Biodiversity and economic incentives in agriculture : integrating bird fauna values into decision-making

Summary

Our optimal control model identifies economic reasons as to why several farmland bird populations have dramatically declined in modern agricultural landscapes. By integrating bird fauna values into decision-making on cereal crop choice, herbicide use and hunting bag size, we derive those economic instruments needed for enhancing biodiversity on farmland and reversing the decline of grey partridge (Perdix perdix) populations. Based on the Finnish data available, we illustrate how the optimal acreage subsidy for organically-grown rye areas, the herbicide tax rate and the grey partridge hunting licence fee could be estimated in monetary terms. The procedure to derive and value the first-best policy instruments is applicable for various components of agri-environmental schemes implemented throughout the European Union.