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External Costs of Agricultural Production in the United States


  • Tegtmeier, Erin M
  • Duffy, Michael


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.

Suggested Citation

  • Tegtmeier, Erin M & Duffy, Michael, 2004. "External Costs of Agricultural Production in the United States," Staff General Research Papers Archive 12659, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:12659

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    1. Milazzo, M.F. & Spina, F. & Cavallaro, S. & Bart, J.C.J., 2013. "Sustainable soy biodiesel," Renewable and Sustainable Energy Reviews, Elsevier, vol. 27(C), pages 806-852.
    2. Ghimire, Narishwar & Woodward, Richard T., 2013. "Under- and over-use of pesticides: An international analysis," Ecological Economics, Elsevier, vol. 89(C), pages 73-81.
    3. repec:eee:rensus:v:74:y:2017:i:c:p:1119-1130 is not listed on IDEAS
    4. David Manuel-Navarrete & Gilberto Gallopín, 2012. "Feeding the world sustainably: knowledge governance and sustainable agriculture in the Argentine Pampas," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 14(3), pages 321-333, June.
    5. Phalan, Ben, 2009. "The social and environmental impacts of biofuels in Asia: An overview," Applied Energy, Elsevier, vol. 86(Supplemen), pages 21-29, November.
    6. Burja Camelia & Burja Vasile, 2016. "The Economic Farm Size And Sustainable Value Disparities Between Romania And The Eu States," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 50-57, February.
    7. 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, vol. 30(1), pages 1-19, February.
    8. Jongeneel, Roel & Polman, Nico & van der Ham, Corinda, 2014. "Costs and benefits associated with the externalities generated by Dutch agriculture," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182705, European Association of Agricultural Economists.
    9. Paolo Cupo & Rinalda Alberta Di Cerbo, 2016. "The determinants of ranking in sustainable efficiency of Italian farms," RIVISTA DI STUDI SULLA SOSTENIBILITA', FrancoAngeli Editore, vol. 2016(2), pages 141-159.
    10. Rains, G.C. & Olson, D.M. & Lewis, W.J., 2011. "Redirecting technology to support sustainable farm management practices," Agricultural Systems, Elsevier, vol. 104(4), pages 365-370, April.
    11. Jean-Philippe Boussemart & Hervé Leleu & Oluwaseun Ojo, 2016. "Exploring cost dominance in crop farming systems between high and low pesticide use," Journal of Productivity Analysis, Springer, vol. 45(2), pages 197-214, April.
    12. 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 563, University of Wisconsin, Agricultural and Applied Economics.
    13. Noble, Andrew D. & Bossio, Deborah & Pretty, J. & Penning de Vries, F., 2008. "Bright spots: pathways to ensuring food security and environmental integrity," IWMI Books, Reports H041602, International Water Management Institute.
    14. Van Passel, Steven & Nevens, Frank & Mathijs, Erik & Van Huylenbroeck, Guido, 2007. "Measuring farm sustainability and explaining differences in sustainable efficiency," Ecological Economics, Elsevier, vol. 62(1), pages 149-161, April.
    15. David Blandford, 2010. "Presidential Address: The Visible or Invisible Hand? The Balance Between Markets and Regulation in Agricultural Policy," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(3), pages 459-479.
    16. 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 52728, Agriculture and Agri-Food Canada.
    17. repec:ags:aare06:139909 is not listed on IDEAS
    18. Helen Scharber & Anita Dancs, 2016. "Do locavores have a dilemma? Economic discourse and the local food critique," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 33(1), pages 121-133, March.
    19. Patrizia Schwegler, 2015. "Economic valuation of environmental costs of soil erosion and the loss of biodiversity and ecosystem services caused by food wastage," Journal of Socio-Economics in Agriculture (Until 2015: Yearbook of Socioeconomics in Agriculture), Swiss Society for Agricultural Economics and Rural Sociology, vol. 8(2).
    20. Christof Gubler, 2014. "Potential des Anbaus und Absatzmo glichkeiten der Walnuss in der Schweiz," Journal of Socio-Economics in Agriculture (Until 2015: Yearbook of Socioeconomics in Agriculture), Swiss Society for Agricultural Economics and Rural Sociology, vol. 7(1).
    21. Tong Yen Dan, 2016. "A Cost-Benefit Analysis of Dike Heightening in the Mekong Delta," EEPSEA Research Report rr20160320, Economy and Environment Program for Southeast Asia (EEPSEA), revised Mar 2016.
    22. Tait, Peter R. & Cullen, Ross, 2006. "Some External Costs of Dairy Farming in Canterbury," 2006 Conference (50th), February 8-10, 2006, Sydney, Australia 109595, Australian Agricultural and Resource Economics Society.
    23. Duffy, Michael, 2008. "The Clock is Ticking for Rural America," Staff General Research Papers Archive 12582, Iowa State University, Department of Economics.

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