<p>We surveyed smallholder farmers about their perceptions of the usefulness of environmental services (ES) and the relative appeal of contracts linking payments either to land management (input-based) or to the provision of ES (output-based). We conducted interviews in Mato Grosso across three highly biodiverse biomes: the Amazon rainforest, the Cerrado savannah, and the Pantanal wetland. The results indicated that the range of ES deemed beneficial was limited, focusing solely on services that directly support agricultural production. Interviewees considered wild animals to be less significant or even harmful; however, most respondents viewed forests as sources of ES and expressed interest in participating in forest conservation or reforestation to enhance the provision of these services, despite deforestation and forest degradation having reached higher levels locally. Regarding agri-environmental schemes, rewarding outputs from ES, rather than reducing agricultural inputs, seemed less attractive due to increased and unwanted exposure to the land management practices of neighboring farmers. These subjective perceptions aligned with objective evidence concerning local water scarcity, the benefits and drawbacks associated with wildlife, and experiences with input-based regulation and reforestation. Our findings suggest that agri-environmental schemes could be more effective if designed democratically, considering smallholders’ perceptions of ES.</p>