The economic impact of multifunctional agriculture in Dutch regions: An input-output model

• We analysed the economic impact of multifunctional agriculture in the Netherlands.
• We used Input Output Analysis as an analytical tool.
• The economic impact appeared to be rather small.

Multifunctional agriculture is a broad concept lacking a precise definition. Moreover, little is known about the societal importance of multifunctional agriculture. This paper is an empirical attempt to fill this gap. To this end, an input-output model was constructed for multifunctional agriculture in several regions in the Netherlands. The definition used included four multifunctional agricultural activities: (i) green care, (ii) tourism, recreation and education, (iii) on-farm sales, and (iv) green services. Multiplier values – indicating the chain impacts of these multifunctional activities in the rest of the economy – were calculated for four regions in the Netherlands. The results showed that, in terms of output and employment, multifunctional agriculture was not a main driver for economic growth. Moreover, from the input-output model it appeared that multifunctional agriculture led in particular to more expenditure in the agricultural sector itself, rather than in any other economic sector. The indirect feedback effects of multifunctional agriculture on the non-agricultural sectors in the Dutch economy appeared rather small. The input-output model also showed that multiplier values differed over the regions, mainly due to differences in the composition of multifunctional activities. Although the absolute size of employment in multifunctional agriculture was very small, the employment per unit of output was high, especially when compared with the employment/production rate in primary agriculture.