Multifunctionality And Non-Agricultural Supply Of Public Goods
AbstractWhen public goods are joint outputs of agricultural production, there is a trade-off between agricultural and non-agricultural provision of the public good. The principle of minimal price distortion in the reform of agricultural policies has led to a theoretical recommendation that public goods, if under-provided at agricultural free market level, should be promoted through non agricultural policies instead of agricultural policies. We show that the economies of scope between the agricultural production and the joint public good play a key role in determining the optimal way of providing this latter. If the policy designed is a non-agricultural policy, the production cost of the public good is higher than with an agricultural policy. If the policy designed is an agricultural policy, the production cost is lower but generates market effects. Under the assumption of strictly positive economies of scope, we show that the optimal policy is a mix of agricultural and non-agricultural policy. We confirm this result in the two-country case, demonstrating the optimal level of agricultural support for public good provision is strictly positive and lower than in the case of one country.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by International Association of Agricultural Economists in its series 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa with number 25850.
Date of creation: 2003
Date of revision:
multifunctionality; jointness; coupled support; protectionism; public good; Resource /Energy Economics and Policy;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kyle Bagwell & Robert W. Staiger, 1997.
"An Economic Theory of GATT,"
NBER Working Papers
6049, National Bureau of Economic Research, Inc.
- Moschini, GianCarlo, 1989. "Normal Inputs and Joint Production with Allocatable Fixed Factors," Staff General Research Papers 11264, Iowa State University, Department of Economics.
- Casamatta, Georges & Rausser, Gordon C. & Simon, Leo K., 2008.
"Optimal taxation with joint production of agriculture and rural amenities,"
CUDARE Working Paper Series
1068, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
- Casamatta, Georges & Rausser, Gordon & Simon, Leo, 2011. "Optimal taxation with joint production of agriculture and rural amenities," Resource and Energy Economics, Elsevier, vol. 33(3), pages 544-553, September.
- Casamatta, Georges & Rausser, Gordon & Simon, Leo K, 2007. "Optimal Taxation with Joint Production of Agriculture and Rural Amenities," CEPR Discussion Papers 6615, C.E.P.R. Discussion Papers.
- Casamatta, Georges & Rausser, Gordon C. & Simon, Leo K., 2008. "Optimal taxation with joint production of agriculture and rural amenities," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt0nv609hm, Department of Agricultural & Resource Economics, UC Berkeley.
- Huber, Robert, 2007. "Bio-Energy-A By-Product Of Rural Landscape Maintenance?," 47th Annual Conference, Weihenstephan, Germany, September 26-28, 2007 7619, German Association of Agricultural Economists (GEWISOLA).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If references are entirely missing, you can add them using this form.