The provision of public goods by agriculture: Critical questions for effective and efficient policy making

Agriculture produces both marketable and public goods. However, the provision of public goods seems to fluctuate in time and location and is not always adjusted to what is needed by society. This divergence indicates possible market failures that policy interventions might be able to correct. Effective and efficient policy interventions require a detailed knowledge of the supply and demand of public goods together with the effects and costs of the various policy options. This paper aims to formulate the most important questions concerning supply and demand for public goods and provides directions for answering them. The paper concludes that answering these questions is an important ingredient for achieving more efficient and effective policies to provide the desired level of public goods. However, knowledge limitations, inherent uncertainties and political influence are all reasons why policies will never be able to perfectly match supply and demand of public goods. Still, by taking a pragmatic approach, more policy-relevant information can be generated that would enable a better informed discussion.

► We looked into the supply and demand of public goods related to agriculture.
► Effective policy interventions to enhance the their delivery require a good knowledge of their present and potential supply.
► The demand side of public goods needs to be determined as well.
► For several reasons it is difficult to find a balance between supply and demand of public goods.
► Research can support decision making by illuminating potentials and costs of intervention policies.