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Abstract

Political procedures aimed at solving conflicts of agriculture and the environment are becoming increasingly important. In contrast to previous research, property rights solutions are regarded as inappropriate to solve the conflicts between farming and nature conservation due to transaction costs. The political process is considered as a substitute for market transactions in an agri-environment being a public good and advised as an ecological main structure (EMS). The paper addresses the problem by introducing a public manager who is responsible for the provision of an ecological main structure. It applies a political economy model of social bargaining, shows how a tragedy of the commons problem may prevail in field margin provision, and outlines a social optimum for an EMS. Finally, it provides for a solution to the problem of establishing socially acceptable rules for individuals in a political economy framework. In that solution farmers’, environmentalists’, and a manager’s interests are considered simultaneously and the paper provides for a unified solution on the basis of a derived public objective function.

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