Agricultural land plays a multi-dimensional function and role. It provides not only food and fiber, which is the important safeguard to food security of our country, but also serves as various non-market commodities with characteristics of externalities or public goods. As an ecological barrier in protecting environment, it also brings into playing more and more important ecological and landscape functions in land use planning. So agri-environmental policies (AEPs) have become one of the effective methods to protect the rural landscape and agricultural land in western developed countries. It promotes the farmers to engage in ecological agriculture or organic agriculture, circumventing the shortage of agricultural eco-environmental supply. Ecological compensation system involves suppliers, demanders, other market players, the ecosystem services and products, it is similar to the standard elements of the market. According to Provider Gets Principle (PGP), this research estimates agricultural land’s ecological compensation criteria based on the farmer households’ willingness to supply and accept, and the results have some reference for reducing the negative externalities of agriculture. Based on the empirical survey on farmer households in Wuhan area, the current research studied the farmers willingness to accept if they will be given certain compensations for reducing the use of chemical fertilizers, pesticides and other chemicals. Several conclusions can be drawn from this study. Firstly, most farmers recognize the negative impacts of fertilizers and pesticides on the agricultural land’s eco-environment. However, they stick to current practice due to the easy use and quick effects of chemical fertilizers and pesticides. Secondly, if we take the application of fertilizer and pesticide under different limits, it is a significant negative relationship between producers’ willingness to supply and application restrictions of chemical fertilizers and pesticides. About 69.32%－85.25% farmers have willingness to provide ecological services as the limitation standards were settled, namely, reducing chemical fertilizers and pesticides applications by 50% or 100%. When the chemical fertilizers and pesticides utilization reduced 50% or 100%, the amount of compensation that the farmers would accept is 3928.88－8367.00 yuan per hectare per year. Based on the simulation of the agricultural products market, about 54.29%－82.12% of the farmers have willinness to produce agricultural products according to the limit standards of utilization of chemical fertilizers and pesticides. And, farmers are willing to produce environment-friendly agricultural products when the rice’s price is higher than common agriculture products at 1.65－2.66 yuan per kilogram, which increases 42.52%－68.45%.