Same public goods can only be produced jointly with private goods. This paper focuses on the biological diversity that could be produced on semi-natural pastures through the assistance of grazing animals. The question that is being investigated is what shapes the total and marginal cost functions for biological diversity production on semi-natural pastures have if private goods are already being produced using livestock at farms near the pastures. The empirical analysis shows that a quadratic function describes the costs well and that the production is characterized by increasing marginal costs.

In Lithuania, as well as throughout Europe, the areas of natural meadows and pastures are gradually decreasing due to the intensification of agriculture, leading to the ploughing of meadows and the consequent loss of valuable biodiversity, a crucial component of the landscape. The problems associated with meadow and pasture reduction is essential for informed decision-making, sustainable land management, the conservation of biodiversity and ecosystem services. Various methods, including comparative, analytical, statistical, and logical analysis, were employed in the investigation. The comparative study employed information from the Land Fund of the Republic of Lithuania covering the period from 2003 to 2023. The article also analyses the reasons and perspectives of the decrease in meadow and natural pasture areas. In 2023, meadows and natural pastures in the Republic of Lithuania covered 362,351.79 ha, constituting 5.55% of the countryʼs territory. From 2003 to 2023, the total area of meadows and natural pastures decreased by 135,439.55 hectares or 27.21%. From 2003 to 2023, in nine out of ten Lithuanian counties, the areas of meadows and pastures decreased. The most significant loss of these areas occurred in Siauliai County (36,828.33 ha or 59.02%), while the least loss was in Klaipeda County (141.05 ha or 0.34%). The decrease in meadow and natural pasture areas can be attributed to various factors: changes in land use, urbanization, climate change and other influencing factors. The area of meadows and pastures in Lithuania should increase by 87,000 hectares, and meadows and pastures in country would cover an area of 449,351.79 ha or 6.88% of the total area of the Republic of Lithuania.