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Let’s
change multifunctionality!
Anthony
Aumand, Tristan Le Cotty Institut national de la recherche
agronomique (INRA), and Tancrède Voituriez, CIRAD
As currently used as an argument in negotiation
to defend national preference, multifunctionality is not convincing.
Judgement of the fairness of agricultural policies and the definition
of the provision of public agricultural goods will make it possible
to establish the idea.
 ultifunctionality
is a term used recently in trade negotiations to refer to what
has always existed in agriculture. Multifunctionality, understood
as being all the public goods produced in relation with agricultural
activity and that are difficult to reproduce without it, has always
been a feature of agriculture. It contributes to regional development,
rural employment and the social fabric of rural areas, agricultural
aspects of the environment, the conservation of soils, water and
landscapes, agricultural aspects of biodiversity and non-market
aspects of food security. These public goods or non-market functions
of agriculture have always had social value. However, the coming
liberalisation of agricultural economies risks calling into question
the sites of production of agricultural products - this is its
objective - and hence the public agricultural goods associated
with production. Do these public goods justify today the development
in trade discussions of the idea of the multifunctionality of
agriculture that would result in the maintaining of certain types
of production in the national territory rather than elsewhere?
The multifunctionality of agriculture
is based on a clearly valid economic concept that calls certain
aspects of free trade into question, but doubtless for other reasons
than those mentioned in agricultural negotiations, marked by a
desire to conserve existing policies without making a distinction
between production modes that generate public goods and the others.
For many people, national preference results from a desire for
domestic production and justifies the affirmation of the state
(or the region) in the face of multilateral disciplines, and multifunctionality
in negotiation is used as a polite way of defending a national
preference in general. This multifunctionality does not contribute
anything conceptual to the discussion; it just delays the moment
of movement towards free trade and delays the redistribution of
market shares. In particular, it prevents Europeans from learning
to distinguish between sustainable modes of production and the
economic instruments that truly encourage changes in the dominant
production modes. It does not allow emphasis on the types of agriculture
that generate public goods and does not therefore allow better
reform of the common agricultural policy. As long as multifunctionality
serves to defend national preference - for all products - the
southern countries and agri-exporters are right to doubt its validity
in negotiations.
Whence the question raised by the Organisation
for Economic Co-operation and Development, based on a recent broad-based
study on multifunctionality: is it necessary to have public multifunctionality
goods (environment, employment, landscape, food security, etc.)
produced by agriculture?
If one day France no longer produces
beef at grass, many citizens will have the impression that they
are losing more than a sector of national production, even if
the public authorities attempt to reproduce the non-market functions
of rearing beef at grass without beef rearing. There are reasons
for preferring the simultaneous production of several goods and
services when there is complementarity between them. In the northern
countries, the public goods associated with agricultural production
are rural employment (if one agrees that a job is of greater value
in a less densely populated zone), the environment (some types
of agriculture contribute to improving the environment in comparison
with what the land use would be without this animal husbandry,
or even in absolute terms in the case of soil depollution, etc.),
regional development, biodiversity, etc. Other agricultural practices
can lead to the destruction of the same public goods, e.g. according
to the degree of intensification. But when the production mode
serves one of these functions it usually serves the others because
of their complementarity.
Agricultural multifunctionality is very
different for the southern countries and is mingled with the production
activity itself. The justification of public intervention in agriculture
in the name of multifunctionality is much more direct and immediately
legitimate. The many failures of institutions and markets in developing
countries are often such that the very idea of a public good associated
with agricultural products might seem absurd. The danger of a
quick march towards free trade would therefore be above all that
of a weakening of production sectors that have never been truly
market-centred but that form part of the possible development
of developing countries. It is here that the idea of integrating
on-farm consumption in the non-market functions of agriculture
in developing countries can have a certain value in trade discussions.
However, the fact that agriculture generates
social or environmental benefits is not sufficient to justify
protection and support for the entire agricultural sector. A theoretical
manner of justifying an agricultural policy in the name of multifunctionality
could be expressed as follows: the total benefits related to intervention
must be greater than the total losses, including those suffered
by third countries. Thus, in particular in the case of a strong
link between an agricultural product and a public good (i.e. one
cannot be produced without the other or it is more expensive to
produce the two separately than together), when the public goods
associated with the agricultural product are numerous and when
taxpayers’ consent to pay for these goods is strong, it may be
better to support the production of the agricultural product in
question than to provide targeted funding for the production of
each public good. If the balance is globally positive but causes
losses to the exporting countries, their loss of earnings could
possibly be the subject of compensation by the interventionist
country.
Now, by classifying internal support
according to its (supposed) trade distortion effects, the present
legal framework of the WTO allows the use of targeted, decoupled
budgetary support for agricultural production in order to ensure
the provision of public goods. In the northern countries, this
framework does not always make it possible to satisfactorily reform
agricultural policies in such a way as to encourage the production
of these accompanying public goods with the least cost for the
community. In developing countries, the limits lie in both the
budget weaknesses of these countries and in the multiple failures
of agricultural markets, in particular when the agricultural sector
represents a large proportion of total employment or when own
consumption is dominant in the food security strategy of households.
Not only does the present legal framework
not allow the use of instruments that might be legitimate in the
name of multifunctionality, but it is also incapable of regulating
the harmful use of ‘clean’ instruments or instruments whose harmfulness
for trade has not been clearly demonstrated at the WTO (food aid,
export credits, etc.). This is why we defend a broader legal framework
that would make it possible to appraise the multilateral effects
of agricultural policies not only according to the type of instruments
used but also according to a ‘code of use’ of the instruments
in today’s three boxes, that is to say a ‘code of conduct’ for
agricultural policies.
The question currently being negotiated
at the WTO is that of the degree of free trade that it is legitimate
to impose at the multilateral level to ensure honest trade without
going too far in calling into question a certain national preference.
We feel that the right question would concern the degree of fairness
that it is legitimate to impose at the multilateral level without
going too far in calling into question a certain capacity of states
to provide public goods according to national preferences. Firstly,
because nothing shows that free trade is the right way of introducing
fairness in trade. And then because the right reason for revising
the disciplines of the WTO in the name of multifunctionality is
probably not the defence of national preference but the supplying
of agricultural public goods.
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At
the time of the redaction of this article, Anthony
Aumand and Tristan Le Cotty both belonged to INRA.
This is not the case anymore nowadays.
Tancrède
Voituriez, for his part, is still working for CIRAD.
Their works,
both collective and indidual, on the same theme are available
on the site of the Cahiers de la Multifonctionnalité
http://www.inra.fr/sed/multifonction/cahiersMF.htm
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