Agriculture Reference
In-Depth Information
system that erodes soil while producing food externalizes costs that others
must bear. But a system 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, while 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 sectors as efficiently. Clearly, a key policy challenge, for
both industrialized and developing countries, is to find ways in which to
maintain and enhance food production. But the key question is: can this
be done while improving the positive side effects and eliminating 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 of sustainable agriculture.
It is farming that makes the best use of nature's goods and services while
not damaging the environment. 7 Sustainable farming does this by inte-
grating natural processes, such as nutrient cycling, nitrogen fixation, soil
regeneration and natural pest control, within food production processes.
It also minimizes the use of non-renewable inputs that damage the
environment or harm the health of farmers and consumers. It makes better
use of farmers' knowledge and skills, thereby improving their self-reliance,
and it makes productive use of people's capacities to work together in
order 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 . Because externalities comprise the side effects of
economic activity, they are external to markets, and so their costs are not
part of the prices paid by producers or consumers. When such external-
ities are not included in prices, they distort the market by encouraging
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