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Lookup NU author(s): Emeritus Professor David Harvey
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Multi-functionality is a currently fashionable argument, at least within the EU, for continued support of the farming sector. However, there is a very substantial danger that this argument will be used, and be seen to being used, as a façade for traditional support and protection. If so, then the current trend towards liberalised agricultural markets, on which much of the developing world depends, will be frustrated, at least de facto of not de jure. Nevertheless, there is a substantial kernel of truth in the multi-functional argument - farming does matter to many cultures and communities over and above its marketable surplus and the incomes so generated. It follows that any negotiations aimed at liberalising agricultural trade have to take these arguments seriously. To do so requires that the critical elements of the debate be widely understood. This paper has outlined these critical elements. Despite the apparent attraction, the policy of production-related payments to farmers cannot be justified as payments for multi-functional provision. Indeed, such payments are just as likely to reduce the multi-functional performance of the industry. The paper argues that there are ways in which quasi-market systems can be employed to correct for the market failures and deficiencies implicit in the notion of multi-functionality. In particular, conservation, amenity and recreation trusts can be used effectively to resolve the twin difficulties of proper public valuation of agriculture's provision of public goods and externalities and of appropriate and effective delivery of care (conservation, amenity, recreational and environmental) goods. The paper further argues that proper compensation to existing supported farmers is a necessary, justified and separate condition for policy reform. To muddle and confuse multi-functionality with compensation, as is apparent in much of the rhetoric, if not analysis surrounding multi-functional reform proposals, is to seriously threaten agricultural trade liberalisation, without any offsetting benefits of improving the multi-functional performance of the industry. It would be a pity if the trend towards more liberal trade in agriculture is frustrated by ill-considered attempts to cope with the obvious and legitimate multi-functional aspects of the industry, and by confusion between this requirement and the requirement for proper compensation for policy-induced losses in asset values.
Author(s): Harvey DR
Publication type: Article
Publication status: Published
Journal: World Economy
Year: 2003
Volume: 26
Issue: 5
Pages: 705-725
Print publication date: 01/05/2003
ISSN (print): 0378-5920
ISSN (electronic): 1467-9701
Publisher: Wiley-Blackwell Publishing
URL: http://dx.doi.org/10.1111/1467-9701.00543
DOI: 10.1111/1467-9701.00543
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