3
External Costs of Agricultural Production
in the United States
Erin M. Tegtmeier and Michael D. Duffy
Introduction
All agricultural practices impact the environment. Industrial agriculture is increas-
ingly being recognized for its negative consequences on the environment, public
health and rural communities. Soil loss and erosion reduce crop yields and impair
natural and manmade water systems (Atwood, 1994; Clark et al, 1985; Crosson,
1986; Evans, 1996; Holmes, 1988; Pimentel et al, 1995). Runoff of agricultural
chemicals from farm fields contaminates groundwater and disrupts aquatic ecosys-
tems (Conway and Pretty, 1991; Pimentel et al, 1992; Pretty et al, 2003; USDA,
2000d; Waibel and Fleischer, 1998). Monocropping and feedlot livestock produc-
tion threaten diversity and may increase foodborne pathogens and antibiotic resist-
ance in humans, as well as pest resistance to chemical controls (Altieri, 1995; Iowa
State University and The University of Iowa Study Group, 2002; National Research
Council, 1989). The health of rural communities is affected negatively by declin-
ing community involvement and increased division of social classes (Bollman and
Bryden, 1997; Flora et al, 2002).
The costs of impacts are external to agricultural systems and markets for prod-
ucts. They are borne by society at large. Assessing the monetary costs of such
impacts aids in fully identifying their consequences. Cost estimates can inform
and guide policy makers, researchers, consumers and agricultural producers and
may encourage a closer look at the impacts of industrial agriculture.
According to Western neoclassical economics, well-defined property rights
ensure that an owner benefits exclusively from use of property and wholly incurs
the costs of use. However, in many circumstances, costs are borne by those who are
not decision makers. Impacts of agriculture involve costs to individuals and com-
munities who are not making decisions about production methods. These conse-
quences indicate when property rights are not well defined and they represent
Reprinted from Tegtmeier E and Duffy A. 2004. The external costs of agricultural production in the
United States. Int. J. Agric. Sust. 2(1), 155–175, Earthscan, London.