Overview to Four Volumes: Sustainable Agriculture and Food xxviiExternalities in the agricultural sector have at least four features: (i) their costs
are often neglected; (ii) they often occur with a time lag; (iii) they often damage
groups whose interests are not well represented in political or decision-making
processes; and (iv) the identity of the source of the externality is not always known.
For example, farmers generally have few incentives to prevent some pesticides
escaping to water-bodies, to the atmosphere and to nearby natural systems as they
transfer the full cost of cleaning up the environmental consequences to society at
large. In the same way, pesticide manufacturers do not pay the full cost of all their
products, as they do not have to pay for any adverse side effects that may occur.
Partly as a result of a lack of information, there is little agreement on the eco-
nomic costs of externalities in agriculture. Some authors suggest that the current
system of economic calculations grossly underestimates the current and future
value of natural capital (Abramovitz, 1997; Costanza et al, 1997; Daily, 1997;
MEA, 2005). However, such valuation of ecosystem services remains controversial
because of methodological and measurement problems (Georghiou et al, 1998;
Hanley et al, 1998; Farrow et al, 2000; Carson, 2000) and because of the role
monetary values have in influencing public opinions and policy decisions.
What has become clear in recent years is that the success of modern agriculture
has masked some significant negative externalities, with environmental and health
problems recently costed for Ecuador, China, Germany, the Philippines, the UK
and the USA (Pingali and Roger, 1995; Crissman et al, 1998; Waibel et al, 1999;
Pretty et al, 2000, 2001, 2003a, 2005; Cuyno et al, 2001; Norse et al, 2001; But-
tel, 2003; Tegtmeier and Duffy, 2004; Sherwood et al, 2005). These environmen-
tal costs begin to change conclusions about which agricultural systems are the most
efficient, and suggest that alternatives which reduce externalities should be
sought.
Examples of costs in developing countries include The Philippines, where agri-
cultural systems that do not use pesticides result in greater net social benefits
because of the reduction in illnesses among farmers and their families, and the
associated treatment costs (Rola and Pingali, 1993; Pingali and Roger, 1995). In
China, the externalities of pesticides used in rice systems cause US$1.4 billion of
costs per year through health costs to people, and adverse effects on both on- and
off-farm biodiversity (Norse et al, 2001). In Ecuador, annual mortality in the
remote highlands due to pesticides is among the highest reported anywhere in the
world at 21 people per 100,000 people, and so the economic benefits of IPM-
based systems that eliminate these effects are increasingly beneficial (Sherwood et
al, 2005). In the UK, agricultural externalities have been calculated to be some
£1.5 billion per year in the late 1990s (Pretty et al, 2000, 2001). These, though,
are exceeded by the environmental costs of transporting food from farm to retail
outlet to place of consumption – these ‘food miles’ in the UK result in a further
£3.8 billion of environmental costs per year (Pretty et al, 2005).
These data suggest that all types of agricultural systems impose some kinds of
costs on the environment. It is, therefore, impossible to draw a boundary between
what is and is not sustainable. If the external costs are high and can be reduced by