Reality Cheques 25As agricultural systems shape the very assets on which they rely for inputs, a vital
feedback loop occurs from outcomes to inputs. Donald Worster’s three principles for
good farming capture this idea. It is farming that makes people healthier, farming that
promotes a more just society, and farming that preserves the earth and its networks of
life. He says ‘the need for a new agriculture does not absolve us from the moral duty
and common-sense advice to farm in an ecologically rational way. Good farming pro-
tects the land, even when it uses it.’^5 Thus sustainable agricultural systems tend to have
a positive effect on natural, social and human capital, whilst unsustainable ones feed
back to deplete these assets, leaving less for future generations. For example, an agricul-
tural system that erodes soil whilst producing food externalizes costs that others must
bear. But one that sequesters carbon in soils through organic matter accumulation
helps to mediate climate change. Similarly, a diverse agricultural system that enhances
on-farm wildlife for pest control contributes to wider stocks of biodiversity, whilst
simplified modernized systems that eliminate wildlife do not. Agricultural systems that
offer labour-absorption opportunities, through resource improvements or value-added
activities, can boost economies and help to reverse rural-to-urban migration patterns.
Agriculture is, therefore, fundamentally multifunctional. It jointly produces
many unique non-food functions that cannot be produced by other economic sec-
tors so efficiently. Clearly, a key policy challenge, for both industrialized and devel-
oping countries, is to find ways to maintain and enhance food production. But the
key question is: can this be done whilst seeking both to improve the positive side
effects and to eliminate the negative ones? It will not be easy, as past agricultural
development has tended to ignore both the multifunctionality of agriculture and
the pervasive external costs.^6
This leads us to a simple and clear definition for sustainable agriculture. It is
farming that makes the best use of nature’s goods and services whilst not damaging
the environment.^7 It does this by integrating natural processes such as nutrient
cycling, nitrogen fixation, soil regeneration and natural enemies of pests into food
production processes. It also minimizes the use of non-renewable inputs that dam-
age the environment or harm the health of farmers and consumers. It makes better
use of the knowledge and skills of farmers, so improving their self-reliance, and it
makes productive use of people’s capacities to work together to solve common
management problems. Through this, sustainable agriculture also contributes to a
range of public goods, such as clean water, wildlife, carbon sequestration in soils,
flood protection and landscape quality.
Putting Monetary Values on Externalities
Most economic activities affect the environment, either through the use of natural
resources as an input or by using the ‘clean’ environment as a sink for pollution.
The costs of using the environment in this way are called externalities. As they are
side effects of the economic activity, they are external to markets, and so their costs
are not part of the prices paid by producers or consumers. When such externalities