Eggs for 79¢ a dozen?
Ground beef for $1.99 a pound?

Many of us know in our gut that these prices cannot reflect the true cost of food. We know that the seemingly cheap food delivered by the industrialized global food system results in environmental degradation, exploited labor and chronic health problems. Yet, coming up with numbers to estimate the “true” cost of food is difficult, since polluted waterways and poorly treated farmworkers do not come with price tags.

Supporters of industrial food point to its benefits and argue that our living standards would be lower without it. They contend that cheap food is delivered thanks to two important economic principles. For one, economies of scale mean that bigger is better as larger farms can more efficiently utilize land, energy and other resources to grow food at a lower per bushel or per pound cost than small farms. Second, as international trade has increased, facilitated by inexpensive transportation and trade agreements, areas of the world that are relatively better at growing apples, grow apples. Places that are relatively better at growing wheat, grow wheat. Places that are better for grazing animals, raise cattle or sheep. Everyone benefits when regions take advantage of their relative endowments – the climate, type of soil, skills of workers and other attributes. As the agriculture sector has become industrialized, along with food processing industries, food is more plentiful and inexpensive, advocates claim. Moving away from industrialized food will lead to increased food insecurity, higher prices, and environmental degradation as more land and fossil fuels will be required to grow less food.

Industrial food would be a miracle if not for one detail: external costs. The prices shoppers see at the supermarket reflect private costs such as wages and the cost of land, tractors, tools, seeds and other inputs. They may also reflect government subsidies. But they do not usually reflect what economists refer to as “externalities.” Externalities, or external costs, are unintended consequences of an economic activity that are borne by the natural environment, communities, or other third parties. Advocates for industrial food argue that the benefits outweigh these costs but a closer look at the extent of these costs and the difficulties in measuring them may make cheap food not taste so good.

External Costs Abound

Pesticide usage, including herbicides, insecticides, and fungicides, leads to one category of externalities, which includes:

 

• Contamination of surface and groundwater;
• Human health impacts such as neurological damage, cancer and acute and chronic pesticide poisoning;
• Loss of beneficial insects;
• Loss of biodiversity;
• Colony collapse disorder in bees;
• Current and future crop losses due to pesticide drift and the cumulative impact on soil health
• Emergence and spread of an increased number of herbicide-resistant weeds (superweeds) and superpests.

Concentrated animal feeding operations (CAFOs) also push costs onto the environment. CAFOs force such a large number of animals to live within a small space, resulting in hundreds of millions of tons of manure. Since living in close quarters facilitates the spread of diseases, CAFO farmers administer non-therapeutic antibiotics to the animals. Some farmers also dose animals with growth hormones. Antibiotics and growth hormones contaminate the manure, making what was traditionally an agricultural resource – as fertilizer – into a significant external cost. These “manure lagoons” leak into waterways and contaminate the water supply. Antibiotic-resistance is also a consequence.

CAFOs impact the communities in which they are situated. Noxious fumes from the manure lagoons cause air pollution. Ammonia, methane, volatile organic compounds among other pollutants impact the livability of rural communities as well as the health of the residents. Journalist David Kirby in his book Animal Factory follows rural communities where farms have transitioned from traditional livestock and dairy operations into CAFOs. While these stories are anecdotal, it is hard to deny the external costs borne by these communities as noxious fumes infiltrate homes in Yakima Valley, Washington, industrial dairies contaminate waterways in Illinois, and recreational activities such as fishing and swimming are destroyed by intensive hog farming on the Neuse River in North Carolina.

Inexpensive food may be undervalued by consumers, leading to waste. Each year, 14 million tons of food are thrown out each year, which is 106 pounds per person, according to the Environmental Protection Agency. Little of it is composted; almost all of it is incinerated or landfilled. While wasting food may feel immoral in a world where millions go hungry, it also has external costs. Landfills and incinerators produce greenhouse gases, particularly methane, which is twenty times as harmful to the atmosphere as carbon dioxide.