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A rural landscape with renovated farm buildings and grazing livestock ranks high on Finns' list of preferences. Such demand provides an interesting opportunity to create landscapes on the basis of a commercial approach: residents of rural areas could purchase a landscape service from landowners.

In her thesis written for the Natural Resources Institute Finland and funded by the Maj and Tor Nessling Foundation, Ioanna Grammatikopoulou, MSc, studied demand for ecosystem services such as rural landscapes. Would people purchase landscape quality aspects within their living environment and would landowners be prepared to offer such services on a commercial basis?

Around 70 per cent of the participants in the study were of the opinion that the landscape could be improved through a local management programme, in which they could participate by paying a landscape management fee. The valuation of a cultivated landscape and willingness to pay for the landscape in particular were increased by livestock grazing outdoors and well-maintained farm buildings.

"However, a range of groups exist who value different landscape properties. Some people value the preservation of a cultivated landscape, while others favour the natural development of the landscape and further groups believe that landscape management should not incur costs. These differences in preferences may make it more difficult to implement a landscape value trade," Grammatikopoulou reflects.

Landowners were not enthusiastic about participating in the commercial production of ecosystem services. They would prefer to offer landscape features in lower demand amongst local residents, such as keeping field landscapes cultivated. However, a cost-benefit analysis revealed that, when measured in terms of people's willingness to pay, the benefits of the landscape programme outweighed the costs.

The thesis also explored means of market-based avoidance of the drawbacks of eutrophication caused by agriculture. It became clear that the willingness of farmers to participate in agri-environmental auctions was strongly connected to curiosity about this novel policy.

Will ecosystem services be secured with the help of the market?

The agrarian environment is an ecosystem transformed and maintained by people, which creates a range of benefits but also produces drawbacks for the surrounding natural ecosystems. Traditional environmental policy regarding agriculture has been criticised as inefficient. Market-based mechanisms or target-based policies have been proposed as a means of guaranteeing the effective provision of ecosystem services.

The ecosystem services examined in this thesis – landscape and water quality – play important roles in the development of agri-environmental steering in Finland.

"Empirical results provide information for use in the planning of market and target-based policy measures in the coming years. Furthermore, positive experiences of pilot projects are essential to the success of new kinds of policy," Ioanna Grammatikopoulou adds.