into a richer model. A willingness to pay function for landscape preservation and a production function
for food security are incorporated into a sector model for the agricultural sector in Norway. The model is,
in section 4, employed to discuss the optimal policy and supply of public goods when cost
complementarities are considered. Section 5 offers concluding remarks.
2. Agricultural public goods: Concepts and principles
In this section we demonstrate some basic principles on food security, landscape preservation and cost
complementarities within a simplified framework. Later, these principles are elaborated into a richer
model.
2.1 Food security
An agricultural sector that is too small may cause problems for the population if a crisis should arise.
Blockade in connection with war or international conflict is the traditional example of a crisis.
Increased risk of ecological crises and man-made disasters like the Chernobyl fall-out are perhaps
more relevant examples. The ability to provide food if a crisis arrives is referred to as (national) food
security. Ballenger and Mabbs-Zeno (1992) defines it more precisely as:
(1) Pr [(production + stocks + imports + aid) ≥ needs] ≥ π,
where Pr symbolizes probability, π is the minimum acceptable likelihood and ‘needs’ is the
subsistence level. This level has to be covered either from national production or from imports and
stockpiling. In Brunstad et al. (1995a) the subsistence level is measured by a crisis menu, defined as
the minimum annual quantities of agricultural products that must be made available for the population
when some consideration is also taken to the palatability of the diet. If it is not possible to import, this
consumption must be covered from domestic production. Stockpiling is possible for storable
commodities, but with no import possibilities stocks will soon run out. Such arguments have
traditionally been the rationale for self sufficiency or near self sufficiency in food production.
The Gulbrandsen-Lindbeck principle
Gulbrandsen and Lindbeck (1973) attacked the self sufficiency goal by stressing that production in
normal times does not have to be equal to the production during a crisis. Some switching of production
when the crisis has arisen will be possible. The crucial condition for switching of production is,
however, that the necessary factors of production are available, especially agricultural land but also
skills, animal material and capital equipment.
The following simple example clarifies the Gulbrandsen-Lindbeck principle. Assume that we
have two agricultural commodities X1 and X2, which only needs land, L, to be produced. There is
international trade in both commodities, so they can be bought and sold to world market prices Pxwi ,
i=1,2. The production technology is assumed to be Leontief, i.e.
(2) X1 ≤ -1 Li, i=1,2,
γi
where γi is an input-output coefficient and Li is the land used in the production of commodity i. Land
is limited, i.e.
∑ iLi≤ l .