Multifunctionality: The Policy Implications

by OECD Organisation for Economic Co-operation and Development

Building on the path-breaking work " Towards an Analytical Framework," this report takes the subject a step further. It attempts to guide policy-makers to the best possible decisions taking account of the multifunctional character of agriculture. The guiding principle, as in the earlier work, is that considerable rigour is required if optimal solutions are to be identified. Careful definition, quantification and monitoring are required at all stages in the process of analysing and implementing effective policies.

Policy-makers and analysts are supplied with a series of detailed questions which will help determine whether government intervention is required and, if so, what the nature of that intervention should be. Recognising that the information needs can be considerable, the report suggests procedures to be adopted when the data are unavailable or unreliable. Equity and stability aspects of the proposed solutions are also explored. It is emphasised that the international consequences of domestic policy choices should also be included in the overall reckoning of costs and benefits of specific actions.

Finally, decision makers are encouraged to apply the suggested procedures at the appropriate national, regional or local level. Only then will it be possible to move beyond arguments that support long-established positions towards policy actions that are optimal in terms of the supply of both commodity and non-commodity outputs, and that minimise both negative domestic effects and distortions of global markets.


Further reading
" Towards an Analytical Framework," OECD, Paris, 2001

108 pages, Paperback

First published February 9, 2003

About the author

The Organisation for Economic Co-operation and Development (OECD) is an intergovernmental economic organisation with 35 member countries, founded in 1961 to stimulate economic progress and world trade. It is a forum of countries describing themselves as committed to democracy and the market economy, providing a platform to compare policy experiences, seeking answers to common problems, identify good practices and coordinate domestic and international policies of its members.

In 1948, the OECD originated as the Organisation for European Economic Co-operation (OEEC), led by Robert Marjolin of France, to help administer the Marshall Plan (which was rejected by the Soviet Union and its satellite states). This would be achieved by allocating American financial aid and implementing economic programs for the reconstruction of Europe after World War II. (Similar reconstruction aid was sent to the war-torn Republic of China and post-war Korea, but not under the name "Marshall Plan".)

In 1961, the OEEC was reformed into the Organisation for Economic Co-operation and Development by the Convention on the Organisation for Economic Co-operation and Development and membership was extended to non-European states. Most OECD members are high-income economies with a very high Human Development Index (HDI) and are regarded as developed countries.

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