Title: Multifunctionality in agriculture: externalities and non-traded goods

Authors: Andrew Schmitz, Charles B. Moss

Addresses: Faculty of Department of Food and Resource Economics, PO Box 110240, University of Florida, Gainesville, FL, USA. ' Faculty of Department of Food and Resource Economics, PO Box 110240, University of Florida, Gainesville, FL, USA

Abstract: The multifunctionality nature of agriculture has been used to justify continuing protection for the agricultural sector. The farm sector produces a variety of outputs, some of which are marketable (or tradable) and others not. Protectionism, under the guise of multifunctionality, is then justified to support the non-marketed dimensions of the agricultural sector. We examine the impacts of trade policies on the loss or gain of economic welfare caused by the divergence between social and private marginal cost. Next, we analyse how social and marginal costs are affected by the assignment of property rights and the implications of non-traded goods. Critical in each of these formulations is the magnitude and direction of the divergence between social and private marginal cost. In the USA, agriculture faces increasing regulations, recognising that agriculture produces negative and positive externalities. In this context, we examine the policy implications of multifunctionality.

Keywords: agricultural policy; externalities; multifunctionality; multifunctional agriculture; agriculture negotiations; non-traded goods; tariffs; non-trade concerns; trade policies.

DOI: 10.1504/IJARGE.2005.007460

International Journal of Agricultural Resources, Governance and Ecology, 2005 Vol.4 No.3/4, pp.327 - 343

Published online: 22 Jul 2005 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article