ABSTRACT
Environmental regulation that affects agriculture can be separated usefully into two categories: direct—regulation of farm production practices, and indirect—regulation of nonfarm products or enterprises that affects the prices of farm inputs or outputs. Farm practices can cause many environmental problems: nitrates and phosphates from fertilizer or animal wastes; pesticide drift or leaching that claims victims beyond the targeted farm; soil erosion caused by wind or water that deposits damaging silts off the farm. The indirect regulations that receive the most attention are those concerning food safety and nutrition. Several processed food additives, such as coloring agents and preservatives, have been banned by the Food and Drug Administration. In the empirical economics of environmental regulation, more quantitative estimates have been published for prospective regulations than for regulations actually in place. Aggregate measures of total factor productivity are subject to many important pitfalls, both conceptual and practical, which include data limitations in particular.
