Journal #J-16/2003
Multifunctionality in Agriculture and its Compatibility with Globalization
Arild Vatn
Department of Economics & Social Sciences Agricultural University of Norway PO Box 5033, N-1432 Ås, Norway http://www.nlh.no/ior/ e-mail: arild.vatn@ior.nlh.no

Vatn, A. (2003): "Multifunctionality in Agriculture and its Compatibility with Globalization", Korean Journal of Agricultural History 2(1):67-91.

Abstract:
Globalization of the food industry ? not least the issue of free trade in agricultural commodities ? has caused intense debates. The paper starts by defining different positions taken in the literature concerning globalization, economic growth and its effects on environmental values. The concept of multifunctional agriculture is then defined focusing on the multiple outputs of both public and private goods. Furthermore, the various types of interdependencies between the two categories of goods are specified. On the basis of this, an analysis of different policies is undertaken given a) the various types of interrelationships between private and public goods, and b) the fact that transaction costs are positive. The analysis shows that the core technical issue in policy formulation is the trade-off between transaction costs and the precision (targeting) of a policy. For countries that are not internationally competitive in the food markets, it will thus be cost-efficient to secure required deliveries of some public goods by paying extra for the private ones ? i.e., price support and import levies. While such support cannot serve as the only type of policy measure in the defined context, the analysis shows that one global market will neither be a reasonable response to the challenges posed by multifunctional agriculture.

Key words: Multifunctional agriculture, WTO, public goods, transaction costs, import levies, price support

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