Multifunctional agriculture and sustainable development

1. ERASMUS IP Program 19 June – 2 July 2011, SzentIstvan University, Godollo, Hungary Multifunctional agriculture and sustainable development Assoc. Professor Dr. Diana Kopeva University of National and World Economy (UNWE)

2. Structure of the presentation • The concept of multifunctionality • The concept of sustainable development • Where and how these two concepts are overlapped • Future of multifunctional agriculture • Group work

3. Multifunctionality or Multifunctional agriculture • The term “Multifunctionality of Agriculture” (MFA) covers a wide range of different perceptions in research literature today • Multifunctionality is intended to call attention to the positive “goods” that agriculture can produce beyond the food and fiber that farmers sell in the marketplace • The positive goods can be defined very widely • Important to note that the concept of multifunctionality does not imply that these goods accrue automatically, as inevitable outcomes of any and all approaches to farming • These outcomes vary widely based on farming practices, farm size, farm location (by country, ecoregion, and local environment) and interaction of these variables

4. Specific Aspects of Multifunctional Agriculture • Viable Rural Communities • Environmental Benefits • Food Security • Landscape Values • Food Quality and Safety • Animal Welfare

5. Evolution of the concept • 1992 – Rio Earth Summit – the term “multifunctional agriculture” emerged on the international stage “. . .multifunctional aspect of agriculture, particularly with regard to food security and sustainable development.” (Agenda 21, Chapter 14) • 1998 – OECD countries – expanded the idea of the Rio Earth Summit “Beyond its primary function of producing food and fibre, agricultural activity can also shape the landscape, provide environmental benefits such as land conservation, the sustainable management of renewable natural resources and the preservation of biodiversity, and contribute to the socio-economic viability of many rural areas. Agriculture is multifunctional when it has one or several functions in addition to its primary role of producing food and fibre.” (OECD Declaration of Agricultural Ministers Committee)

6. Evolution of the concept (2) • 1998 – Multifunctional agriculture and the review of the GATT Agreement on Agriculture (AoA) mandated for 1999 • Two big conferences focusing on that issue and contraversial opinions • November 1999, FAO Conference “The Multifunctional Character of Agriculture and Land”, Maastricht, The Netherlands <http://www.fao.org/docrep/meeting/X3577e.htm> • July 2000, conference on Non-Trade Concerns (NTCs) in Agriculture held in Ullensvang, Norway <http://www.prosi.net/press8.htm>

7. Evolution of the concept (3) • OECD Definition • FAO concept • EU concept

8. What is agrarian multifunctionality Two domains of agrarian multifunctionality: • a) The analytical one or activity oriented concept (OECD): It describes the characteristics of farm production, the outcomes from land uses and the joint-production, focusing on these relationships • b) The normative domain or policy-oriented concept (FAO and EU): It is considered as a policy instrument of rural development

9. Two approaches to the analysis of Multifunctionality: • MF as a characteristic of economic activity - the particular characteristic that makes an economic activity multifunctional are its multiple, interconnected outputs or effects • MF interpreted in this way is not specific to agriculture • This view can be termed the positive concept of MF • MF in terms of multiple roles assigned to agriculture • Agriculture as an activity is entrusted with fulfilling certain functions in society • MF is not merely a characteristic of the production process, it takes on a value in itself • This view can be termed the normative concept of MF

10. Positivistic/activity oriented/analytical concept: OECD • Multifunctionality, or multifunctional agriculture are terms used to indicate generally that agriculture can produce various non-commodity outputs in addition to food • The working definition of multifunctionality used by the OECD associates multifunctionality with particular characteristics of the agricultural production process and its outputs: • the existence of multiple commodity and non-commodity outputs that are jointly produced by agriculture • that some of the non-commodity outputs may exhibit the characteristics of externalities or public goods, such that markets for these goods function poorly or are non-existent OECD, 2001

11. The nature of jointness in agriculture • Joint production refers to the situation where a firm produces two or more outputs that are interlinked, so that an increase or decrease of supply of one output affects the levels of the others • Three reasons for jointness can be distinguished: • Technical interdependencies in the production process • Non – allocable inputs • Allocable inputs that are fixed at the firm level

12. The nature of jointness in agriculture – Technical interdependencies • Many of the negative non-commodity outputs of agriculture, as of: • Soil erosion • Chemical residuals • Nutrient leaching • Greenhouse gas emissions • Problems of animal welfare • Positive non-commodity outputs: • Pest controlling effects of certain cropping patterns used in integrated pest management • Crop rotation effect on soil productivity and nutrient balances

13. The nature of jointness in agriculture – Non- allocable inputs • Non allocable inputs = multiple outputs from the same input • Eggs, poultry meat, feather • Mutton, wool, milk • Production of meat and manure • Terraced paddy fields • Alpine pastures with cows • These joint outputs are rarely produced in fixed proportions and those proportions can be modified by using different production methods • Many output linkages can be attributed either to technical or to non-allocable inputs (like food and landscape )

14. The nature of jointness in agriculture –allocable inputs • Allocable inputs are available at firm level in a fixed amount and are allocated to the various outputs in the production process • An increase/decrease in the production of one output changes the amount of the factor available for the supply of the others • Farmland and self-employed labour are allocable factors

15. Sustainable development • The most frequently quoted definition is from Our Common Future, also known as the Brundtland Report: "Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. It contains within it two key concepts: the concept of needs, in particular the essential needs of the world's poor, to which overriding priority should be given; and the idea of limitations imposed by the state of technology and social organization on the environment's ability to meet present and future needs.“

16. Sustainable Development • Meeting the needs of the future depends on how well we balance social, economic, and environmental objectives--or needs--when making decisions today Equity Participation Social Mobility Cultural Preservation Social Services Household Needs Industrial Growth Agricultural Growth Efficient use of Labor Environment Biodiversity Natural Resources Ecosystem Integrity Clean Air and Water Economic

17. Economic Sustainability • Economic policies typically seek to increase conventional gross national product (GNP), and induce more efficient production and consumption of (mainly marketed) goods and services • The modern concept underlying economic sustainability seeks to maximize the flow of income that could be generated while at least maintaining the stock of assets (or capital ) which yield this income

18. Social Sustainability • Reducing vulnerability and maintaining the health (i.e., resilience, vigor and organization) of social and cultural systems, and their ability to withstand shocks • Enhancing human capital (through education) and strengthening social values, institutions and equity will improve the resilience of social systems and governance

19. Environmental Sustainability • Modern economies have only recently acknowledged the need to manage scarce natural resources in a prudent manner – because human welfare ultimately depends on ecological services • The environmental interpretation of sustainability focuses on the overall viability and health of living systems – defined in terms of a comprehensive, multi-scale, dynamic, hierarchical measure of resilience, vigor and organization

20. Sustainable Rural Development "Sustainable development is the management and conservation of the natural resources base, and the orientation of technological and institutional change in such a manner as to ensure the attainment and continued satisfaction of human needs for present and future generations. Such sustainable development in the agriculture, forestry and fisheries sectors conserves land, water, plant and animal genetic resources, is environmentally non-degrading, technically appropriate, economically viable and socially acceptable." (FAO, 1988)

21. Scheme of sustainable development: at the confluence of three constituent parts

22. Multifunctional agriculture & Sustainable Development

25. EUROPE 2020: MFA and SD • Sustainable growth Initiative - for a resource efficient, greener and more competitive economy • Rural Development Policy – 3 axes • improving the competitiveness of the agricultural and forestry sector; • improving the environment and the countryside; • improving the quality of life in rural areas and encouraging diversification of the rural economy

26. Example : Chain of policyimplementation: Fund CAP / Programme Rural Development / Priority axis XXX / measure  XXX  / local developmentstrategy/ projet- operation Within a specific area (local area), how manyfarmers, what type of farms and wherewillbeimpacted by project - operation (s) implementation? Knowingthatfarmersactwithin a local contextwhere the behavior of otheractors (consumers, Ngos, … will have an influence on theirchoices. Consequently , necessity to know and modelizeactorbehaviors. This willbedoneat the scale of implementation of project or operation ( local scale) but withnecessity to aggregate population dynamicsatregionallevel; remenberthatwe are supposed to check resultswiththoseobtainedwithaggregatedmodels. In a second step we will have to measure the impact of population dynamics on the different functions provided by the sector. By this way we can assess the impact in terms of multifunctionality and implement or improve SIAT and other databases.

27. Food Services Production function … European level CAP/ European Agricultural Fund for Rural Development/Priorities/ Programmes National level Measures Regional level Operation /projects Impacts on Local level Cultural function Society Economy Agriculture Forestry Tourism Biodiversity Employment function Spatial function Protection function Environment Ecosystem function

28. Thank you for your attention! Associate Professor Dr. Diana Kopeva Department “Economics of Natural Resources” Business faculty University of National and World Economy Sofia diana_kopeva@yahoo.com dkopeva@unwe.acad.bg