The economic impact of multifunctional agriculture in The Netherlands:

Abstract Multifunctional agriculture is a broad concept lacking a precise and uniform definition. Moreover, little is known about the societal importance of multifunctional agriculture. This paper is an empirical attempt to fill this gap. To this end, an input-output model is constructed for multifunctional agriculture in the Netherlands. The definition used includes four multifunctional agricultural activities: (i) green care, (ii) tourism, recreation and education, (iii) on-farm sales, and (iv) green services. Multiplier values – indicating the chain impacts of these multifunctional activities in the rest of the economy – are calculated for four Dutch regions. The results show that, in terms of output and employment, multifunctional agriculture is not a main driver for economic growth. Moreover, from the input-output model it appears that multifunctional agriculture leads in particular to more expenditures in the agricultural sector itself, rather than in any other economic sector. As such, the indirect feedback effects of multifunctional agriculture on the non-agricultural sectors in the Dutch economy are rather small. The input-output model also show that multiplier values differ over the regions, mainly due to differences in the composition of multifunctional activities. And although the absolute size of employment in multifunctional agriculture is very small, the employment per unit of output is high, especially when compared to the employment/production rate in primary agriculture.