Agriculture and Ecosystem Services: Strategies for State and Local Governments

In recent years, ecologists and economists focusing on agriculture have forged a vision of agricultural lands as housing the natural capital capable of providing a stream of diverse good and services, including ecosystem services such as increased biodiversity, carbon sequestration, pollination, groundwater recharge, and improvement of water quality. This Article explores the emerging theme of farms as multifunctional land uses and suggests ways state and local governments can help ground it through flexible, efficient policy instruments. Although federal farm subsidy programs surely could be repositioned to better promote farm multifunctionality directly, the benefits of multifunctional agricultural production, compared to the conventional commodity production orientation, are primarily local. On this policy front, therefore, I envision federal policy providing support to state and local innovations rather than dominating the field as has been the case historically.Part I examines the theme of farms as multifunctional production units as it is developing in ecological literature, then examines farm policy through four guiding principles: cross-cutting regulatory approaches; trade-offs; scaling regulatory authority to the problem; and expanding the use of decentralized strategies. Part II provides a general survey of the potential future scenarios of agricultural land uses and the tools state and local policy could use to help break the logjam of agriculture-environment policy by promoting the multifunctionality of farms. My focus is on exploring how state and local land use policy can play that role with respect to the production of ecosystem services from farms, which are, after all, profoundly local in character. Part III of the Article then uses two case studies from Florida to focus on two such tools in particular - payments for ecosystem services (PES) and the transferable development right (TDR). Although distinct in several ways, including fiscal impact, the role of regulation, and the medium through which provision of ecosystem services is rewarded, these two approaches share design issues being worked out in two newly-initiated programs in Florida, as summarized in Part III.This Article makes the case that state and local policy, through PES, TDR, and similar techniques, can have a significant role to play in moving toward that vision. Federal farm policy should encourage and support such state and local initiatives, as it is in the national interest to maintain and enhance the natural capital that agricultural lands contain and can deliver locally across the landscape.