Multifunctionality And Chinese Agricultural Policy

For more than half a century, under the guiding of traditional growth and development models, both developed and developing countries have considered their agricultural sector as a "serve maid" for other industries and their urban areas. The role that agriculture played was to serve economic growth. "Agriculture itself in nature is the production of food", Accompanied by the increasing use of new technologies and globalization, agriculture was seriously impaired all over the world.As the biggest developing country in the world, China has made great achievements since the last two decades; meanwhile, she faces more serious farm-related problems. Since the year 2004, Chinese agricultural policy has changed remarkably. Solving of the three farm-related problems and construction of new rural areas are the main components of the harmonious society. For this reason, continuing measures have been taken favorably to farmers. But the turning from "taking" to "giving" is just at its beginning. The classical economic approach based on separate production, private goods, no externality and zero transaction cost are no longer fit well into the new context.In the end of 1980s, the notion of multifunctionality emerged "in a thoroughly rethinking about the role and function of agriculture in modern society, and changes of agriculture system in the future." The basic idea behind multifunctionality is that agricultural production provides not only food and fibre, but also different non-market commodities. As a philosophy, a methodology and an objective, MFA incorporates all the natures of agriculture especially jointness, externalities and public goods characteristics into a single framework, and has gained more and more attentions. Many of the agricultural policy makers consider multifunctional agriculture the new direction of agriculture policy and a powerful trend of future agriculture.This paper aims to develop a theoretical framework for Chinese agriculture policies based on the researches have been done by others. The stress will put on the non-commodities. The main results are:Agriculture is multifunctional, the multifunctionality derived from various commodities and non-commodities. Most non-commodities exhibit externality and public goods characteristics, for which markets do not exist or function poorly. This cause trade-off between the provision of them and the increasingly demand for them.Agriculture production is joint production. Different from other industry, it is physical or cross jointness composed by several unit biological ones. Jointness has strongly changed the way of market equilibrium. The strong degree of jointness and the inputs ' nature dependency makes most agricultural products unique.Because of the jointness, commodities and non-commodities are interrelated and interdependent. Also because of the public goods and uniqueness of most non-commodities, policy measures must consider not only commodities but also non-commodities, not only economic functions but also social functions, not only from the agriculture sector but also from the society as a whole both nationly and internationly. It's is not just for farmers. It is more needed by the public, by the sustainable development and the building of the homornous society.