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Multifunctional Agriculture and the Preservation of Environmental Benefits

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  • Werner Hediger
  • Bernard Lehmann

Abstract

We investigate environmental aspects of agriculture from a welfare economic perspective and show that both positive and negative effects exhibit the character of undepletable externalities. To internalise these externalities while taking equity concerns into account, we propose compensation of farmers and forest managers according to the marginal external benefit of their land and a combination of charges and subsidies to improve rural water quality. This is consistent with efficiency requirements, would not cause additional market distortions, and leave the property rights on the land with the farmers while assigning the right on clean air and water to the consumers.

Suggested Citation

  • Werner Hediger & Bernard Lehmann, 2007. "Multifunctional Agriculture and the Preservation of Environmental Benefits," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 143(IV), pages 449-470, December.
    • Handle: RePEc:ses:arsjes:2007-iv-4
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    References listed on IDEAS

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    Cited by:

    1. Hediger, Werner, 2008. "Agriculture’s Multifunctionality, Sustainability, and Social Responsibility," 82nd Annual Conference, March 31 - April 2, 2008, Royal Agricultural College, Cirencester, UK 36854, Agricultural Economics Society.
    2. Xin Yang & Fan Zhang & Cheng Luo & Anlu Zhang, 2019. "Farmland Ecological Compensation Zoning and Horizontal Fiscal Payment Mechanism in Wuhan Agglomeration, China, From the Perspective of Ecological Footprint," Sustainability, MDPI, vol. 11(8), pages 1-15, April.
    3. Stefan Mann & Laure Latruffe & Werner Hediger, 2010. "On labour productivity to deliver private and public goods –the influence of off-farm income," Working Papers SMART 10-09, INRAE UMR SMART.
    4. Werner Hediger, 2013. "From Multifunctionality and Sustainability of Agriculture to the Social Responsibility of the Agri-food System," Journal of Socio-Economics in Agriculture (Until 2015: Yearbook of Socioeconomics in Agriculture), Swiss Society for Agricultural Economics and Rural Sociology, vol. 6(1), pages 59-80.

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    More about this item

    Keywords

    agriculture; externalities; land allocation; multifunctionality; property rights;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources

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