Land use change and a shift in economic activity often bring to unpredictable consequences for local ecosystems. There is a necessity of making preliminary evaluation and analysis of comparing the different types of economic and ecological transformation, including cost and benefit analysis, not only for business and local population, but for the whole environment. We give an example of a particular animal husbandry farm in Karelia and show how potential change in economic specialization can be effective on a 10 years horizon. Among other land use types, we chose peat mining and wetland conservation. Each type of activities was complexly evaluated with different types of costs and benefits. In the paper, we use a method of land use change evaluation including the value of ecosystem services. The monetary values of ecosystem services are given with the respect to foreign analogues and taking into account local realities and prices. Our results have shown that the most beneficial for the society and the environment is wetland conservation, due to their berries picking service, which are highly appreciated on the market, and due to low costs for the third parties, since wetlands contain regulative and refinery services for local ecosystems. As a contrary peat mining is a profitable business, but pollutes the environment because of carbon emissions into the atmosphere. The current specialization for animal husbandry is neither an optimal solution because of low profitability of the chosen farm. The results of the research can be used for optimization in regional politics in the sphere of agriculture and environment economics in order to protect the ecological balance between human activities and nature.

In the study, we assess the land resources as an input in agriculture. The research’s novelty is in defining a new role of the land resources’ quality in modern scientific developments at the interface of economics, soil science and ecology. This allows studying the economic consequences of the land mismanagement or soil degradation. Historically, economic analysis has unfairly dropped the studies of the land resources’ quality in the second half of XIX century, focusing on the returns from other factors of production. However, recently a scientific trend has emerged that aims to study the interactions between the land resources’ quality and the economy in general and its branches (especially agriculture) in particular. We applied the obtained methodological findings in the agro-economic research of the degradation of lands in Belgorod oblast. We hypothesised that the soil degradation negatively affects not only the volumes of crop production, but also the total farms’ revenues from all kinds of activities. For assessing the parameters, we used three different variants of the linear and logarithm production function, considering various sets of data. The first variant was in absolute terms. The second and third variants were dependent and independent variables normalised to the area of agricultural land and the capital, respectively. In every case, the soil erosion indicator negatively affected the revenue. The indicator was statistically meaningful with the elasticity less than 1. It means that 1% growth of the eroded agricultural land in Belgorod oblast leads to 0.3 % decrease of agricultural revenues. At the same time, the revenue’s elasticity per area of agricultural land is only 0.2, meaning that the land resources’ quality plays a more important role than the land area.