Agriculture and Human Values 21: 2735, 2004.

2004 Kluwer Academic Publishers. Printed in the Netherlands.

Expressing values in agricultural markets: An economic policy perspective

David S. Conner
Department of Applied Economics and Management, Cornell University, Ithaca, New York, USA

Accepted in revised form October 30, 2002

Abstract. Many mechanisms now exist for consumers to express progressive values in purchasing decisions.
Although demand for such goods has grown, these goods remain the purview of small niche markets. Focusing
on the market for agricultural goods (and the choice between the paradigms of industrialized versus sustainable
agriculture), this paper discusses three major reasons (market failures, entry barriers, and biased policies) why it is
difficult for consumers to express their values for a more sustainable system in this way, and why policy change is
needed to create a fairer playing field. The current policy, voluntary labeling, is inadequate. A new set of policies,
including taxes and subsidies to correct market failures, is needed to create opportunities for consumers to support
values such as health, community, and stewardship.
Key words: Consumer values, Market failures, Markets, Organic label, Policy, Sustainable agriculture
Abbreviations: SA Sustainable Agriculture; IA Industrialized Agriculture
David S. Conner, PhD, is a Research Associate in the Department of Applied Economics and Management,
Cornell University. He is a member of the Emerging Markets Group and the Northeast Organic Network (NEON).
His research interests include local organic agriculture, consumer education and preferences, experimental economics, and policy analysis. He was an organic farmer and farm manager in Pennsylvania before returning to
academia.
Introduction
In recent years, we have witnessed the growth of
organic and sustainable agriculture and other products
that appeal to consumers values. Increasing numbers
of consumers are purchasing products that are friendly
to the environment, produced without animal testing,
return fair wages to workers and producers, etc. Labels
touting traits such as green, cruelty-free, fair trade,
no child labor and reflecting other progressive values
are common today. Voluntary labeling has become the
de facto policy for the expression of such values in the
marketplace; it is up to the consumer to seek out and
purchase goods with favorable traits, usually at greater
search and monetary cost.
Despite its rapid growth over the last decade (up to
20% per year, according to Dimitri and Greene, 2000),
the market for organic and sustainable agriculture
remains a niche market, quite small (about 2%) compared to the total sales of food (Dimitri and Greene,
2000; Cook, 1999). We should be heartened by past
success, yet far from satisfied: the majority of goods
purchased, in and out of agriculture, can usually safely
be assumed to have the lowest permissible environmental and social standards unless otherwise noted
(Grossman, 1981). Many believe that globalization

has exacerbated this race to the bottom (e.g., Daly,

1999). Lowering these standards in pursuit of competitiveness may be a good way to sell products in the
global economy, but it is less effective in sustaining a
place where people would want to live. In days past
when most of what people bought was produced in
ones own village or region, information on how a
product was produced was easy to come by and the
impacts would be felt much more immediately; those
producing in a dangerous or exploitative manner could
be boycotted and shamed by their neighbors, and the
problem could be easily corrected. With the advent of
specialization and integrated global economies dominated by trans-national corporations, information is
harder to acquire, the impacts are less direct, and overlooking such breaches in values in exchange for a low
price is much easier. This trend has brought both more
choice and more responsibility to the consumer, who
must trade off between lower price and higher ethics
within a constrained budget.
This paper focuses on the market for sustainable
agricultural (SA) products. It discusses questions such
as, why do so few people seem to express their values
in the marketplace in this way? Why is it so difficult for
such products to compete in the mainstream industrial
food markets? Are voluntary labeling initiatives, such

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DAVID S. C ONNER

as the organic label, the sufficient and proper mechanism to support the expression of these values? If not,
what should be done and what are the likely outcomes?

Choices in the marketplace: Industrial versus

sustainable agriculture products
The recent history of agriculture in the US has largely
been the story of its industrialization. Industrial agriculture (IA) is marked by fewer, larger, highly mechanized and specialized farms that are capital intensive,
tend to emphasize monocultures of homogeneous
crops, are dependent on purchased inputs (particularly fossil fuel energy and chemicals like fertilizers
and pesticides), and in general, attempt to use these
inputs to transform nature in order to create a favorable
growing environment. Industrial farms are also increasingly vertically integrated with input suppliers and
marketing services, often via contracts. The IA movement has achieved in large measure its goals of lower
food prices and increased yields (Antle, 1999), but is
widely criticized for its neglect of the environment,
community well-being, and local participation (Ikerd,
1995).
One reason for IAs success to these policy ends
is the underlying policy and property rights environment, under which producers are able to externalize
many of the costs of this production and distribution
system onto society as a whole. Its dominance of the
agricultural scene is a product of research, extension,
and education efforts and policies that have advocated
and rewarded the goals of increasing yield, efficiency,
and profit (Strange, 1988 ). Since food is a commodity
everyone consumes every day, the pursuit of cheap
food via industrialization is a way to increase the
buying power of poor people (who tend to spend a
higher percentage of their income on food). This process is also widely seen as being a necessary precursor
to industrialization in general, as it has freed labor
to move out of farming into manufacturing, service
provision, etc.
In recent years, an alternative paradigm, the sustainable agriculture (SA) movement, has arisen in part
as a response to criticism and skepticism of IA. Sustainable agriculture (SA) is defined by smaller farms,
producing a diversity of heterogeneous niche outputs; sustainable farms tend to recycle inputs, internalize costs, and, in general, use the producers knowledge of the complexities of the biological systems
to create a harmonious balance with, not dominion
over, nature. The USDA defines sustainable agriculture as: an integrated system of plant and animal
production practices having a site-specific application
that will, over the long term: satisfy human food

and fiber needs; enhance environmental quality and

the natural resource base upon which the agricultural
economy depends; make the most efficient use of
nonrenewable resources and on-farm resources and
integrate, where appropriate, natural biological cycles
and controls; sustain the economic viability of farm
operations; enhance the quality of life for farmers and
society as a whole (Food, Agriculture, Conservation,
and Trade Act of 1990). It is important to note that
these depictions of IA and SA lie at the extreme ends
of a continuum, with most if not all farms falling
in between the two. The division into two distinct
paradigms is to illustrate critical choices we make as
to the nature of our food system.
Consumers choose IA products in part because they
prefer those traits. However, as will be discussed in
greater detail below, SA faces many obstacles that
prevent its competing with IA in a fair race for the
consumers dollar. Furthermore, it is also not clear that
consumers truly consider the full implications of their
purchases when making decisions at the marketplace.
The market fails to give consumers all of the information needed for a broader sense of the choice they
are making. The world would look very different if
consumers primarily bought, as two extremes, whole
foods directly from a local organic family farmer as
opposed to processed foods made with a variety of
imported ingredients grown on corporate, industrial
farms and delivered via grocery store channels. But
this choice of worlds is not presented to consumers.
Few if any would choose the degree of soil erosion,
groundwater pollution, aquifer depletion, species
extinction, fossil fuel consumption, rural community
devastation, etc., that we have experienced with the
advent of IA. Yet, this is what the sum of millions individual decisions has created, despite good intentions
by farmers (who adopt potentially destructive IA practices because they are in a vicious cycle of competition) and universities/government agencies (who are
only now realizing the extent of the drawbacks of these
applications).
Are our individual values really reflected in our
society? Why do the sum effects of our economic
decisions result in outcomes that few would ever
choose? In part, it is due to the peculiar way our society
compartmentalizes expression of values. Altruism and
vision are expressed in church, donations to charities,
and at the ballot box; but in the job and product markets, we tend to look out for number one and pursue
our narrow interests with little regard for the wider
implications of these actions on our fellow humans
and our planet. Employers tell a worker soon to be
laid off, its not personal, its just business, as if
this excuses everything. We protest to try to block
Wal-Mart from coming to our town and send let-

E XPRESSING VALUES IN AGRICULTURAL MARKETS

ters demanding human rights in China and Myanmar,

then turn around and buy cheap sweatshop-produced
trinkets at these big box retail stores. The lower prices
and greater convenience lure us into supporting these
enterprises despite their questionable ethical standing.
The burden is on the progressive producers to get
consumers to change their behavior and support them.
Since these producers are numerous, often small and
scattered (and already charging a higher price because
they are paying a living wage, treating the environment responsibly, etc.), it is difficult for them to
organize and get the message across. The market fails
to give consumers all of the information needed to
make purchases with awareness of the consequences
and implicit tradeoffs, even those with the desire to
express these values in their purchases.
As citizens of democratic nations with free market
economies, we have a great deal of power and responsibility, both as citizens and consumers. We are made
aware of our responsibility to vote and participate
in political decision-making in civics class and with
election season commercials, yet rarely are we encouraged to exercise our consumer power by guiding our
purchasing decisions.
Even if consumers were conscientious and fully
informed, the presence of a number of obstacles in
the market for SA products creates an unfair playing
field in favor of IA, making it difficult for consumers
to express their values in the marketplace. A look at
each of these three types of obstacles market failures, entry barriers, and pro-IA policies will guide
a proposed policy environment that will address them.
Perhaps such changes would not result in a greater role
for SA: consumers may still choose IA products; but at
least we can be sure that the decisions were made on a
more even-handed and informed basis.

Market failures in industrial agriculture

It is difficult to argue that the current system is truly the
result of the free market. However, a commonly touted
benefit of IA is that it is efficient: hardened by the fire
of competition for profits in the marketplace, the IA
system has evolved as the winner of the survival of
the fittest race. The efficiency of the market system
has been touted by economists since Adam Smith.
The fundamental welfare theorems of economics state
that a market economy is (Pareto) optimal and that
any desired efficient outcome can be achieved by the
market price system with lump sum transfers initiated
by the state (see e.g., Mas-Colel et al., 1995). However,
the results of these theorems depend upon a number of
assumptions that are not always met: that all agents
pay/receive the full cost/benefit for all goods, take

29

prices as given, and have perfect information. When

the first assumption is violated (when prices do not
reflect true marginal social cost or benefit), economists call this phenomenon an incomplete or missing
market, or more commonly, a market failure. It is
also commonly understood that markets will fail to
efficiently provide public goods. In the presence of
such market failures, policy intervention is needed to
achieve the socially optimal state.1
Agriculture is rife with incomplete markets,
providing public goods (such as environmental services, landscape aesthetics, biodiversity habitat, etc.)
or imposing externalities without compensation. Such
cases have been commonly treated in the agricultural economics literature, much of it focusing on
the negative impacts of agriculture, particularly on
the environment (e.g., Hanley, 1991). (Prominent
examples include soil erosion, groundwater pollution,
aquifer depletion, and loss of biodiversity.) The role of
agriculture in providing public goods is also a common
topic in the literature (see Hanley, 1991).
One often overlooked category of external costs
inherent to modern agriculture is sociological or
community-based. Many observers believe that the
industrialization of agriculture (particularly the substitution of capital for labor, leading to larger units
of production and the resulting exodus from farming
of many families) has led to severe sociological and
economic problems in rural towns. Heady (1975)
describes the erosion of commercial activities in
merchandising, processing, and service sectors due to
the decrease in farming units and laborers, leading
to decaying rural communities (p. 7). Ginder et al.
(1985) found a drop in agribusiness (i.e., handlers
of inputs and outputs), retail, and service revenues.
Rural communities have suffered from a deterioration
of social life, loss of young leaders, and declining tax
revenues for schools and health and social services due
to the loss of farms and farm families (Heffernan and
Heffernan, 1986). Although the well-publicized farm
crisis may be over, forced exit from farming continues
and rural communities continue to search for identity
(Ikerd, 1999b).
Ikerd (2002) argues that the get big or get out
mentality of IA has further detrimental effect on rural
communities: it is difficult to love thy neighbor
when one of you must fail, when your own survival
depends on acquiring the neighbors bankrupt farm.
Goldschmidt (1978) reports that communities with a
larger number of operator-owned farms have healthier
social institutions than communities with fewer, larger
farms staffed by hired labor. Heffernan and Heffernan
(1986) also state that individuals have experienced
greater depression, substance abuse, mental illness,
and an increased reliance on food stamps, Medicaid,

30

DAVID S. C ONNER

etc. as a result of the farm crisis. Strange (1988) and

Ikerd (1999ac) echo these observations.
It is important to note that none of these effects
is deliberate or intended; it is a fact of externalities that such consequences arise because of actions
taken by agents that are perceived to be in his or
her interests. Given the economic situation they face,
these agents are merely responding to it, externalizing whichever costs they can (or more precisely,
ignoring these external costs). The changes in agriculture have exacerbated this situation: the transition from
a closed-loop model of agriculture (where farmers
used on-farm inputs and marketed their wares within a
small geographic area) to a open-loop model (featuring
inputs purchased off-farm and food sold throughout
the world) has led to an increase in externalities due
to a greater opportunity for the export of pollutants
(Heady, 1975). Any critique of modern agriculture
must address these environmental and sociological
effects.
In addition to external costs and public good provision, other types of market failures are also associated
with IA and its heavy use of agri-chemicals. Pimentel
et al. (1991) and Lewis et al. (1997), state that in
the aggregate, pesticide use leaves growers no better
off (in terms of crop loss due to pests) despite the
direct costs of purchase and application and all the
indirect cost mentioned above. Several caveats should
be mentioned. Pimentel et al. (1991) state a number
of reasons that account for this phenomenon: higher
cosmetic standards have raised the bar of what is too
damaged to be salable; pesticide use has supplanted
many sanitary and cultivation practices once used to
control pests. However, much of this can be explained
by pesticide resistance and bioaccumulation in pests
enemies. Lewis et al. (1997) refer to these phenomena
as fundamental consequences of reliance on interventions that are both disruptive and of diminishing
value because of countermoves of ecological systems
(p. 12245). Resistance to pesticides is seen as a grave
problem, rendering many of them ineffective (Antle,
1988; Committee on Strategies for the Management of
Pesticide Resistant Pest Populations, 1986).
If an individual farmer (or even everyone all at
once) would stop spraying the immediate results would
likely be devastating: without predators (and since
plants with pest resistance have not been naturally
selected for and natural soil fertility is so poor),
pests would eat and destroy crops virtually unchecked.
The ecosystem is so compromised that natural checks
would likely be ineffective, especially in the short
run.
Suppose for the sake of argument that given a return
to cultural and sanitary practices, former cosmetic
standards and a balanced ecosystem, crop losses would

be equal to current losses (with widespread use of

pesticides) (Pimentel et al. (1993) have found that 12
25% of all pesticide treatment costs are due to counteracting resistance, and that 50% of pest control is due
to natural enemies, 40% due to natural resistance, and
only 10% to pesticide use, so this is a somewhat plausible claim). Even so, a sort of prisoners dilemma
arises. Cooperating farmers could agree not to spray
and, in the long run, all be better off (get the same
yields without the cost of buying and applying pesticides). However, even if this was achieved, it is not a
stable equilibrium; everyone has the incentive to cheat:
each could wipe out the now susceptible pests from his
own plots, and have even higher yields until the predators began to die and the pests developed resistance
again (assuming the revenue gained from spraying is
greater than the cost).
Without knowledge of the long-term implications,
it makes sense why farmers began to use pesticides
in the first place: the bounce in production in early
years of use. But continued use has led to a treadmill
effect in which now they have had to spray everincreasing amounts of (and/or more potent) toxins to
just to keep from losing ground. Even biotechnologys
promise of reduced pesticide use has been questioned
(Benbrook, 2001).
Another classical economic phenomenon is at work
as well: the tragedy of the commons. The use of
pesticides as a last resort to prevent complete or devastating crop loss is a sort of commons. Every time an
individual in a given area uses a pesticide, it increases
the rate at which pests will become tolerant to it
(decreases the pests susceptibility). Even responsible
use decreases the effectiveness of the toxin both for her
and for her neighbors; overuse accelerates resistance.
The marginal return to using the toxin diminishes.
Yet in economic theory (and usually in practice), the
farmer will continue the practice as long as the return
to him (the average revenue product) is at or above
the cost of the toxin. As with the examples from economic theory (e.g., open access fishing or mining)
the result is that the commons is depleted and is not
efficiently utilized. Assigning property rights or otherwise restricting access to the commons is the familiar
remedy to achieve efficient resource allocation.
It is clear that current pesticide regulations fail
to address these market failures. The external costs,
discussed above, as well as the prisoners dilemma
and commons aspects, lead to the conclusion that a
laissez-faire policy will not result in an optimal allocation of resources. The use of agri-chemicals is a
key component of IA: it greatly decreases the eyes
to acres ratio needed to manage pests, and permits
monocultures and cultivation of soil poorer nutrient
and organic matter. With producers allowed to extern-

E XPRESSING VALUES IN AGRICULTURAL MARKETS

alize so many costs, it is not surprising that the IA

system has emerged victorious from market competition. It is time to rethink the meaning of efficiency and
profitability.

Entry barriers for SA products

Many consumers wish to purchase food that reflects
a more sustainable and equitable food system, but
it is difficult for them to articulate their preferences
in the marketplace. The Hartman Group states that
many consumers would be willing to buy more organic
produce if it was available in stores they currently
patronize. Products from industrialized organic farms
are increasingly found in mainstream grocery stores
(Dimitri and Greene, 2000). But producers of local
sustainable food products lack access into the mainstream food distribution channels; often the scale and
seasonality of farms (like those here in the Northeast)
precludes their ability to provide ample, year round
quantities to supply large wholesalers or retailers.
(Many growers I have personally interviewed mention
this as a problem they encounter.) Furthermore, the
system is currently arranged for the transport of foods
imported from other regions (especially California) to
the Northeast, creating a food chain fixity obstacle
for small northeast farms. Calvin et al. (2001) discuss
the burdens that required services and fees increasingly place on small shippers, producers, etc. Large
industrialized organic farms will be able to compete,
but smaller sustainable farms (that reflect the broader
issues of sustainability like local control and participation) are often squeezed out of the mainstream market
(see Dimitri and Richman, 2000). This implies that
even though both supply and demand for such products
exist, a lack of coordination and opportunity prevents
consumers from voting with their dollars, and translating their preference for a sustainable food system
into purchases that support this type of system.

Current policy environment

In addition to the avoidance of external costs, IA reaps
further advantage from a wide array of policies. Dahlberg discusses how the industrialization of agriculture,
in which pesticide use has played a great part, is
based on functional specialization and the production
paradigm, a reductionist approach that tends to ignore
harmful side effects and encourage the externalization
of costs wherever possible. Economic productivity has
become the sole evaluative criterion of agricultural
production; other considerations, such as environmental stewardship, community wellbeing, and public

31

health enter the equation as an afterthought if at all.

The result, Dahlberg (1993) states, is to encourage
the use of pesticides in agriculture and forestry in
the name of economic growth. This pattern reflects
the predominant power in most states of corporate
and special interests which encourage pesticide use
(p. 286). Control, price support, and income support
policies have also encouraged industrialization and
greater pesticide use (Dahlberg, 1993; Jennings, 1991;
Osteen, 1993). The increased funding of research at
Land Grant Universities by chemical firms has led to
an increase in emphasis on applied science such as
biotechnology at the expense of basic science like ecology and taxonomy, creating conflicts of interest for
these institutions (Dahlberg, 1993). Only 0.02%, or
151 acres of the 885,863 available research acres in
the land grant system, is devoted to certified organic
research (Sooby, 2001). The land grant systems institutionalized focus on chemical inputs and genetically
modified organisms has marginalized, if not outright
excluded, many other areas of inquiry, most specifically organic production, said OFRFs Executive
Director Bob Scowcroft (Sooby, 2001). To be fair,
USDA has increased funding to and emphasis upon
organic and sustainable agriculture in recent years, but
these efforts still pale in magnitude to commodity payments and in influence with decades of support for the
IA paradigm.
The de facto measure currently in place is the use
of information to differentiate products that positively
contribute to these issues. It is left to the consumer
to voluntarily support firms that minimize negative
externalities, maximize the provision of public goods,
or otherwise reflect her concerns or values. Van der
Hamsvoort and Lusjt (1995) state that the ideal farm
product would be profitable, be demanded by consumers, and have no external costs, and propose the
sale of landscape amenities as fitting that description.
Marketing schemes such as U-pick, farm stands, and
community supported agriculture (subscription farms)
are examples of ways in which farmers provide a
rural experience and connection with the farm in the
package along with the food, helping to create what
Lyson calls Civic Agriculture.
Certainly, the organic label is the most recognizable voluntary labeling example. But is it truly a proxy
for SA? The information on the label is restricted to
how the food was produced, and at best is a proxy for
the on farm environmental impacts of production. It
provides no information on how the producer treats
his or her labor force, how many miles the food has
traveled, how the farm contributes to the community
and local economy, etc. In short, it addresses only
part of one leg of the SA stool, while leaving
the other two untouched. It does nothing to address

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DAVID S. C ONNER

the corporatization and consolidation of the food

system (concerns mentioned by surveyed organic consumers). One can easily envision a farm that is organic
but not sustainable, and vice versa. To give extreme
cases, a mono-cropped farm that substitutes organic
for chemical inputs and trucks its produce across the
continent would meet few criteria for sustainability.
A dairy farm that relies on rotational grazing and
serves local markets but treats sick cows with antibiotics cannot sell the milk as organic but would be
widely considered sustainable. The organic label may
be the best signal for SA available, but consumers
need more information and incentive to direct their
purchases toward sustainability.

Proposed policy environment

Even if the organic label was a perfect proxy for
SA, voluntary labeling is not sufficient to address
the market failures, entry barriers, and biases of
current policy mentioned above: some regulation is
needed as well. Humans are often thought to be
bounded rational (Teisl and Roe): we face cognitive and time as well as budget constraints in our
decisions. Caswell and Padberg note that grocery
shopping logistics limit the potential for significant use
of label information in making purchase decisions,
pertaining to health (p. 462). The use of labels and purchasing decisions to shape social and environmental
outcomes is likely to be even more limited, since
health decisions have a direct impact on the consumer
whereas social/ecological decisions are less direct in
impact and subject to public good/free rider issues.
Regulation has its own set of benefits and costs: they
can prevent bad outcomes with more certainty than
voluntary labeling and can induce innovation; however, they may be costly (both to implement and
enforce), limit freedom of action, etc.
Hadden (1986) posits five criteria in judging which
type of intervention (information versus regulation)
is best, depending on the risks involved. When the
risk and benefits are borne by the same person (e.g.,
medicine), information is called for; when different
people bear it (e.g., pollution), regulation is needed.
When the risks and benefits are of the same nature
(medicine poses both health risks and benefits), labels
are best; when theyre different (the cost of sickness
and death vs. money profits), regulation is called for.
Risks that are short term, reversible, controllable by
the consumer, and have a clear causal connection to
the product are best managed by information. Risks
that are long-term, irreversible, difficult to control, and
have a complex causal relationship should be managed
by regulation.

What are the risks involved with industrial agriculture and pesticide use? Certainly, they include ecological risks such as soil erosion, aquifer depletion, loss
of biodiversity, and global warming and sociological
risks like the breakdown of rural communities. Health
risks include pesticide residues on food and in water,
mad cow disease, etc. While it can be argued that
both consumers and producers benefit (higher profits,
lower food costs), the benefits are very different, and
the hazards are long-term, irreversible, difficult to control, and have a complex causal relationship. By these
criteria, regulation is needed.
The proposed policy environment is centered upon
providing greater information to consumers, along
with measures that will overcome the obstacles discussed above. It can be considered a utopian or
idealized proposal, as many of its measures would
be politically difficult to implement and/or violate
regulations of the World Trade Organization.
Voluntary labeling schemes can provide signals to
concerned consumers that some of the externalized
costs of IA are being addressed. For example, when a
consumer buys organic, they are also indirectly buying
cleaner groundwater, biodiversity habitat, improved
soil structure, etc. Similarly, buying locally grown
food supports cleaner air and an improved local economy.
The organic label is an important ingredient for a
more sustainable food and agriculture system, but it
is not enough. Steps must be taken to improve the
organic labels ability to contribute to a SA system,
but other measures are needed as well. First, education is needed to inform consumers about the benefits
of organic/sustainable and drawbacks of conventional.
Adult education theorists like Knowles (1978) state
that adults learn best when the information is perceived
as pertinent to their lives. Public campaigns should
draw the links between food choice and health, community, environment, etc., emphasizing their relevance
to citizens perceived problems. Many people, even
consumers of organic food, do not even know what
organic means (Conner and Christy, 2002). Competitive markets only function with informed agents, so
government must intervene to educate consumers and
provide institutional support. Nutrition education and
home economics extension efforts should include lessons on the links between purchase choices and the
issues above. Generic advertising of organics, perhaps
funded by USDA certification fees, would boost public
awareness and confidence in the organic label. Such
efforts have proven to be effective for many commodities like beef, milk, etc. Growers, processors, other
agents in the sustainable supply chain and other members of the SA movement must do a better job of
communicating with consumers. Greater cooperation

E XPRESSING VALUES IN AGRICULTURAL MARKETS

and pooling of resources would help with this task.

More articles about SA should be written for wider
audience publications rather than preaching to the
choir in journals such as this one.
Other voluntary labeling categories, such as contribution to community and local economy, should be
enacted. Exact definitions of qualifications (e.g., fair
treatment and wages to workers, multiplier effects of
inputs and outputs, local ownership and control, etc.)
and means of certification need to be designed.
Unfortunately, even with perfect information about
where and how things are produced, many consumers
will choose only by the criteria of low price, maximum
convenience, brands they see advertised, etc., not by
how their purchases impact their world. Many of these
factors can be addressed by removing the obstacles SA
faces.
Economics literature contains many proposed
means of addressing market failures. One common
measure designed to bring about the optimal level of
use in the presence of externalities is the Pigouvian
tax, which equals the difference between the marginal
utility and marginal cost at the socially optimum level.
Input use or output can be subject to a quota. Some
substances or practices have been banned outright
(e.g., DDT). Other traditional approaches discussed in
the literature include design standards (direct command and control regulation of the process), performance standards (e.g., maximum allowable effluent),
and fungible permits to discharge a given level of
pollutant (Shortle and Dunn, 1991).
Given their detriment to the environment and possibly human health, pesticides and chemical fertilizers
ought to be taxed. If possible, these taxes should
equal their marginal social cost (i.e., a Pigouvian tax).
Policies outlined above that encourage pesticide use
and bad stewardship ought to be amended or eliminated. In particular, commodity programs, intended to
keep families on farms but having quite the opposite
effect, ought to be rethought. Direct green payments
(payments to growers to compensate for and encourage
them to implement improved environmental practices
on the farm), decoupled from production to prevent
market distortion, ought to be implemented to compensate farmers for public goods they provide. Furthermore, public funding for research in SA production
and marketing at Land Grant Universities should be
increased, moderating the influence of corporate forces
on the public research agenda.
Market failures arising from food miles (i.e., the
external costs of fossil fuel use in transport) need to be
addressed as well. Food items should be labeled as to
the place of origin of each ingredient, plus a measure
of the aggregate food miles they have traveled, accompanied by an education campaign on the effects of

33

buying food from far away locations. A more extreme

solution is a tax/subsidy scheme at the retail level,
where foods grown in far away places are taxed as
a function of distance traveled, and the revenue used
to subsidize local foods. (This can be done with
non-foods as well.) This would also help to free up
resources in the developing south, in which the best
land and resources are used to grow export crops for
the wealthy world while their own populations go hungry. Most of the worlds hungriest nations export vast
quantities of food. A shift in demand away from those
luxury crops in the US would be a disincentive for this
inequitable land use (Moore-Lappe et al., 1998).
Market access for local sustainable/organic food
products must be ensured. In recognition of the
social, economic, and environmental spillover benefits, preferential access for these producers should be
mandated. Public research institutions such as Land
Grant Universities must place a priority upon ensuring
market access to these growers; potential solutions
such as the establishment of growers cooperatives
should be researched, developed, and tested.

Conclusions
The history of US agriculture has largely been one
of industrialization, a process under which farms are
encouraged to externalize as many costs as they can
onto the public at large, with profits and a narrow definition of efficiency the guiding principles. Yet despite
its successes, so much has been lost and sacrificed to
this paradigm: the social, environmental, and health
costs, both here and abroad, have been staggering.
What sorts of benefits would likely arise from a
greater role for SA? In addition to healthier communities and environment, and greater confidence in
our ability to continue to feed ourselves into the future,
this transition would also decrease what Kneen (1993)
calls the distancing of people from their food. People
would have a greater connection to the way their food
comes to them, and be more aware of and less tolerant of all the unwanted side effects of IA. Finally, it
may even begin the movement to a more sustainable
society in general, where materialism and heedlessness are replaced by community-based values and
responsibility.
Many things in life are intrinsically worthwhile
without being profitable or efficient. Just because the
market determines some outcome does not mean we
have to live with it. As Shafer (1969) reminds us,
the outcomes of market economies are determined by
a large number of institutions and arrangements that
evolve without consideration of their broader effects
on the system as a whole. A local sustainable food

34

DAVID S. C ONNER

system whose primary purpose is to provide ourselves

with healthy food, today and in the long run, may not
meet the narrow criteria our current paradigm extols;
yet even the most casual glance at the way we feed
and take care of our land ourselves is enough to show
how badly the current system is doing. The greatest
potential costs of SA higher food costs and decreased
yields can be addressed by income transfers to the
poor (until wages adjust upward without the illusion
of cheap fossil fuels) and increased research into SA
production.
The organic label is a good first step, but much
remains to be done. An integrated approach, based on
values such as health, community, and stewardship,
is needed. The USDA, Land Grant institutions, local
public, and private sectors all have roles to play. The
other option is a race to see if technology can save us
from all the ills it has created. Do we want to rely on
the fox to save us chickens?

Note
1. A discussion on the merits of the underlying economic
assumptions of utilitarianism and the exogeneity of preferences is beyond the scope of this paper. My arguments are
within the context of the current paradigm of economic
thought.

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Address for correspondence: David S. Conner, Department of
Applied Economics and Management, Cornell University, 206
Warren Hall, Ithaca, NY 14853, USA
Phone: +1-607-255-5464; Fax: +1-607-255-9984;
E-mail: dsc17@cornell.edu