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Policy Challenges and Priorities for Internalizing the Externalities of Modern Agriculture

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  • Jules Pretty
  • Craig Brett
  • David Gee
  • Rachel Hine
  • Chris Mason
  • James Morison
  • Matthew Rayment
  • Gert Van Der Bijl
  • Thomas Dobbs

Abstract

Agriculture is inherently multifunctional. It jointly produces more than food, fibre or oil, having a profound impact on many elements of economies and ecosystems. A comprehensive framework is used to present new data on annual external costs in Germany ( 1.2 billion; US$2 billion), in the UK ( 2.3 billion; US$3.8 billion) and in the USA ( 21 billion; US$34.7 billion). These costs are equivalent to 49-208/ha (US$81-343/ha) of arable and grassland. Agriculture also produces positive externalities, and though there is no comprehensive valuation framework, the public benefits in the UK appear to be in the range of 10-30 (US$16-49) per household, or some 20-60/ha (US$32-100/ha) of arable and pasture land. These external costs and benefits raise important policy questions. In particular, should farmers receive public support for the multiple public benefits they produce? Should those that pollute have to pay for restoring the environment and human health? Policy options available for encouraging behavioural changes are of three types: advisory and institutional measures; regulatory and legal measures; and economic instruments. Three of the most promising options for discouraging negative externalities and encouraging positive ones are: (1) environmental taxes; (2) subsidy and incentive reform; and (3) institutional and participatory mechanisms. The greatest challenge, however, will be to find ways to integrate such policy tools into effective packages that will increase the supply of desired environmental and social goods whilst ensuring farmers' livelihoods remain sustainable.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Journal of Environmental Planning and Management.

Volume (Year): 44 (2001)
Issue (Month): 2 ()
Pages: 263-283

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Handle: RePEc:taf:jenpmg:v:44:y:2001:i:2:p:263-283

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Cited by:
  1. Hoang, Viet-Ngu & Coelli, Tim J., 2009. "Measurement Of Agricultural Total Factor Productivity Growth Incorporating Environmental Factors: A Nutrients Balance Approach," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 47636, Australian Agricultural and Resource Economics Society.
  2. Lodovichi, Mariela V. & Blanco, Aníbal M. & Chantre, Guillermo R. & Bandoni, J. Alberto & Sabbatini, Mario R. & Vigna, Mario & López, Ricardo & Gigón, Ramón, 2013. "Operational planning of herbicide-based weed management," Agricultural Systems, Elsevier, vol. 121(C), pages 117-129.
  3. Deckers, Jan, 2010. "Should the consumption of farmed animal products be restricted, and if so, by how much?," Food Policy, Elsevier, vol. 35(6), pages 497-503, December.
  4. Grovermann, Christian & Schreinemachers, Pepijn & Berger, Thomas, 2012. "Private and Social Levels of Pesticide Overuse in Rapidly Intensifying Upland Agriculture in Thailand," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126341, International Association of Agricultural Economists.
  5. Kusiima, Jamil M. & Powers, Susan E., 2010. "Monetary value of the environmental and health externalities associated with production of ethanol from biomass feedstocks," Energy Policy, Elsevier, vol. 38(6), pages 2785-2796, June.
  6. Lobley, Matt & Turner, Martin M. & MacQueen, Greg & Wakefield, Dawn, 2005. ""Born out of Crisis": an analysis of moorland management agreements on Exmoor; final report," Research Reports 31750, University of Exeter, Centre for Rural Policy Research.
  7. Posthumus, H. & Rouquette, J.R. & Morris, J. & Gowing, D.J.G. & Hess, T.M., 2010. "A framework for the assessment of ecosystem goods and services; a case study on lowland floodplains in England," Ecological Economics, Elsevier, vol. 69(7), pages 1510-1523, May.
  8. Nikolinka Shakhramanyan & Uwe Schneider & Bruce McCarl, 2013. "US agricultural sector analysis on pesticide externalities – the impact of climate change and a Pigovian tax," Climatic Change, Springer, vol. 117(4), pages 711-723, April.
  9. Finger, Robert, 2011. "Reductions of Agricultural Nitrogen Use Under Consideration of Production and Price Risks," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114356, European Association of Agricultural Economists.
  10. Zuniga Gonzalez, Carlos Alberto, 2012. "Total factor productivity and Bio Economy effects," MPRA Paper 49355, University Library of Munich, Germany, revised 13 Nov 2012.
  11. Szucs, Istvan & Fekete-Farkas, Maria & Vinogradov, Szergey A., 2008. "A New Methodology For The Estimation Of Land Value," Bulletin of the Szent Istvan University 43403, Szent Istvan University, Faculty of Economics and Social Sciences.
  12. Hounsome, Barry & Edwards, Rhiannon T. & Edwards-Jones, Gareth, 2006. "A note on the effect of farmer mental health on adoption: The case of agri-environment schemes," Agricultural Systems, Elsevier, vol. 91(3), pages 229-241, December.
  13. Argiles, Josep M. & Brown, Nestor Duch, 2010. "A comparison of the economic and environmental performances of conventional and organic farming: evidence from financial statements," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 11(1), January.
  14. Mercedes Beltrán-Esteve & Andrés J. Picazo-Tadeo & Ernest Reig-Martínez, 2012. "What makes a citrus farmer go organic? Empirical evidence from Spanish citrus farming," Working Papers 1205, Department of Applied Economics II, Universidad de Valencia.
  15. Baylis, Kathy & Peplow, Stephen & Rausser, Gordon & Simon, Leo, 2008. "Agri-environmental policies in the EU and United States: A comparison," Ecological Economics, Elsevier, vol. 65(4), pages 753-764, May.
  16. Caroline Ignell & Peter Davies & Cecilia Lundholm, 2013. "Swedish Upper Secondary School Students’ Conceptions of Negative Environmental Impact and Pricing," Sustainability, MDPI, Open Access Journal, vol. 5(3), pages 982-996, March.
  17. Alinsato, Alastaire Sèna, 2008. "An analytical framework toward the use of emission taxes: The Study case of Cotonou (Rep of Benin)," MPRA Paper 20952, University Library of Munich, Germany, revised 24 Feb 2010.
  18. Finger, Robert, 2012. "Nitrogen use and the effects of nitrogen taxation under consideration of production and price risks," Agricultural Systems, Elsevier, vol. 107(C), pages 13-20.
  19. Mercedes Beltrán & Ernest Reig, 2014. "Comparing conventional and organic citrus grower efficiency in Spain," Working Papers 1406, Department of Applied Economics II, Universidad de Valencia.

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