Economic Evaluation of the Selected Ecologically Significant Element in Agriculture

Ivo Horák and Petr Marada
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Petr Marada: Department of Agricultural, Food and Environmental Engineering, Faculty of AgriSciences, Mendel University in Brno, Zemědělská 1, 613 00 Brno, Czech Republic

Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 2022, vol. 70, issue 4-5, 295-306

Abstract: Ecologically significant elements are essential not only for the development and quality of life in rural areas, but also for agricultural management. Services provided by these ecosystems ensure water retention in the landscape, a protection against erosion and an increase in biodiversity. In the context of current political debates, the importance and necessity of highlighting the value of ecologically significant elements is desirable from the farmer's point of view. This study inquires into costs and benefits while implementing a selected ecologically significant element - landscaping orchard in an agricultural area, taking into account not only the explicit benefits that could be marketed, but also the benefits floating from the ecosystem services. The case study found out that whilst complying with the general conditions to be able to apply for the State subsidies with the value of ecosystem services, the Net Present Value is positive for the given project. The monetary value of ecosystem services provided by the given landscaping orchard is estimated to be, according to Ecosystem Services Valuation Database (2020), 125 thous. CZK.year-1 per 1.6 ha. That is a considerable amount which should be noted not only by the farmers but also by the policy makers who should reconsider the subsidies for farmers and pay more attention to their financial needs.

Keywords: agriculture; extensive orchards; ecology; ecosystem services; valuation; cost-benefit; environmental economics (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:mup:actaun:2022.022

DOI: 10.11118/actaun.2022.022

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