Multifunctional Agriculture: A Framework and Policy Design
We study the multifunctional character of agriculture in a model of endogenous input use and land allocation augmented by biodiversity, landscape amenity, and nutrient runoff. While biodiversity and landscape amenities represent the public good aspects of agriculture, nutrient runoff represents its negative externalities. We show that the private use of fertilizer input is higher and the size of buffer strips lower than the socially optimal solution requires. Also the socially optimal land allocation differs from the private solution due to the valuation of landscape diversity and runoff damages. The optimal policy is to use a differentiated fertilizer tax and a differentiated buffer strip subsidy and to determine their levels by the equality between the net value of their marginal product in food production and their effects on the marginal valuation of diversity and runoff damage in each parcel. We characterize empirically socially optimal multifunctional agriculture and the optimal design of the policy instruments by using Finnish data.
|Date of creation:||2002|
|Contact details of provider:|| Web page: http://www.eaae.org|
More information through EDIRC
References listed on IDEAS
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.:
- Asunka, Samuel & Shumway, C. Richard, 1996. "Allocatable Fixed Inputs And Jointness In Agricultural Production: More Implications," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 25(2), October.
- C. Richard Shumway & Rulon D. Pope & Elizabeth K. Nash, 1984. "Allocatable Fixed Inputs and Jointness in Agricultural Production: Implications for Economic Modeling," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(1), pages 72-78.
When requesting a correction, please mention this item's handle: RePEc:ags:eaae02:24947. 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 references are entirely missing, you can add them using this form.