A club model of nature‐smart agriculture for biodiversity, climate, and productivity enhancements

Abstract

This article considers horizontal and vertical intensification interactions between environmental conservation and agricultural production to investigate a top-down partnership in agriculture. It addresses the issues underlying the challenge of food security. It explores a nature-based landscape approach to agriculture management that simultaneously ensures food security and safeguards the natural environment. The economic theory of clubs is applied to extend farm-level sustainable agricultural intensification and conservation practices to encompass interconnected activities within the entire landscape. A theoretical ecological-economic club model is used to explore how biodiversity and climate-related environmental goods and agricultural products are coproduced by private producers in agroecosystems of any spatial scale. The model considers any given agroecosystem as a club producing two goods: private economic output and public ecological output. It also proposes a dual environmental incentive approach to promote participants' individual and collaborative efforts. The model derives (a) the social conditions for the optimal application and allocation of resources for producing sustainable agricultural and ecological outputs and (b) the producer's incentive conditions for adequate levels of individual and collaborative conservation activities. Thus, the study identifies conditions that optimize horizontal and vertical agri-environmental farming intensification while preventing crowding out voluntary conservation activities. The model presented here can set a theoretical "benchmark" model to address real-life deviations comparatively. A practical proposition derived from the analysis points to the possibility that farm-scale conservation (of biodiversity and climate-related attributes), when extended to the landscape level, can optimally enhance the interconnected goals of agri-environmental farming. Thus, a data-driving methodology is described to outline a practical approach to the agricultural transition toward landscape conservation, a practical guide for policymakers and regulators who need to develop and provide tailor-made support to agricultural producer members of the club.