSERVICE field sites

Regions for valuation ofservices

SOILSERVICE partners•Lund University, Sweden, Dr Katarina Hedlund•Swedish Institute for Food and Agricultural Economics, Sweden

Dr. Mark Brady, •University of Copenhagen, Denmark Prof. Søren Christensen, •University of Helsinki, Finland Prof. Heikki Setälä, •Netherlands Institute of Ecology, NL, Prof. Wim H. Van der Putten, •Wageningen University, NL, Prof. Peter C. de Ruiter, •Justus-Liebig-University of Giessen, Germany, Prof. Volkmar Wolters, •Biology Centre of the Academy of Sciences, Czech Republic Dr. Jan Frouz, •Aristotle University of Thessaloniki, Greece, Dr. Stefanos Sgardelis•Lancaster University, United Kingdom, Prof. Richard D. Bardgett•University of Reading, United Kingdom, Dr. Simon Mortimer

Landscape impacts – Land use & field size

(b) Change in mean Field Size , Västerbotten

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

IntensiveGrass

ExtensiveGrass

Arable Crops All Arable Semi-NatGrassland

AGENDA REFORM BOND

(b) Field type as proportion of landscape , Västerbotten

-100%

-50%

0%

50%

100%

150%

200%

250%

Intensive Grass Extensive Grass Arable Crops Semi-NatGrassland

AGENDA REFORM BOND

Land use data (GIS based)Southern Sweden

Cereal production Grasslands