Indicators for multifunctional land use—Linking socio-economic requirements withlandscape potentialsHubert Wiggering a ,b ,*,Claus Dalchow a ,Michael Glemnitz a ,Katharina Helming a ,Klaus Mu¨ller a ,c ,Alfred Schultz d ,Ulrich Stachow a ,Peter Zander aaLeibniz-Centre for Agricultural Landscape Research (ZALF),Eberswalder Str.84,D-15384Mu¨ncheberg,Germany bUniversity of Potsdam,Faculty of Mathematics and Sciences,Institute for Geoecology,PO Box 601553,D-14415Potsdam,GermanycHumboldt-Universita¨t zu Berlin,Faculty of Agriculture and Horticulture,Institute for Agricultural Economics and Social Sciences,Luisenstr.56,D-10099Berlin,GermanydUniversity of Applied Science of Eberswalde,Faculty of Forestry,Alfred-Mo¨ller-Str.1,D-16225Eberswalde,Germany AbstractIndicators to assess sustainable land development often focus on either economic or ecologic aspects of landscape use.Theconcept of multifunctional land use helps merging those two focuses by emphasising on the rule that economic action is per se accompanied by ecological utility:commodity outputs (CO,e.g.,yields)are paid for on the market,but non-commodity outputs (NCO,e.g.,landscape aesthetics)so far are public goods with no markets.Agricultural production schemes often provided both outputs by joint production,but with technical progress under prevailing economic pressure,joint production increasingly vanishes by decoupling of commodity from non-commodity production.Simultaneously,by public and political awareness of these shortcomings,there appears a societal need or even demand for some non-commodity outputs of land use,which induces a market potential,and thus,shift towards the status of a commodity outputs.An approach is presented to merge both types of output by defining an indicator of social utility (SUMLU):production schemes are considered with respect to social utility of both commodity and non-commodity outputs.Social utility in this sense includes environmental and economic services as long as society expresses a demand for them.For each combination of parameters at specific frame conditions (e.g.,soil and climate properties of a landscape)a production possibility curve can reflect trade-offs between commodity and non-commodity outputs.On each production possibility curve a welfare optimum can be identified expressing the highest achievable value of social utility as a trade-off between CO and NCO production.When applying more parameters,a cluster of welfare optimums is generated.Those clusters can be used for assessing production schemes with respect to sustainable land development.This article is also available online at:/locate/ecolindEcological Indicators 6(2006)238–249*Corresponding author.E-mail address:wiggering@zalf.de (H.Wiggering).1470-160X/$–see front matter #2005Elsevier Ltd.All rights reserved.doi:10.1016/j.ecolind.2005.08.014Examples of production possibility functions are given on easy applicable parameters(nitrogen leaching versus gross margin)and on more complex ones(biotic integrity).Social utility,thus allows to evaluate sustainability of land development in a cross-sectoral approach with respect to multifunctionality.#2005Elsevier Ltd.All rights reserved.Keywords:Indicator for sustainable land development;Multifunctional land use;Agricultural production schemes;Joint production; Production possibility curve;Social utility1.The notion of multifunctionality in the context of sustainable land useThe term multifunctionality was coined by OECD and EU in their theoretical considerations on agricultural policy reforms.The recent developments of the2003Common Agricultural Policy(CAP) reform are a response to a continuing wave of fundamental changes in the driving forces that shape European agriculture.The fundamental paradigm of sustainable development of rural areas as well as a better targeting of social,environmental and consumer concerns has introduced a shift of policies from production oriented(1st pillar)towards rural devel-opment oriented(2nd pillar)targets.This shift was accelerated through the international negotiations within the World Trade Organisation(WTO)frame-work resulting in the reduction of trade barriers and of price-or production-based farming subsidies(COM, 2002).The new perspective of CAP is characterised by recognising the full range of economic,social,cultural and environmental functions of agriculture.This multifunctional perspective is an essential component of the model of European agriculture(MEA)(COM, 2003),the new paradigm of European agricultural policy.With the recognition of the multifunctional role of agriculture,the complex interaction of the production of agricultural commodities with the rural economy,with rural communities and rural environ-ments comes into sight.In addition to their economic implications,agricultural production and rural land-scapes are increasingly judged from these perspectives that in part mirror the view of urban consumers and urban citizens.The analytical framework of the Organisation for Economic Co-operation and Development(OECD) presents a comprehensive theoretical basis,which outlines the most important problems of multi-functionality(OECD,2001).In this context,the concept of multifunctional agriculture is based on the assumption,that every economic action fulfils several functions besides its main function.The OECD subsumes those functions to the term‘‘non-commod-ity outputs’’.On this basis,the OECD has developed a draft definition of multifunctionality,which combines the varying demands on land use.Key elements of multifunctionality are(i)the existence of several ‘commodity(CO)and non-commodity(NCO)out-puts’being produced by,e.g.,agriculture and(ii)the fact,that some of those‘non-commodity outputs’show features of externalisations and public goods with the result,that markets for these goods do not exist or function unsatisfactorily(Boisvert,2001a,b).Within the EU,the concept of multifunctionality is utilised to emphasise on the many services which agriculture displays in addition to its prime purpose. As a result,agriculture is less put into the context of the production of food(commodity outputs),but rather into the context of resources protection,leisure and recovering space as well as cultural landscape (non-commodity outputs).To the EU,this concept of multifunctionality presents a powerful opportunity to continue thefinancial support of farmers through a remuneration of the production of non-commodity outputs.Within the EU,the concept of multi-functionlity has consequently experienced an increasing relevancy with regard to diversification strategies while describing the various private and public use potentials of land for farmers,for rural areas and for society in general(Maier and Shobayashi,2001).While the above attempts are exclusively discussed in the sectoral background of agricultural production, the concept of multifunctionality is given further importance to sustainable land development providedH.Wiggering et al./Ecological Indicators6(2006)238–249239that it is regarded cross-sectorally in the general context of land use and landscape.Multifunctionality of a landscape in this context is the key issue to define what sustainable land development means.Multifunction-ality denotes the phenomenon that the landscape actually or potentially provides multiple material and immaterial‘‘goods’’that satisfy societal needs or meet societal demands by the states,structures or processes of the landscape(Barkmann et al.,2004).A landscape that displays this phenomenon can be called a multifunctional landscape.Sustainable development is here understood in lines with the Brundtland definition(WCED,1987)as an anthropocentric,socially motivated paradigm for the development of human–environment and human–human interactions.Then,a demand or need oriented approach of implementing the multifunctionality concept is considered to support sustainable land use and development,respectively.This presupposes, that(i)all demands on land use and landscape functions are identified and considered simultaneously and(ii)their spatio-temporal interrelations are analysed in the land use context.Basis of analysing multifunctionality is to under-stand how land use affect landscape functions and how they satisfy the multiple demands that society places on the use and services of landscapes.A sustainable use and development of landscapes has to integrate aspects of environmental protection,social welfare and economic growth and meet further demands such as providing sites for development,traffic,industry, raw material processing or waste disposal.Further important but not yet completely understood land-scape functions include biodiversity and habitat functions and the buffering capacities for matter and energy as well as mitigation abilities to extreme weather events(floods,drought)which might be of increasing importance with evolving climate change effects.In addition,the use of landscapes has to be regarded as an element of the urban–rural-intercon-nection,by which recreational and educational demands as well as issues of cultural heritage are to be included.Generally,every distinct landscape within the European regions has its specific set of functions and land use demands placed on it.This characteristic set is by itself a characteristic property of the respective landscape.The problem is to properly characterise and delineate landscapes and to derive information of all groups expressing demands on the use of landscapes.One crucial step towards the full inventory is to check whether the various demands on landscapes expressed by society are synonymous with relevant landscape functions as,e.g.,listed by experts. Some landscape functions might not be addressed by interest groups since their importance is only relevant in a longer time scale(i.e.,buffering capacities, genetic pools),not completely understood(cooling and mitigation functions)or of relevance only for extreme events(floods,droughts)and not publicly anticipated in the near future.These functions are summarised as option and bequest values in the economic terminology but need to be addressed explicitly when sustainable land use is intended and be based on a trade-off of land use demands.Once the demands and related functions have been identified for a specific landscape in a given spatio-temporal context,it has to be analysed how land use affects these functions and how they interrelate with each other.Each type,pattern and intensity of land use has its specific impact on the land and determines the way the functions perform in relation to societal demands.The knowledge of land use—landscape function relations is a prerequisite for the optimisation of land use patterns and production schemes towards the fulfilment of the multiple landscape functions. Indicator systems integrating the economic,social and environmental dimension of land use—landscape functions are required to dispel this relation.2.Indicators for sustainable land use: requirements and realityAlthough the common,nevertheless general defini-tion(s)of sustainable development touches upon nearly all areas of ecological,economic and social developments,adequate management rules of resource use including a multifunctional land devel-opment have been derived from it(e.g.,Daly,1990, pp.2–5;Pearce and Turner,1990,p.43).The general problem of ecological as well as socio-economic effects due to multifunctional land use and the consecutive decision making processes is the enormous complexity of the according patterns.To build up an evident projection which is able toH.Wiggering et al./Ecological Indicators6(2006)238–249 240represent the most important features of the particular state,the complex ensembles of the different system elements and the multiple webs of actions,reactions and interactions have to be condensed into an applicable pattern.An approach to reach such a practicable model can be based on indicators.These are variables or indices,which represent,integrate and characterise information embodied in comprehensive data sets(Mu¨ller and Wiggering,2003,pp.19–27) which often are not measurable directly.Indicators are suitable tools whenever the primary information of an object is too complex to be handled without aggregations.Consequently,indicators should not only be derived considering pragmatical argumenta-tions,but also referring to an optimal theoretical background.This demand is especially important because in many cases indirect effects,chronical interactions,accumulative reaction chains and com-plex interaction webs can lead to the most evident consequences for the performance of the particular system processes.Thus,a holistic approach is an important prerequisite for a reliable indication of complex systems with different scales.Already Opschoor and Rjeinders(1991,p.19) explicitly have described the necessary process how to derive indicators to characterise the so called functions of scale limits(see also Daly,1992,p.192).In the subsequent years,several concepts and sets of indicators came up.Broadly,the conceptional approaches can strictly become divided into two underlying strategies:(a)the economic orientation and(b)the ecological orienta-tion(Rennings and Wiggering,1997,pp.25–36).Still, a consequent merging of these two interest oriented approaches has taken place only to a minor degree. Thus,we suggest to focus onto the necessity to strengthen the discussion on multifunctional land development and land use.Therefore we are going to bring together the socio-economic and ecological perspectives of solving,e.g.,the problems within rural areas forcing sustainable and a subsequent multi-functional land development.Multifunctionality within this context necessarily has to draw emphasis on both commodity and non-commodity outputs.This is why economic action always is accompanied by ecological and social utility. Sustainable production schemes at the end depend on the relative prices of commodity and non-commodity outputs.Thus,social utility resulting from different degrees of jointness of production can be an indicator for the degree of multifunctional land use and of sustainable use of resources.3.‘‘Social utility’’:concept for an indicator derived from economic theoryIn an overall simplified analysis of the above described OECD-approach,two groups of products (outputs)of a multifunctional use of landscapes can be distinguished:(i)commodity outputs and(ii)non commodity outputs.The COs depict what we are used to pay for in the past—classical agricultural products. NCOs are new products(and functions)of the landscape jointly generated by agricultural production which fulfil additional private or societal needs related to the use of land and landscapes, e.g.,securing biodiversity or reduction of nitrate leaching(Bark-mann et al.,2004).Because of a joint production of CO and NCO in the past,the supply of CO was accompanied with a(free of charge)provision of NCO—despite of the fact,that here was in general no direct monetary demand with regard to NCO.But the production of NCO,which include avoiding negative externalities,is–just as the production of CO–connected with costs.Thus,existing economic incentives(globalisation,competition,technical pro-gress)drive the farmers to replace traditional joint production schemes by production schemes which are focusing on COs and increasingly decoupling NCO from CO production.In consequence,scarcities changed over time because the supply of NCO was decreasing and–beside of this,according to Maslow’s hierarchy of needs(Maslow,1970)–demand for NCO was increasing in the process of economic develop-ment.The results are shortages with regard to NCOs, felt by society.These shortages induced a monetary demand revealed mainly by government in public support programs and created a new‘‘market potential’’for farmers:the production of NCO—either(if possible) as a(in a technical sense)separate production of NCO or as a joint production of NCO and CO.Due to this change,markets and quasi-markets for NCOs emerged.Thus,NCOs are going to shift into a status, that allows to earn money with their production.H.Wiggering et al./Ecological Indicators6(2006)238–249241The latter is nothing else but the revival of a multifunctional land use.Optimal production schemes are depending now on the relative prices of CO and NCO,on the degree of jointness of production,and on the production technologies/management schemes available.The market potential of such NCO-produc-tion depends on scarcity of NCO in a given region,on individual and aggregated individual preferences (societal demand)with respect to NCO and correspond-ing monetary demand for such ‘‘new’’products and on the quality of established economic institutions to allocate supply and demand of NCO.Overall income of farmers is not any longer determined only by sales revenues and costs of production of CO any longer but also by sales revenues and costs of production of NCO.To maximise profits,a farmer can choose between different technologies of production (production schemes)which are connected with different quantities of CO and NCO.These facts are illustrated in Fig.1.Such a demand oriented approach requires infor-mation,with respect to:(i)site conditions,(ii)the degree of joint production of different production schemes available (production possibility curve),(iii)the revealed demand with respect to NCO and (iv)the relative prices of CO/NCO.A single farmer is confronted with a given demand for NCOs and COs,which is determined by individual demand for COs and NCOs that have the character-istics of private goods and by societal demand for COs and NCOs that have the properties of public goods.Just to simplify,we suppose,that NCOs have the characteristics of public goods and COs have the properties of private goods.The production possibility curves shown in Fig.2illustrates how NCO output changes with CO output and vice versa.The shape of the production possibility curve is determined by site conditions,by the degree of joint production of different production schemes available,and by the concrete NCO under considera-tion.Under a given framework of technical possibi-lities and site conditions there are no efficient production schemes below the production possibility curve because production schemes underneath the curve do not realise the specific possible NCO and CO output and are therefore not efficient.However,other technical conditions and site characteristics will create differing shapes of the production possibility curve as below-mentioned.The concept of welfare economics,which is basing the following remarks are described in Boadway and Bruce (1984).H.Wiggering et al./Ecological Indicators 6(2006)238–249242Fig.1.Multifunctional agriculture.Supposable are production possibility curves of type1as described in Fig.2(left side),where an increased production of NCO is always related with an reduced output of the CO(trade-off);a special case of this type is a linear production possibility curve.But also supposable is a production possibility curves of type2(Fig.2,right side),where in two parts of the curve an increased supply of NCO is related with an increased output of the CO,respectively an increased production of CO is related with an increased output of NCO,whereas in another part of the curve an increased production of NCO is connected with a reduced supply of NCO et vice versa.Special cases of type2are production possibility curves which start or end with one branch in the point of origin.If we move on a given production possibility curve (with respect to a certain NCO),organic farming,e.g., can be situated on the upper section(with more NCO and less CO provision)of the production possibility curve,while integrated farming may be situated on the downward section(with less NCO and more CO provision).Each combination of CO and NCO is connected with a specific social utility1as illustrated in Fig.3.To visualise the level of social utility we use–from welfare economics well-known–social indifference curves (high,middle and low social utility),which are defined as curves with an identical social utility for different combinations of CO/NCO availability.The social indifference curves are representing the aggregated individual preferences of the overall society with regard to the provision of NCO and CO,i.e.,they express the demand of society with regard to CO and NCO.The optimal combination of NCO and CO(welfare optimum)is determined by the osculation point of the production possibility curve and the highest reachable social indifference curve(e.g.,middle social utility in Fig.3).More in general,the level of social utility reached (expressed by a social indifference curve)can be used as an indicator to compare production schemes with respect to their degree of adaptation to social determined multifunctionality in the land use of a specific region.To give the level of social utility achieved the conceptual status of an indicator,we propagate the term SUMLU(social utility of multi-functional land use)or just‘‘social utility’’.SUMLU satisfies the need derived above to merge ecological, economic and sociocultural parameters to assess multifunctional land use in a theoretical point of view and can be operationalised with approaches as described in chapters4and5or available from cost–benefit analysis,contingent valuation or similar concepts.The parameter of NCO may be realised by enumerable abundance,but NCO may also be realised by highly aggregated indicators as,e.g.,biotic integrity, as long as there is any acceptable paradigmatic way of quantification with respect to CO output and there also is a well defined contribution of this complex NCO to the social utility.H.Wiggering et al./Ecological Indicators6(2006)238–249243Fig.2.Types of production possibility curves.1Social utility in this sense includes economic,ecological andsociocultural issues and is sometimes also named as societal utility.By becoming less abstract,the NCO parameters adaptable on the y -axis can range from simple quantitative parameters as the portion of sunflower blossoms in summertime and fall to risk probabilities related to nitrogen leaching (see chapter 4).Even extreme holistic parameters as biotic integrity (by itself a complex derivation from indicators of biological diversity,see chapter 5)will be applicable at the NCO axis,as long as considering their general problem of quantification.All possible NCO parameters,however,(have to)cover some aspect of a landscape potential,either on human welfare (landscapes aesthetics,etc.)or on biotic advantage,or on any combination of both.The CO parameters on the x -axis can range form quantitative yield to total gross margin.In general,they (have to)cover any land use-related socio-economic parameter.However,with different sets of parameters on the x -and y -axes,one specific production scheme generates different production possibility curves with different welfare optimums.Thus,with growing number of parameters con-sidered,there will be a cluster of welfare optimums.Defined thresholds at each parameter scale create acorridor (or space)of general acceptance,which can be defined dynamically depending on the specific purpose (like decision support or assessment,scenar-ios).4.Production possibility function:example of nitrogen leaching and profitabilityFig.4presents an example of the determination of the production possibility function,showing the relation between the non-commodity ‘‘reduction of the negative externality nitrogen leaching’’and the monetary commodity ‘‘gross margin of a farm’’.The example is based on economic optimisation with the help of a linear programming farm model that maximises the total gross margin of a synthetical farm which covers a small region of about 1800ha.The farm model includes calculations of potential nitrogen leaching for every combination of sites and possible production activities (Zander,2003).As the model is based on currently practiced production activities,the calculated trade-off between the environmental objective to minimise potential nitro-H.Wiggering et al./Ecological Indicators 6(2006)238–249244Fig.3.Social indifference curves,production possibility curves and welfare optimum.gen leaching and the economic objective to maximise total gross margin for the arable farm,is equivalent to the actual production possibility function,as displayed by curve type1in Fig.2.This example illustrates the losses in total gross margin if one conservation objective is subsequently maximised—starting from the economic optimum. Without appreciable losses in gross margin or negative effects on attainment of other environmental targets,a 20%increase in goal attainment,here:reduction in potential nitrogen leaching from agricultural land use is attainable.Further reductions in potential nitrogen losses lead to more significant losses in total gross margin.The limited losses in gross margins at the beginning of the trade-off curve can be explained by the fact that the farm cropping plan hardly changes, only the allocation of the different crops over the60fields is altered.This allows the model farm to profit from the comparative advantages of different sites in this heterogeneous landscape.With increasing goal attainment,that means reduced nitrogen leaching,alternative crops become part of the solution.First,the area of wheat and peas decreases in favour of rye,barley and triticale,which are less susceptible to nitrogen leaching than wheat. The area of peas is reduced because of their susceptibility to nitrogen leaching,mainly the result of the long winter fallow period.With increasing restrictions on nitrogen leaching,winter rape is replaced by sunflower and linseed,while production of rye and triticale is replaced by summer barley, combined with intercrops.Hence,crops with a lower risk of nitrogen leaching gain increasing importance.This example represents only one non-commodity output in one specific landscape managed by a specific farm type at a specific moment.The reallocation of production practices within the landscape shows clearly that every specific landscape and farm type will show a specific production possibility function. To attain the sectoral production function,aggregation over space and for different farm types is necessary.Above,this static,economic perception of produc-tion possibilities and social indifference versus the production of non-commodities and commodities,has to be extended by the temporal dimension of societal processes related to policy making,stakeholder activities and scientific research(Zander and Ka¨chele, 1999),that aim to change(i)the indifference curve through changed demands,e.g.,new policy instru-ments,(ii)the production possibilities through scientific research and(iii)the market conditions through advanced marketing of NCOs.5.Highly aggregated non-commodities:thecase of biotic integrity and agricultural land use The preservation and careful usage of environ-mental resources is a central societal demand since the continual extinction of species has become common currency.The societal perception of this process and the demand for action against was primary carried by some single,mostly very attractive species.Driven by an increasing economic pressure on landscape change and development,the need for revising the traditional concepts of nature protection has become evident during the last decades.Today the world is faced with the greatest mass extinction since the dinosaurs perished65million years ago.Most of this loss is caused by human activities effecting landscape structure and matter cycles.Modern production schemes are characterised by a high spatial coverage of their impacts,high pressures on single spots and decreasing jointness in production of appropriate preconditions for life communities.The coexistence of production and conservation is one of the most important current challenges in landscapes.Biodiversity as holistic approach denotes the diversity of all life forms in all their values and elations to each other and is present on different spatial and temporal scales.H.Wiggering et al./Ecological Indicators6(2006)238–249245Fig.4.Production possibility curve between the risk of nitrogen leaching and total gross margin of an arable farm(Zander,2003).。
