Application of the concept of MFCAL depends on geography and the prevailing institutional conditions. A specific feature of institutional development is the level of complexity and maturity of the market economy. The level of market maturity is related to overall economic development, the level of urbanisation and socio-cultural characteristics. The framework outlined below charts the relationships between market development, geography, the resource base, and the institutional dimensions of agriculture and related land use. For example, the multifunctional character is expressed in widely differing ways on the agricultural frontiers of the Amazon, in the "Green Revolution" rural areas of India, in the arid landscapes of West Africa and in the alpine meadows of Switzerland. Consideration of specific characteristics, and of the relationships between the evolution of the market and priorities relating to needs and goals in different societies, lead to an assessment of unique national or regional conditions in order to achieve sustainability in agriculture and rural development.
The framework must bring out the major differences in the way in which each society uses the multifunctional character of agriculture and land. First, there is the capacity of cultivated ecosystems and rural systems (rural economy and societies) to encompass a large number of functions. The multifunctional character is considered in relation to the productive potential of natural resources (the "natural capital") in the area under consideration. The degree of resilience or fragility is examined in relation to the systems of use and management of these natural resources.
The organizational and institutional capacities to manage ecosystems and resources in each society (the "social capital") is also fundamental, as is a degree of long-term social stability. Manifestation of strengths and weaknesses in natural or social capital can result in the degradation of ecology and fragmentation of society, or conversely to improvement and sustainability.
The challenges differ within and between countries and regions, and policies will correspond to perceptions and opportunities in part in relation to patterns of international trade.
Figure 1 presents the conceptual framework with principal agro-ecologic types and specific, illustrative examples drawn from several regions. The vertical axis depicts natural capital, from low to high potential in natural resources. The horizontal axis indicates social capital, from low to high institutional development. Each axis includes a cluster of factors. For natural capital, the factors cited are relative availability and endowment in resources, and system resilience. For social capital, factors include the strength of the market and the mechanisms and bodies for public decision-making at local and national levels. The degree of centralisation is also relevant.
The framework is designed to illustrate combinations of factors and trends in ecology and society. Given these factors, the figure plots some regional examples on a continuum in order to compare the combination of factors that influence the multiple functions of agriculture and land. Specifying the combinations opens the door to planning various options, with projected synergies and trade-offs under specified conditions. Building the capacity of institutions in order to manage viable levels of goods and services and still maintain environmental sustainability is a central challenge in all societies. Simplifying greatly, "capacity" represents the level of efficiency and organisation of the institutional framework for the market and public decision-making. A general relationship is postulated between the development of institutional capacity and the potential contribution that the multiple functions of agriculture and land use can make to sustainable development.
In biophysical terms, these are generally arid, mountainous or other regions in which production potential is limited. These areas are often far removed from markets because of physical distance and limited infrastructure. Transport and information problems reduce producer familiarity with the state of the market, raise trade costs and often give buyers of agricultural products a local monopoly to the disadvantage of producers. The market is therefore very imperfect in institutional terms. The local institutions for managing common goods or the public interest can be inappropriate for dealing with the situation. Decline in incomes, deterioration in the overall economic fabric and seasonal migration of the men often cause these institutions to become dormant. In some cases, constraints are compounded by land tenure laws bestowing exclusive rights on the State to manage resources throughout the national territory, thus depriving local communities of this role. These regions are therefore often in an ecological, economic and social crisis.
In some cases, development projects with external support have managed to recreate a positive dynamic for agricultural production, economic growth and institutional development by systematically exploiting the multifunctional capacities of agriculture. The relative isolation and general poverty of the people stimulates the use of some multifunctional forms of land use as one of the bases for triggering a process of local rural development and economic accumulation. But the slow pace of capital accumulation makes the mobilisation of external resources necessary. Strengthening the institutional basis will be necessary in order to achieve sustainability and rural development.
These regions are typically on the pioneering frontier in tropical ecosystems, or in areas plagued by persistent conflicts and civil disorders, or in countries in steep decline due to weaknesses in national institutions. In many cases these regions have been resettled without sound planning to protect the sustainability of the resource base. In areas without effective markets, small-scale producers generally clear new lands for settlement and cultivation only using their own labour. Being far from markets, they produce a wide variety of different products for household consumption, beginning with staple agricultural foodstuffs. Land-use strategy consists of multiplying means of subsistence and resources, and spreading risks. Agriculture therefore tends to be diversified and to exploit the multiple resources available in the environment.
Under these conditions, the natural functions that can renew soil fertility and regenerate resources may be inadequate. Some economic development is nevertheless perceptible, coming from the development of relations between agriculture and other sectors in new settlements. The multifunctional character in these cases is therefore not in terms of land suitability, but rather manifested in the capacity of pioneering agriculture to generate growth in the local economy.
In general, these regions were settled long ago and now have high population densities and have had high levels of institutional development. Examples include the Sahel and Savanna regions of West Africa, Northeast Brazil, some regions of Madagascar and the plateaux of the Andes. Prolonged settlement has enabled the societies to progressively develop production techniques to resolve the problems raised by the severe limitations and constraints of their environment. High population density has also encouraged the emergence of a local and subregional market economy, particularly on the outskirts of the towns.
The environmental constraints are such that the agricultural systems constantly run the risk of becoming unsustainable. Small land-holdings, fragmentation of tenure and intensive land use can lead to nutrient depletion and soil erosion. The high cost of restoring degraded lands can result in small farmers leaving the land. Ecological and economic constraints, however, can also compel farmers to exploit the multifunctional character of agriculture and land by diversifying production, maintaining ecological sustainability through appropriate techniques, seeking new market opportunities, and multiplying small-scale service activities in relation to agriculture. The rural economy can then become progressively connected to external markets.
These regions are in a favourable situation because of their natural endowments, market infrastructures and ability to implement effective public policies. This is the case for some zones with established plantation agriculture (such as Côte d'Ivoire), with mechanised agriculture in the industrial countries, or in the "Green Revolution" areas. As indicated earlier, these areas have tended historically to neglect the possibilities of using the ecological functions of the environment for production purposes. The sound operation of the market with State protection and incentives for agriculture at initial stages have made good performance possible.
Trends in the development and maturity of the market in relation to MFCAL are a specific feature of institutional development. The evolution of the market is not uni-linear, absolute or final. For example, market efficiency can decline or return to a restrictive policy climate with heavy regulation and emphasis on a specific objective for agricultural areas, such as self-sufficiency. Regarding the evolution of demand and opportunities for optimising the multiple functions available, stakeholders can manifest their preferences in many cases, whether in highly industrialised or predominantly rural conditions.
The number of non-food multiple functions of agriculture may initially decline with the emergence of the market economy, integration in global trade, production specialisation and intensification of production based on chemical inputs and mechanisation. The relative importance of other functions then tends to increase again when the environmental and other dimensions of agriculture are emphasised in order to reduce the negative impacts and in response to new demands for social and other services. The evolution of the multifunctional character can thus be represented as a U-shaped curve over time. The change can be viewed as relating to economic development (and opportunity), better understanding of long-term trade-offs (initially often concerning the environment) and intrinsic transformations in industrial societies (such as moving towards service industries and recovery and use of by-products).
Regions with weak or embryonic markets usually have diversified production in order to meet all short-term human needs. Agricultural output is therefore in response to a variety of different production objectives, such as food for human consumption, animal feed, medicinal plants and construction materials. The diversity of products and activity stimulate local specialisation and trade. Moreover, resource renewal will rely on the natural functions and fertility of the ecosystems. Many of these resources - soils, forests, grazing lands, irrigation water, wildlife - are shared in common. Community members have access, but must respect rules governing techniques for use and management in order to guarantee sustainable production. Equity of access is also a fundamental common concern, and positive effects are ensured by social norms. Links to regional or global trade networks are limited, mainly to high value or essential goods.
Regions which have benefited from a sound market economy in a context of continued growth, as well as benefiting from new agricultural techniques that have made high yields possible, develop rapidly. This is the case in the most highly industrialised countries since World War II, and in the countries or regions that have gone through the "Green Revolution." In both cases the market was set up government authorities or agricultural organisations. Co-operatives organised supply, and public agencies and co-operatives handled marketing. There were guarantees provided for price stability, public credit, and public extension activities. Under these circumstances, production rapidly specialised in response to national food needs and according to demand (for example, rice and wheat in India, and cereals in Europe). In some cases, specialisation was oriented to guarantee exports to meet a large demand (for cotton in West Africa, or hybrid maize in Zimbabwe). Market development, specialisation and reliance on chemical inputs were a great success in terms of yields, production and incomes. The multifunctional advantages intrinsic to "traditional" agrarian systems seemed to have become anachronistic. The market and new techniques appeared to be able to guarantee people's livelihoods and access to food.
However, perceptions and situations are now changing. Negative external effects have appeared in the environment and the market has become less dynamic as production progressively corresponds to current demand. Prices fluctuate directly in relation to changes in supply and demand, as subsidies fall and deregulation continues. This is leading producers to seek ways to reduce their costs and diversify production in order to cope with greater market risks. The idea of using ecological and biological practices as a partial replacement for methods using chemical inputs alone is gaining acceptance.
In some regions, agriculture is in transition from heavily administered to free market mechanisms. The market alone will not motivate producers to make better use of the potentials for multiple functions. In the developing countries, and particularly those undergoing rapid demographic growth, food security is a top priority and far from guaranteed. There can also be fundamental sub-regional differences in priorities and policies within one country, given differences in factors including resources, degrees of industrialisation and urbanisation, the quality of infrastructure, and institutional capacities. Nevertheless, policies in these countries will probably maintain some level of government intervention in order to guarantee producers a favourable economic environment so that they do not interrupt the pace of efforts to increase production and reinforce food security.
The general public in these regions is becoming increasingly vocal about the desirability of making agriculture less environmentally damaging and emphasising the development of a new range of services. These services include improved quality of health and nutrition (through tracking of products and assessment of risks), better water quality, the conservation of biological diversity (in particular, the protection of endangered species), conservation of forests and landscapes, preservation of the special qualities and visual features of unique agricultural and rural areas, and support to maintain the vitality of rural culture and ways of life.
The demand may be private or public. When private, as when individuals expect higher quality in agricultural products, the market is the best way to meet demand. But when demand is public, intervention by government or other public authorities should be envisaged in the most appropriate ways. Growing public awareness of opportunities and alternatives remains embryonic in even the most information-rich and highest average-income countries. However, emerging consensus on new priorities within each society and the accompanying changes in opinion can establish a mandate for making choices between potential scenarios for agriculture and land.
The degree of natural resources potential and the level of institutional development encompass the diversity encountered in different situations. This relatively rapid overview allows three conclusions to be drawn for empirical confirmation:
The choice of policies that best reflect the relative importance of multiple functions in agriculture and land must therefore take account both of the fragility or resilience of the biophysical conditions of each situation, and of the level of development of the market economy and public institutions.
The conceptual framework can contribute to analysing and identifying options for future action. There remains considerable variation between opportunities and likely directions of policy for individual nations. Contemporary processes of liberalisation and market development are creating differences between countries regarding the principal goals assigned to agriculture. In the industrialised countries there is a demand for a more multifunctional agriculture, particularly with effective ecological functions. In developing countries the debate on multiple functions relates above all to the desire to conserve a high level of local food security and a reasonable distribution of income and resources.