Managing ecosystem services for agriculture: Will landscape-scale management pay?

- We explore whether landscape-scale management (LSM) will benefit farmers.
- We examine interactions among farmers in space and time using an agent-based model.
- All farmers benefit from LSM even if yield has minor dependence on ecosystem service.
- An incentive-compatible contract exists that can promote optimal LSM.
- Incentives to free-ride are likely to be a major obstacle to habitat management.

Agriculture's reliance on ecosystem services creates economic and ecological interdependencies between crop production and biodiversity. Interactions with mobile organisms are particularly complex because they depend on the spatial configuration of habitat at large scales. As such conserving habitat is likely to benefit multiple farmers whereas conservation costs are born individually, creating potential interdependencies among farmers. We explore under what conditions landscape-scale management of ecosystem services is likely to benefit farmers compared to managing them at the farm-scale. To do this we develop an agent-based model (ABM) to predict the landscape configuration emerging from farm-scale management under different conditions: initial landscape, crop and pollinator characteristics. As a benchmark, the landscape configuration from landscape-scale management is derived through a global optimization procedure. Not only do we find that efficiency improves with landscape-scale management, but also that all farmers would benefit from it (given dependence of crop yields on ecosystem services). However, we also find that the individual incentives to avoid maintaining habitat on one's own land are relatively high; therefore creating conditions for a Prisoner's Dilemma-type problem. On the other hand we also demonstrate that an incentive-compatible contract exists that can promote efficient landscape management (by combining side-payments with fines for defection).