400 Localized Food Systems
other standards examined had some positive aspects, they appeared not to have
sufficient potential for improving environmental quality on arable lands (Girardin
and Sardet, 2002).
Van Ravenswaay (1996) studies some of the challenges facing environmental
labelling. She notes that environmental labelling has created two controversies.
They involve (1) the potential for consumer deception, and (2) whether environ-
mental labels should also serve environmental policy objectives. Consumers’ abil-
ity to discern whether or not a product has been produced in an environmentally
sound manner remains tenuous (Erickson and Kramer-LeBlanc, 1996). Lohr
(1998) notes that there are many certifications – in addition to organic – for envi-
ronmentally oriented production systems. She indicates that although consumer
interest in purchasing food products with ‘green’ production characteristics is
growing, given that existing ecolabels are not well-defined in consumers’ minds,
there is substantial potential for new labels with vague criteria that are not legally
defined to generate confusion. Thiébaut (1995) articulates the additional problem
of determining whether specially labelled products contribute to both ‘internal’
quality (e.g. taste) and ‘external’ quality (production of positive environmental
externalities or reduction of negative ones).
For purposes of public policy analysis, it is useful to view labelled products
from the standpoint of ‘multifuntionality’. Agriculture is capable of producing
food and fibre outputs, social outputs (e.g. rural employment opportunities and
‘equitable’ income) and environmental outputs. Many of the social and environ-
mental outputs have ‘public good’ or ‘externality’ characteristics (Bougherara and
Grolleau, 2002; Dobbs and Pretty, 2004). Policy issues associated with agricultural
systems engaged in producing quality and ecolabelled products are twofold:
- Do the criteria established for particular labels, including labels originally
developed for social reasons (such as territorial development), also effectively
contribute to agriculture’s environmental function? - To the extent labelled products do provide positive environmental outputs, are
those outputs types that consumers are willing (or might be induced) to pro-
vide compensation for in the market through price premiums? As environ-
mental awareness and income levels rise in societies, a growing number of
consumers may be willing to pay some price premium for environmental out-
puts that are essentially public goods or externalities. However, that willing-
ness is likely to vary with the type of environmental output, and it is unlikely
ever, by itself, to be adequate to induce socially optimal levels of environmental
quality across the full range of environmental outputs potentially associated
with a truly multifunctional agriculture.
Although farmers themselves have multiple goals – including stewardship and risk
management goals – farm profitability is always one of the important goals that
agrienvironmental policies must address. Therefore, policies will need to consist of
a mix of schemes that both (1) facilitate enhanced market value for food and fibre