The paper examines the role of markets for ecosystem services deriving from agri-environmental and rural landscape conservation in the agri-food chain. In spite of their importance, sustainable management of agricultural biodiversity and ecosystem services conservation are only partially financed by public institutions. This paper illustrates an innovative economic tool, Payment for Ecosystem Services (PES), used as a financing mechanism to achieve positive environmental outcomes by supporting environmental friendly behavior in agri-food value chains. Our framework suggests that PES can act as a tool able to support sustainable management of agri-food value chains. In spite of financial crises, demand for ecosystem services is growing, nevertheless their supply need to be supported by innovative incentive schemes. PES could play a fundamental role in increasing ecosystem services provision. The areas for future research that seem to be the most promising include following aspects. First, we look forward to understanding the role of public intervention. Second, several insights can be gained from investigating PES implementation in agri-food value chains. The study suggests that PES schemes have a potential role to play with regards to ecosystem services conservation in agri-food value chains. The paper provides an original contribution by highlighting the role of an innovative economic instrument for financing agricultural biodiversity conservation and supporting land users for the positive externalities in agri-food value-chains.
