Multifunctionality: Environment versus Rural Viability in Social Optima
We examine policy implications of including rural viability to the notion of multifunctional agriculture. We assume that rural viability refers predominantly to the number of people living in rural areas to keep the infrastructure and living conditions at good state for a good life. The economic core of viability is employment in agriculture and agriculture serving sectors. Viability benefits are modelled with the help of a viability valuation function. We demonstrate that rural viability entails adjusting fertilizer tax and buffer strip subsidy below their environmental first-best Pigouvian levels to reflect the direct and indirect employment effects of agricultural production. Moreover, when non-agricultural land use is present, an additional, non-agricultural instrument is needed to adjust the amount of land allocated to agriculture to its socially optimal level. Thus, inclusion of rural viability creates distortions in multifunctional policies. Theoretical results are illustrated with Finnish data to examine how the inclusion of rural viability to multifunctionality relates to the true socially optimal agri-environmental multifunctionality. We also assess welfare loss from promoting rural viability in the case where there is no base on viability benefits.
Volume (Year): 32 (2009)
Issue (Month): 2 (June)
|Contact details of provider:|| Postal: 4-102 Hoigi-Dong Dongdaemoon-Gu, Seoul 130-710|
Web page: http://www.krei.re.kr/eng/index.php
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ags:jordng:90683. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.