IDEAS home Printed from https://ideas.repec.org/p/rep/wpaper/2016-04.html
   My bibliography  Save this paper

How Important are Agricultural Externalities? A Framework for Analysis and Application to Dutch Agriculture

Author

Listed:
  • Roel Jongeneel
  • Nico Polman
  • G. Cornelis van Kooten

Abstract

In this paper, we develop a theoretical model for identifying the appropriate welfare measures associated with the positive and negative externalities of agricultural production. Implications of methodological assumptions are discussed, and the model is then used to estimate the costs and benefits associated with the negative and positive externalities of the Dutch agricultural sector. Efforts are made to cross-validate cost estimates empirically, and we also estimate the value of the non-commodity outputs that Dutch farmers provide. The non-market costs and benefits attributable to farming are then set against the value-added of the agricultural sector as a whole. Total value-added benefits are estimated to be €10,604 million a year. The external annual costs are calculated to be €1,868 million, significantly greater than estimated external gross benefits of €263 million, but much less than value added. Using all available information, total average annual net benefits from agriculture in the Netherlands are estimated to be €8,736 million per year for the period 2005 to 2012. Nonetheless, net external costs are equivalent to €849 per ha of arable, horticultural and pasture land, and are high relative to estimates found for other countries.

Suggested Citation

  • Roel Jongeneel & Nico Polman & G. Cornelis van Kooten, 2016. "How Important are Agricultural Externalities? A Framework for Analysis and Application to Dutch Agriculture," Working Papers 2016-04, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
  • Handle: RePEc:rep:wpaper:2016-04
    as

    Download full text from publisher

    File URL: http://web.uvic.ca/~repa/publications/REPA%20working%20papers/WorkingPaper2016-04.pdf
    File Function: Final version, 2016
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Pretty, J. N. & Brett, C. & Gee, D. & Hine, R. E. & Mason, C. F. & Morison, J. I. L. & Raven, H. & Rayment, M. D. & van der Bijl, G., 2000. "An assessment of the total external costs of UK agriculture," Agricultural Systems, Elsevier, vol. 65(2), pages 113-136, August.
    2. 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.
    3. Boyd, James & Banzhaf, Spencer, 2007. "What are ecosystem services? The need for standardized environmental accounting units," Ecological Economics, Elsevier, vol. 63(2-3), pages 616-626, August.
    4. Jules Pretty & Craig Brett & David Gee & Rachel Hine & Chris Mason & James Morison & Matthew Rayment & Gert Van Der Bijl & Thomas Dobbs, 2001. "Policy Challenges and Priorities for Internalizing the Externalities of Modern Agriculture," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 44(2), pages 263-283.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Adrian Sadłowski & Wioletta Wrzaszcz & Katarzyna Smędzik-Ambroży & Anna Matras-Bolibok & Anna Budzyńska & Marek Angowski & Stefan Mann, 2021. "Direct Payments and Sustainable Agricultural Development—The Example of Poland," Sustainability, MDPI, vol. 13(23), pages 1-20, November.
    2. Felix Schläpfer, 2020. "External Costs of Agriculture Derived from Payments for Agri-Environment Measures: Framework and Application to Switzerland," Sustainability, MDPI, vol. 12(15), pages 1-19, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Argiles, Josep M. & Brown, Nestor Duch, 2011. "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), pages 1-18, January.
    2. 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.
    3. Daniel Gaitán-Cremaschi & Frits K. Van Evert & Don M. Jansen & Miranda P. M. Meuwissen & Alfons G. J. M. Oude Lansink, 2018. "Assessing the Sustainability Performance of Coffee Farms in Vietnam: A Social Profit Inefficiency Approach," Sustainability, MDPI, vol. 10(11), pages 1-23, November.
    4. Felix Schläpfer, 2020. "External Costs of Agriculture Derived from Payments for Agri-Environment Measures: Framework and Application to Switzerland," Sustainability, MDPI, vol. 12(15), pages 1-19, July.
    5. 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.
    6. Thomas Vendryes, 2014. "Peasants Against Private Property Rights: A Review Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 28(5), pages 971-995, December.
    7. Chiara M. Travisi & Peter Nijkamp, 2009. "Managing environmental risk in agriculture: a systematic perspective on the potential of quantitative policy-oriented risk valuation," International Journal of Environmental Technology and Management, Inderscience Enterprises Ltd, vol. 11(1/2/3), pages 27-46.
    8. Frits K. Van Evert & Daniel Gaitán-Cremaschi & Spyros Fountas & Corné Kempenaar, 2017. "Can Precision Agriculture Increase the Profitability and Sustainability of the Production of Potatoes and Olives?," Sustainability, MDPI, vol. 9(10), pages 1-24, October.
    9. Bhim B Ghaley & Harpinder S Sandhu & John R Porter, 2015. "Relationship between C:N/C:O Stoichiometry and Ecosystem Services in Managed Production Systems," PLOS ONE, Public Library of Science, vol. 10(4), pages 1-14, April.
    10. 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.
    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. Gaitán-Cremaschi, Daniel & Kamali, Farahnaz Pashaei & van Evert, Frits K. & Meuwissen, Miranda P.M. & Oude Lansink, Alfons G.J.M., 2015. "Benchmarking the sustainability performance of the Brazilian non-GM and GM soybean meal chains: An indicator-based approach," Food Policy, Elsevier, vol. 55(C), pages 22-32.
    13. Baba, S.H. & Wani, S.A., 2018. "Ecosystem Management Approach for Agricultural Growth in Mountains: Farmers Perception of Ecosystem Services and Dis-Services in Kashmir-India," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277556, International Association of Agricultural Economists.
    14. Elena Tamburini & Paola Pedrini & Maria Gabriella Marchetti & Elisa Anna Fano & Giuseppe Castaldelli, 2015. "Life Cycle Based Evaluation of Environmental and Economic Impacts of Agricultural Productions in the Mediterranean Area," Sustainability, MDPI, vol. 7(3), pages 1-21, March.
    15. 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).
    16. Lukas Folkens & Volker Wiedemer & Petra Schneider, 2020. "Monetary Valuation and Internalization of Externalities in German Agriculture Using the Example of Nitrate Pollution: A Case-Study," Sustainability, MDPI, vol. 12(16), pages 1-19, August.
    17. Glendining, M.J. & Dailey, A.G. & Williams, A.G. & Evert, F.K. van & Goulding, K.W.T. & Whitmore, A.P., 2009. "Is it possible to increase the sustainability of arable and ruminant agriculture by reducing inputs?," Agricultural Systems, Elsevier, vol. 99(2-3), pages 117-125, February.
    18. 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.
    19. 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).
    20. Andrew J Tanentzap & Anthony Lamb & Susan Walker & Andrew Farmer, 2015. "Resolving Conflicts between Agriculture and the Natural Environment," PLOS Biology, Public Library of Science, vol. 13(9), pages 1-13, September.

    More about this item

    Keywords

    environmental spillovers; applied welfare measurement; agricultural externalities; agricultural value added; non-agricultural commodities;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rep:wpaper:2016-04. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: G.C. van Kooten (email available below). General contact details of provider: https://edirc.repec.org/data/devicca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.