SEB - ecn275 - Natural resource and environmental economics

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Public goods in agriculture

Overview of issues: European Network for Rural Development (2020): Public goods and public intervention in agriculture (an overview note on issues).

There are two notes available on this topic with contrasting findings:

  1. Romstad (2009) shows that in a multi-product production framework and where the only rational allocation is where there is a negative tradeoff between the market commodity and public good, price supports produce larger distortions than direct payments for the public good.

  2. Vatn (2002) argues that under positive jointness and positive transaction costs, one can achieve the same level of public goods provided at lower costs than using direct payments for the public good.
These notes should be referred to as:

Romstad, E. (2009): Ambiguous jointness and multifunctionality, Paper presented at the IAAE congress, Bejing. Department of Economics & Resource Management, Norwegian University of Life Sciences, Ås, Norway [http://arken.nmbu.no/~eiriro/ecn275/notes/romstad-MF-amb.pdf as of January 18, 2021].

Vatn, A. (2002): Multifunctional agriculture: some consequences for international trade regimes. European Review of Agricultural Economics, 29:309-327. [http://erae.oxfordjournals.org/cgi/reprint/29/3/309 as of January 18, 2021].

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Last updated: 18.01.2021  
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