`Multifunctionality' an Issue for Seattle Round

November 22, 1999

The concept of "multifunctionality" will be part of the continuing discussions of agricultural trade distortions discussed at the World Trade Organization talks in Seattle. Some countries argue that, in addition to the production of food, fiber, hides and timber, agriculture creates joint or spillover (multifunctional) benefits such as open space, wildlife habitat, biodiversity, food prevention, cultural heritage and viable rural communities. Those functions, they argue, justify exemptions for production-related domestic support.

USDA's Economic Research Service says multifunctionality proponents "claim that production-linked payments are necessary to obtain socially desired non-food benefits. Furthermore, as the multifunctionality debate has evolved, countries promoting the importance of the joint production relationship between agricultural production and non-food benefits have argued that they face unique circumstances."

For example, multifunctionality proponents in some countries claim the geography of their countries makes it impossible to create non-agricultural jobs in rural areas. "While non-food benefits can represent legitimate policy objectives, there is a counter view that multifunctionality has been misused to make the case for maintaining distortionary domestic policies," ERS says.

ERS holds that multifunctionality is not sufficient basis for continuing to pursue trade-distorting agricultural policies. "Following the principle of targeting policies to their specific objectives, many non-food benefits can be realized, likely with greater efficiency, through other, more appropriate non-agricultural policy instruments. In addition, most country claims of unique or special circumstances do not hold up to close scrutiny," ERS argues.

The entire ERS report is on the Internet at http://www.econ.ag.gov/whatsnew/issues/multifunction/index.htm.