Empirical research has documented that in harsh, isolated environments where climatic and soil conditions are variable, farmers may depend on the cultivation of multiple crops and varieties to meet their food and cash needs. For farm households to be food secure, they require stable supplies for consumption from either their own production or market purchases.

As markets develop, farm households generally specialize in fewer products oriented toward the demands of distant consumers, relying less on a portfolio of crop varieties and more on a portfolio of income sources to smooth their consumption. Yet, those in isolated areas continue to face heavy transactions costs because they have limited and uncertain options for buying and selling in markets. They have a "demand" for crop biological diversity1 that is derived from the range of production traits and consumption attributes they require. Cultural autonomy may reinforce this demand through shaping the preferences of rural people for the food they consume, their perceptions of crop biological diversity, and its importance.

Managing the biological diversity of crop genetic resources on farms is of economic importance in part because it is a survival strategy for some of the world's rural poor. Conserving these resources on farms also reduces the loss of potentially valuable alleles in genetic stocks still held by farmers. Geneticists often hypothesize that rare, locally adapted genotypes may be found among the landraces2 cultivated by farmers in such extreme or heterogeneous environments. Some genotypes are thought to contain tolerance or resistance traits that are not only valuable to the farmers who grow them but also to the global genetic resource endowment on which future crop improvement depends. Rare alleles are often discovered in centers of origin, though depending on the crop, valuable diversity can often be found elsewhere.

Genetic resources are renewable assets, but are renewed in farmers' fields only as long as farmers continue to sow the seed. When farmers replace "landraces" with "modern varieties" that may be more attractive to them as their economies industrialize, the gene combinations in landraces may be "lost" to future generations of farmers and consumers unless special efforts are made to collect them or encourage their continued cultivation.

Since the 1970s, large numbers of landraces and wild relatives of cultivated crops have been sampled and stored in ex situ gene banks. An alternative form of conservation in situ has also received some scientific attention (Brush, 2000; Maxted, Ford-Lloyd, and Hawkes, 1997). For cultivated crops, conservation of genetic resources in situ refers to the continued cultivation and management by farmers of crop populations in the

1 The biological diversity of crops encompasses phenotypic as well as genotypic variation, including cultivars recognized as distinct by farmers and varieties recognized as genetically distinct by plant breeders.

2 Generally, landraces are considered to be relatively more heterogeneous plant populations selected and adapted by farmers over generations, as compared to relatively more uniform, stable modern varieties bred by professional plant breeders.

agroecosystems where the crop has evolved (Bellon, Pham, and Jackson, 1997). Storing genetic resources in collections as backup seed stocks in ex situ collections therefore substitutes imperfectly for the evolution of crop plants in the fields of farmers.

Not only do genetic resources evolve differently when conserved ex situ and in situ, but the distributions of their economic benefits and costs also differ fundamentally. The costs of genetic resource conservation in gene banks are now borne largely by public investments, and consumers (as well as farmers who are consumers) benefit indirectly from the genetic resources incorporated into improved crop varieties when output expands and prices decline. In contrast, both the costs and benefits of conserving genetic resources in situ are felt directly (and in a very immediate sense) by the farmers who grow them.

To suggest that some of the poorest farmers of the world should shoulder the full burden for conservation of crop biodiversity seems inappropriate. For this reason, international agreements such as the Convention on Biological Diversity and the International Treaty on Plant Genetic Resources for Food and Agriculture encourage the design of benefit-sharing schemes to support conservation through rewarding farmers for their innova-tions— though mechanisms for doing so are still under discussion. National and local policy instruments that promote development and farmer management of crop biological diversity may also be feasible. A "win-win" policy solution occurs when crop biodiversity is maintained on farms for the benefit of future generations, while farmers themselves benefit today from a wider set of crop variety attributes for consumption or sale. Under those circumstances, private and social benefits coincide.

This chapter begins by reviewing how economic concepts can assist in identifying promising locations for on-farm management of crop biological diversity, supported by some findings from empirical analyses. Next, some of the policy mechanisms that have been invoked to support farmers in such locations are discussed and, where possible, evidence regarding their effectiveness is presented.

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