The European Landscape Convention signed in Florence in 2000
states that “landscape means an area, as perceived by people,
whose character is the result of the action and interaction of natural
and/or human factors”. The rural landscape can be considered
as the visual appearance of agrarian ecosystems. A close relationship
exists between the landscape and primary activities, and
landscape can be considered one of the main agriculture externalities.
During the last decades, the European Common Agricultural
Policy (CAP) evolution and innovations in agricultural technology
have vastly altered the Italian landscape. CAP strategies strongly
modified the relative prices of agricultural products, while more
capital-intensive agricultural practices required major land transformation.
Fields were enlarged and many typical land layouts
with perennial vegetation were abandoned. Hedgerows, tree plantations,
natural meadows, mulberry trees and numerous lowland
woods gradually disappeared from the plain. These changes also
increased nitrogen release and leaching. Over the same period there
has been increasing demand for outdoor recreation activities. This
demandis closely connectedto landscape features, the preservation
and creation of which is becoming more central under the reformed
CAP. Since rural landscape is an agro-forestry positive externality,
and given its nature as a pure public good, economic farm incentives
can increase social welfare.