Cost-benefit analysis of multifunctional agriculture in Finland

Abstract

This study aims at assessing the costs and benefits of multifunctional agriculture, and it is one of the very first studies using a quantitative approach to this new subject. The starting point is that if current farm subsidies are regarded as means to maintain the multifunctional characteristics of agriculture, what happens if subsidies are reduced. The effects of the decline in agricultural support on multifunctional characteristics of agriculture in Finland are estimated using the cost-benefit analysis (CBA). Only a part of the consequences can be assessed by the CBA due to lack of data on the economic value of many elements of multifunctional agriculture. Hence, the results should not be generalised too strongly, but they still provide useful information for the political decision-making. Concerning further research, we should study, inter alia, what the so-called correct level of compensation for the adequate supply of public goods would be, and what kind of means of agricultural policy are the most efficient to unambiguously enhance the multifunctional character of agriculture.

No-till technology: benefits to farmers and the environment? Theoretical analysis and application to Finnish agriculture

“…where N i is defined in equation 14and P i is the sum of equations (16a) and (16b) and R is the constant social marginal damage. For the social value of runoff damages we can only derive a rough estimate from the works of Aakkula (1999) and Yrjölä (2004).…”

Policy assessment of an EU wide flat area CAP payments system

“…The primacy of the Common Agricultural Policy (CAP) stems from the desire, after World War II, for greater economic integration of Europe and a related requirement to establish food security in post-war Europe (Tracy, 1997;Ritson and Harvey, 1997). Since its origins the CAP has been moulded through successive reforms resulting from constant internal and external pressures (Yrjölä and Kola, 2001;Garzon 2006;Swinnen, 2008) such as domestic budgetary problems and international trade negotiation obligations (Swinnen, 2008;Cunha and Swinbank, 2009).…”

Valuing nature: lessons learned and future research directions

“…In the future a reorientation of subsidy regimes could foster the concept of "multi-functional agriculture" (OECD, 2001). Estimates of multifunctional values per hectare are not yet available, but according to Yrjölä and Kola (2001) a 30% reduction in agricultural subsidies in Finland, rather than a redirection, would decrease multifunctional benefits to such an extent as to result in a social welfare loss.…”