MULTIFUNCTIONAL FARM BUSINESS (Encyclopedia)

A Multifunctional farm business consists in a factory farm that uses factors of production to carry out joined activities linked to agricultural functions that are not production-related. Supply and demand of functions are united, because on the one hand the agent (farm factory, local production system, sector, rural area) produces different outputs, and on the other hand, society acknowledges that an agent may meet different needs felt by society itself. 
Agriculture is multifunctional by nature, since it is socially acknowledged that agriculture may carry out other functions apart from the production of agricultural goods for the market. It is typical of the factory farm to produce different outputs, some of which are commodities, and others are non-commodities. Some non-commodities are linked to public goods, they produce positive externalities and reduce the negative ones; therefore, they are not marketable (non-commodity and non-market outputs).
The activities of a multifunctional farm other than production can be divided into private, public and social activities. The first ones are touristic/recreational and commercial activities, that is to say, direct sales. The public role of agriculture instead refers to environmental and landscape functions, that is to say, the supply of services destined for the community, such as reforestion of an agricultural area, realisation of elements with a landscaping value, reclamation/conservation of natural habitats, promotion of animal and vegetal biodiversity, prevention of erosion, etc. Finally, the social function of agriculture is the ability to supply services destined to the whole society, such as the supply of educational, cultural, occupational (disadvantaged workers), and therapeutic-rehabilitative services. 
Editor: Barbara PANCINO
© 2009 ASSONEBB