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External Costs of Agricultural Production in the United States


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  • Tegtmeier, Erin M
  • Duffy, Michael
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    Agricultural production affects environmental and human health. Many consequences are borne involuntarily rather than chosen because no formal market trading takes place for ecosystem functions or health attributes. These impacts, or externalities, may be quantified indirectly by assigning dollar values through a process called valuation, which informs agricultural production and policy decisions. This study estimates external costs of agricultural production in the United States in the areas of natural resources, wildlife and ecosystem biodiversity and human health. Valuation studies are reviewed and revised to compile aggregate figures. External costs are estimated at $5.7 to $16.9 billion (ï¾£3.3 to ï¾£9.7 billion) annually. Impacts due to crop production are figured to be $4969 to $16,151 million per year. Livestock production contributes $714 to $739 million to external costs. Using 168.8 million hectares of cropland in the United States, external cost per cropland hectare is calculated at $29.44 to $95.68 (ï¾£16.87 to ï¾£54.82). Further research is needed to refine these estimates and include categories not covered in this study. The societal burden of these costs calls for a restructuring of agricultural policy that shifts production towards methods that lessen external impacts.

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    Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 12659.

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    Date of creation: 01 Jan 2004
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    Publication status: Published in International Journal of Agricultural Sustainability 2004, vol. 2 no. 1, pp. 1-20
    Handle: RePEc:isu:genres:12659

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    Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
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    Cited by:
    1. Rains, G.C. & Olson, D.M. & Lewis, W.J., 2011. "Redirecting technology to support sustainable farm management practices," Agricultural Systems, Elsevier, Elsevier, vol. 104(4), pages 365-370, April.
    2. Van Passel, Steven & Nevens, Frank & Mathijs, Erik & Van Huylenbroeck, Guido, 2007. "Measuring farm sustainability and explaining differences in sustainable efficiency," Ecological Economics, Elsevier, Elsevier, vol. 62(1), pages 149-161, April.
    3. Craven, Ian, 2006. "Environmental and Economic Impact Assessments of Environmental Regulations for the Agriculture Sector: A Case Study of Potato Farming," Economic and Market Information, Agriculture and Agri-Food Canada 52728, Agriculture and Agri-Food Canada.
    4. David Manuel-Navarrete & Gilberto Gallopín, 2012. "Feeding the world sustainably: knowledge governance and sustainable agriculture in the Argentine Pampas," Environment, Development and Sustainability, Springer, Springer, vol. 14(3), pages 321-333, June.
    5. Tait, Peter R. & Cullen, Ross, 2006. "Some External Costs of Dairy Farming in Canterbury," 2006 Conference (50th), February 8-10, 2006, Sydney, Australia, Australian Agricultural and Resource Economics Society 109595, Australian Agricultural and Resource Economics Society.
    6. Duffy, Michael, 2008. "The Clock is Ticking for Rural America," Staff General Research Papers, Iowa State University, Department of Economics 12582, Iowa State University, Department of Economics.
    7. Mitchell, Paul D., 2011. "Estimating Soil Erosion and Fuel Use Changes and Their Monetary Values with AGSIM: A Case Study for Triazine Herbicides," Staff Paper Series, University of Wisconsin, Agricultural and Applied Economics 563, University of Wisconsin, Agricultural and Applied Economics.
    8. Ghimire, Narishwar & Woodward, Richard T., 2013. "Under- and over-use of pesticides: An international analysis," Ecological Economics, Elsevier, Elsevier, vol. 89(C), pages 73-81.
    9. repec:ags:aare06:139909 is not listed on IDEAS
    10. Pretty, J.N. & Ball, A.S. & Lang, T. & Morison, J.I.L., 2005. "Farm costs and food miles: An assessment of the full cost of the UK weekly food basket," Food Policy, Elsevier, Elsevier, vol. 30(1), pages 1-19, February.


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