Institutional Economics of Agricultural Soil Ecosystem Services

Who owns the soils? What seems to be a straightforward legal issue actually opens up a debate about the ecosystem services that can be derived from soils and the distribution of benefits and responsibilities for sustaining functioning and healthy soils. In particular, agricultural land use may be constrained by a lack of properly defined property rights. Using the new institutional economics perspective, we show that multifunctionality of soils and an attribute-based property rights perspective substantiate the intuition that land property implies special obligations towards the common good. The concept of ecosystem services can illustrate the variety of beneficiaries of multifaceted soil ecosystem services. This allows identification of reasons for unsustainable soil management that result from imperfections in the definition of property rights. We suggest implications for improved governance of agricultural soils using two case studies in the EU context: the EU Common Agricultural Policy and the use of planning instruments to steer agricultural soil use in Germany. Thus, we contribute to achieving the societal goals of more sustainable land use by detecting causes of shortcomings in current land regulation and by suggesting governance approaches to support a more sustainable management of agricultural soils.