Multifunctionality in Agriculture

Evaluating the degree of jointness, policy implications

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These proceedings examine the nature and strength of jointness between agricultural commodity production and non-commodity outputs from the perspective of three areas important to the agricultural sector: rural development, environmental externalities and food security. This workshop also examined whether the relationships among these non-commodity outputs were complementary or competing. Finally, the policy implications that could be derived from the findings of this workshop were also a key element in the discussions and are summarised in the Rapporteur’s summary.



Jointness, Transaction Costs and Policy Implications

The goal of policy measures is to ensure that the outcome of the policy is close to the desired goal, i.e. that the policy is targeted. If no costs were involved in designing, implementing and managing the policy, this would be no problem. In such a case all policy goals would be met by using one (or more) instrument for each policy goal. However, due to natural uncertainties, actions and states that are not observable, as well as the costs of implementing the policy, we need to balance the precision — how targeted the policy is — and the transaction costs of the policy. This paper will discuss these issues in situations where there is jointness.


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