Eco-System Services in Agrarian Value Chains: Value Detection of Bio-Diversity as Public Good Provision, Problems, and Institutional Issues

Abstract

Valuation of nature (biodiversity: BD) and in particular ecosystem services (ESS) are important prerequisites for the design of cultural landscapes as well as in agricultural policy and the generation of BD as public interest. Designs should be built on valuation and valuation is usually seen as market assignment of prices. Yet, there is a problem with market failure. BD and ESS can be characterized as public goods, both being non-rival and non-exclusive, thus demanding public provision. Largely due to public pressure, nature provision and planning has received increased attention. Especially as a means to create values i.e. in conservation projects and specifically to add value and income to farmers’ value chains. Governments seek to promote BD and landscape provision by farmers, but money is scarce. Planners frequently do not know what the public wants and contingent valuation results are often regarded as insufficient because of missing vehicles of payment. There is scope for a more workable coordination process (institutional innovation) between interests in nature provision projects (being oriented at BD and corresponding ESS) and willingness to pay WTP (for foods related to nature). It is the objective to show that value chains of food products which are strongly related to nature and landscapes are a venue to go under multi-functionality for BD. The issue addressed is to offer a BD which creates WTP in value chains and serves as source of finance for BD provision. Hereby, the public is represented by an ecological management. We will primarily provide an analytical framework which merges public good provision theory with farm behavior modelling as well as draws on modeling of bargaining as solutions from social power theory. Provision is set by valuing through BD management and foods contain ESS by which the value chain improves at private good markets. Food is marketed through a special value chain and consumers help to finance public management of ESS. We distinguish the process of public preference formation from those of individual formation and can reckon a concept of social power. 1. An introduction to preference detection highlights the need for a public approach. 2. Interest group preferences are modeled. 3. A manager will be entitled to charge fees to beneficiaries and guarantee compensations. 4. Bargaining for BD indicating ESS is outlined.