Mitigating Farmland Biodiversity Loss: A Bio-Economic Model of Land Consolidation and Pesticide Use

Abstract: Biodiversity loss driven by agricultural intensification is a pressing global issue, with significant implications for ecosystem stability and human well-being. Existing policy instruments have so far proven insufficient in halting this decline, which raises the need to explore the possible feedback loops that are pivotal to ecosystem degradation. We design a minimal integrated bio-economic agent-based model to qualitatively explore macro-level biodiversity trends, as influenced by individual farmer behavior within simple decision-making processes. Our model predicts further biodiversity decline under a business-as-usual scenario, primarily due to intensified land consolidation. We evaluate two policy options: reducing pesticide use and subsidizing small farmers. While pesticide reduction rapidly benefits biodiversity in the beginning, it eventually leads to increased land consolidation and further biodiversity loss. In contrast, subsidizing small farmers by reallocating a small fraction of existing subsidies, stabilizes farm sizes and enhances biodiversity in the long run. The most effective strategy results from combining both policies, leveraging pesticide reduction alongside targeted subsidies to balance economic pressures and consistently improve biodiversity.