Well-targeted monetary incentives to farmers can help protect the environment and address concerns about climate change, biodiversity loss and water scarcity.
The farm sector can sequester and store over two billion tonnes of carbon in 50 countries till 2012, when the tenure of the present Kyoto pact on climate change comes to an end.
Payments to farmers in the form of subsidies tend to encourage the production of food, fibre and biofuels, under-valuing the beneficial services that the farmers can render in fields such as carbon storage, flood control, water conservation and biodiversity protection.
This has been stated in the Food and Agriculture Organisation's annual publication 'The State of Food and Agriculture - 2007'. "Farmers can provide better environmental outcomes, but they need incentives to do so," the report maintains.
Agriculture can play an important role of carbon 'sink' through sequestering and storing green house gases, chiefly as carbon in soils, plants and trees.
"Less deforestation, planting of trees, tillage reduction, soil cover increase and improved grassland management could, for example, lead to the storage of more than two billion tonnes of carbon in around 50 countries between 2003 and 2012", the report points out.
Well-designed payments for environment services can motivate the farmers to change land-use practices and make farming more environment-friendly.
The payments can be made directly by the governments to the producers or indirectly by enabling consumers pay extra for the products produced through environmentally safe techniques, such as shade-grown coffee beans, the report suggests.
"Hundreds of payment programmes for environmental services are currently being implemented around the world, mainly as part of forest conservation initiatives. But relatively few programmes for environmental services have targeted farmers and agricultural lands in developing countries", the report said.
"Agriculture employs more people and uses more land and water than any other human activity. It has the potential to degrade the earth's land, water, atmosphere and biological resources or, conversely, enhance them, depending on the decisions made by more than two billion people whose livelihoods rely directly on crops," FAO director-general Jacques Diouf said in his foreword to the report.
Factors like population growth, rapid economic development, increasing demand for biofuels and climate change are putting environmental resources under pressure throughout the world.
This pressure is bound to increase as the agriculture will be expected to feed the world population that is anticipated to increase from the present six billion to nine billion by 2050.
The environment protection payments, if properly designed, might benefit many of the over one billion poor people living in fragile eco-systems in the developing countries, said another FAO official. This would, however, require careful targeting and monitoring, he added.
