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European Review of Agricultural Economics Advance Access published online on October 6, 2005
European Review of Agricultural Economics, doi:10.1093/erae/jbi027
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© Oxford University Press and Foundation for the European Review of Agricultural Economics 2005; all rights reserved

Article

Joint production under uncertainty and multifunctionality of agriculture: policy considerations and applied analysis

Petr Havlík 1*, Patrick Veysset 2, Jean-Marie Boisson 3, Michel Lherm 2, and Florence Jacquet 4

1 University of Montpellier 1, Montpellier, France, and Mendel University of Agriculture and Forestry, Brno, Czech Republic; INRA--UMR LAMETA, 2 Place Viala, 34060 Montpellier, France
2 INRA Clermont-Theix, France
3 University of Montpellier 1, Montpellier, France
4 CIHEAM-IAM.M, Montpellier, France

* To whom correspondence should be addressed.
Petr Havlík, E-mail: havlik{at}ensam.inra.fr


  Abstract

The impact of various policy instruments on the production of environmental goods that are complementary to or competing with agricultural commodities is analysed in the light of the uncertainty in output prices and farmers' risk aversion. Some theoretical assessments are first summarised and then tested on a case study concerning beef and grassland biodiversity production in Monts du Cantal, France. The results of simulations carried out by mathematical programming farm-level models show that joint commodity and non-commodity production is nearly independent of the degree of farmers' risk aversion, and that commodity-linked policy instruments are not suitable for the production of environmental goods even under uncertainty.

Keywords: jointness; risk aversion; mathematical programming; biodiversity; decoupling.
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