Reality Cheques 27Using a similar framework of analysis, the external costs in the US amount to
nearly £13 billion per year.^14
How do all these costs arise? Pesticides, nitrogen and phosphorus nutrients,
soil, farm wastes and microorganisms escape from farms to pollute ground and
surface water. Costs are incurred by water delivery companies, and then passed
onto their customers, to remove these contaminants, to pay for restoring water-
courses following pollution incidents and eutrophication, and to remove soil from
water. Using UK water companies’ returns for both capital and operating expend-
iture, we estimated annual external costs to be £125 million for the removal of
pesticides below legal standards, £16 million for nitrate, £69 million for soil, and
£23 million for Cryptosporidium.^15 These costs would be much greater if the policy
goal were complete removal of all contamination.
Agriculture also contributes to atmospheric pollution through the emissions of
four gases: methane from livestock, nitrous oxide from fertilizers, ammonia from
livestock wastes and some fertilizers, and carbon dioxide from energy and fossil
fuel consumption and loss of soil carbon. These in turn contribute to atmospheric
warming (methane, nitrous oxide and carbon dioxide), ozone loss in the strato-
sphere (nitrous oxide), acidification of soils and water (ammonia) and eutrophica-
tion (ammonia). The annual cost for these gases is some £310 million.^16 A healthy
soil is vital for agriculture, but modern farming has accelerated erosion, primarily
through the cultivation of winter cereals, the conversion of pasture to arable, the
removal of field boundaries and hedgerows, and overstocking of livestock on grass-
lands. Off-site costs arise when soil carried off farms by water or wind blocks
ditches and roads, damages property, induces traffic accidents, increases the risk of
floods, and pollutes water through sediments and associated nitrate, phosphate
and pesticides. These amount to £14 million per year. Carbon in organic matter in
soils is also rapidly lost when pastures are ploughed or when agricultural land is
intensively cultivated, and adds another £82 million to the annual external costs.
Modern farming has had a severe impact on wildlife in the UK. More than
nine-tenths of wildflower-rich meadows have been lost since the 1940s, together
with a half of heathland, lowland fens, and valley and basin mires, and a third to a
half of ancient lowland woods and hedgerows. Species diversity is also declining in
the farmed habitat itself. Increase use of drainage and fertilizers has led to grass
monocultures replacing flower-rich meadows, overgrazing of uplands has reduced
species diversity, and herbicides have cut diversity in arable fields. Hedgerows were
removed at a rate of 18,000 kilometres a year between the mid-1980s and 1990s.
Farmland birds have particularly suffered, with the populations of nine species fall-
ing by more than a half in the 25 years to 1995.^17 The costs of restoring species and
habitats under Biodiversity Action Plans were used as a proxy for the costs of wild-
life and habitat losses, and together with the costs of replacing hedgerows, stone-
walls and bee colonies, bring the annual costs to £126 million.
Pesticides can affect workers engaged in their manufacture, transport and dis-
posal, operators who apply them in the field, and the general public. But there is
still great uncertainty because of differing risks per product, poor understanding of