Description

The State of Food and Agriculture 2007 highlights the potential of agriculture for enhanced provision of ecosystem services that are not usually compensated for by the market. When we think of farmers, we typically think of the food and fibre that they produce and that they either consume or sell on markets to generate an income. But the production processes can also result in impacts on other ecosystem services that are not traded in markets, referred to in this report as environmental services . Some may be positive, such as groundwater recharge and scenic landscapes; others may be negative, such as water pollution by plant nutrients and animal waste, and soil erosion from poorly managed croplands or overgrazed hillsides. As agricultural production expands, these negative effects can develop into increasingly serious problems. A fundamental question concerns how farmers can be encouraged to reduce negative side-effects while meeting the growing demands for food and fibre. At the same time, changes in agricultural practices may also contribute to addressing environmental problems generated outside agriculture, for example, by offsetting greenhouse gas emissions from other sectors. A relevant question, therefore, is how farmers can be induced to increase their provision of this type of service.

Paying farmers for the environmental services they provide is an approach that has generated growing interest worldwide from policy-makers and non-governmental and private decision-makers. This strategy is akin to viewing environmental protection as a business transaction. This perspective is not without controversy, but it must be kept in mind that many services are degraded precisely because they are free to use but costly to provide. Payments for environmental services have also attracted attention for their potential to mobilize new sources of finance to support sustainable environmental management in developing countries and to contribute to poverty reduction and agricultural development.

This report examines this approach to enhancing environmental services through the lens of managing agriculture to meet the agricultural and environmental demands of the future. In addition, it examines the potential of this mechanism to contribute also to poverty reduction. Of the numerous services to which agriculture can contribute, this report highlights three: climate change mitigation, enhanced quality and quantity of water provision and the preservation of biodiversity.

(Excerpt from Foreword)