Rural landscape and economic results of the farm; a multi-objective approach

The protection and reorganisation of rural landscape constitutes one of the main objectives in European Union agro-environmental policy. Since 1985, numerous measures have been approved with the aim of financing landscape improvement and farm reorganisation. These measures were more clearly defined in 1992, when the timing and content of landscape measures were set in the wider context of agro-environmental policy. European Union intervention was motivated by the growing imbalance between the public demand for higher landscape quality and the land transformation carried out by agriculture. On one hand, the societal and cultural changes which have occurred in the last few decades have produced a rise in demand for green (rural) areas for recreation. On the other hand, the spread of labour-saving technology in agriculture has led to an increasing simplification of the landscape and to a considerable reduction in rural landscape quality. This phenomenon can be attributed to the singular economic characteristics of landscape. In many respects, landscape represents a positive externality of agro-forest activity, which assumes the role of a public good. This therefore necessitates corrective action by the public policy maker who will have to use various means to increase the remuneration of those products which generate positive externalities. Public intervention, however, runs the risk of being transformed into welfare aid. In order to guarantee that it is used to remunerate a real service undertaken by the farmer for the benefit of the whole community, the contribution must be commensurate with the benefits produced. The objectives of this study are, first, to analyse which elements of rural landscape contribute to the aesthetic value of landscape and, second, to estimate the trade-offs between economic results of the farm and landscape quality. An application in the Venice Lagoon Basin Region allowed for the identification and quantification of compromise solutions between the landscape objective and the farm profits. These results can be used to assess the economic consequences of improving landscape quality and the suitability for this purpose of European Union subsidies.