In this paper we critically assess the potential of markets to
provide adequate incentives for agricultural landowners to
produce ecosystem services. In doing so, we address the interrelated
issues of measurement and valuation of ecosystem
services and of using markets as a tool for organizing the supply
of these services to and from agricultural landscapes. We begin
by presenting an economically useful definition of ecosystem
services. We then briefly review some general quantitative
trends in the provision and appropriation of ecosystem services
and the driving forces behind the widespread loss of many ecosystem services. Next, we briefly examine why market-based
approaches to the provision of ecosystem services are
gaining in popularity, and survey the different types of such
approaches in existence today. We discuss the principal
challenges and opportunities associated with using market-based
approaches for ecosystem service management, and
explore their potential in agricultural landscapes.