The Economics of Agricultural Biodiversity Conservation: Incentives, Trade-Offs, and Policy Instruments
Harkesh Kumar Balai *
Faculty of Agriculture, Jagannath University, Jaipur-303901, India.
Sanjiv Kumar
Faculty of Management Studies, Jagannath University Jaipur- 302022, India.
Sarita Meena
Faculty of Agriculture, Jagannath University, Jaipur-303901, India.
*Author to whom correspondence should be addressed.
Abstract
Agricultural biodiversity conservation poses a distinctive economic problem: decisions about what to grow, breed, exchange and maintain are made largely by farmers, whereas many benefits of genetic resources, species-rich production systems and associated ecological functions are dispersed across communities, sectors and future generations. Conservation therefore cannot be understood solely as a response to biological scarcity or as an uncomplicated alternative to agricultural intensification. This critical narrative review evaluates how opportunity costs, production risk, seed-system institutions, heterogeneous preferences and public policy shape incentives to maintain agricultural biodiversity. Literature published from 1990 to 4 September 2026 was considered, with earlier foundational perspectives retained where necessary. The synthesis distinguishes crop species diversity, within-species genetic diversity, crop wild relatives and associated biodiversity because their economic mechanisms, indicators and beneficiaries differ. Evidence supports the potential of diversification to stabilise production and improve certain ecosystem services, but the size, direction and distribution of financial gains depend on context, timescale and the dimensions of diversity measured. Payments for agrobiodiversity conservation services, conservation tenders and result-based schemes can address some conservation costs, yet rigorous evidence on long-term additional genetic conservation, institutional durability and fair distribution remains limited. General agricultural subsidies, market standards and formal seed-system rules may unintentionally weaken local diversity even when their primary objectives are legitimate. The review develops an integrated policy perspective in which targeted compensation is combined with seed-network support, diverse market opportunities, genetic monitoring and the reform of countervailing incentives. Future research should prioritise credible counterfactual evaluations, longitudinal genetic indicators, distribution-sensitive cost-effectiveness analysis and tests of institutional arrangements under climatic and market uncertainty. Conservation policies are most defensible when they specify the biodiversity asset being protected, identify who bears the incremental costs, and verify additional ecological or genetic outcomes rather than equating programme participation with conservation success.
Keywords: Agrobiodiversity, conservation incentives, agricultural subsidies, crop genetic resources, conservation tenders, payments for ecosystem services, seed systems, distributional equity