External Costs of Agricultural Production in the United States

Abstract

Agricultural production affects environmental and human health. Many consequences are borne involuntarily rather than chosen because no formal market trading takes place for ecosystem functions or health attributes. These impacts, or externalities, may be quantified indirectly by assigning dollar values through a process called valuation, which informs agricultural production and policy decisions. This study estimates external costs of agricultural production in the United States in the areas of natural resources, wildlife and ecosystem biodiversity and human health. Valuation studies are reviewed and revised to compile aggregate figures. External costs are estimated at $5.7 to $16.9 billion (£3.3 to £9.7 billion) annually. Impacts due to crop production are figured to be $4969 to $16,151 million per year. Livestock production contributes $714 to $739 million to external costs. Using 168.8 million hectares of cropland in the United States, external cost per cropland hectare is calculated at $29.44 to $95.68 (£16.87 to £54.82). Further research is needed to refine these estimates and include categories not covered in this study. The societal burden of these costs calls for a restructuring of agricultural policy that shifts production towards methods that lessen external impacts.