Economist’s Angle: The Pillars of Agricultural Sustainability

Jan 07, 2021

By Scott Gerlt  • ASA Economist

Sustainability in agriculture is receiving increased focus. Phrases such as “climate smart agriculture” and “regenerative agriculture” relating to this idea have become new terms in the industry. While there is not a universal definition of sustainable agriculture, several are prominent, including the definition from the 1990 farm bill:

“An integrated system of plant and animal production practices having a site-specific application that will, over the long term, satisfy human food 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; and enhance the quality of life for farmers and society as a whole.”

Likewise, the United Nations defines sustainable development as, “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” The definition comes from the 1987 U.N. Bruntland Commission. The United Nations outlines 17 goals for sustainable development underpinned by the three pillars “economic, social and environmental.”

While it might be tempting to define sustainability as a practice that can be continued indefinitely, that definition is infeasible. The laws of physics prevent any action from continuing in perpetuity, so that sustainability by this definition is unobtainable. Instead, the 1990 farm bill and UN’s focus on weighing the needs of the present against those of the future provides a useful framework. In fact, the underlying issue of sustainability is the tradeoff between the present and the future.

For a practice to be sustainable, it must be capable of being continued for at least some length of time. While this includes the use of resources, it must be able to survive socially and economically as highlighted by those three UN pillars. For instance, a practice that is environmentally and economically sustainable may have adverse ethical consequences that would not be accepted by society. Therefore, it is socially unsustainable and would not be implemented. Likewise, a practice that is environmentally and politically (socially) sustainable may not be economically sustainable, forcing participants out of markets leading to the collapse of the practice. Last of all, a practice that is economically and socially, but not environmentally, sustainable is achievable but would not help future generations meet their needs. The importance of these areas, as well as U.S. agriculture’s role in them, bears discussion.


The primary means of obtaining intergenerational equity is through resources. U.S. farmers have been passing along viable farmland for generations. They also have been contributing to the conservation of natural resources through multiple methods. The first of these is through increasing efficiency. The Field to Market National Indicators report indicates inputs per bushel of soybeans fell by the following amounts from 1980 to 2015: land use (40%), irrigation water (32%), energy (35%). Furthermore, greenhouse gas emissions were reduced by 38% per bushel and soil loss was decreased by 32%. Several factors have contributed to these efficiency gains. Better seed genetics have increased yields per acre and increased drought tolerance. Likewise, herbicide tolerant soybeans have decreased the need for tillage. This has resulted in less soil disturbance through no-till and strip-till practices. It also reduces the number of equipment passes per acre, which reduces total fuel consumption. Additionally, precision agriculture has allowed inputs to be applied in a site-specific manner, which reduces input use while increasing yields. Last of all, plant-incorporated protectants have reduced the need for pesticide applications.

Additionally, agricultural production can help sequester carbon into the soil from the atmosphere. No-till and strip-till, made possible by herbicide tolerant seed genetics, allow for minimum soil disturbance, which increases carbon stored in the soil. Cover crops also help draw atmospheric carbon into the soil.

Last of all, biofuels from agriculture have been helping reduce greenhouse gases. EPA’s 2010 life cycle analysis of biofuels concluded that soy-based biodiesel reduces greenhouse gas emissions by 57% relative to diesel. This analysis doesn’t capture some of the more recent innovations in agriculture that could further improve that number.


Both the 1990 farm bill and the UN consider social aspects when outlining sustainability. The farm bill mentions satisfying human food needs and enhancing the quality of life for farmers and society. Many of the UN’s 17 goals are focused on social good, including no poverty, zero hunger, gender equality, reduced inequalities and peace, justice and strong institutions. Society must view sustainability as equitable and to have benefits that exceed the costs of embracing it.


Economic, although a distinct pillar, is also a subsection of the social pillar and intertwined with the environmental pillar, as well. Economics is the study of the allocation of scarce resources. Economics largely determines which resources are consumed and who consumes them. In the free market, prices are the rationing mechanism. Resource scarcity determines price.

The 1990 farm bill definition of sustainability includes, “sustain the economic viability of farm operations,” and the UN goals include “decent work and economic growth.” Yet, economic sustainability is more than profitability and is very closely related to environmental and social sustainability. Prices and subsequent profitability are the mechanisms of resource allocation. Take for example a well-intentioned policy that mandates increased carbon sequestration of agricultural lands. Many producers have already adopted conservation practices that still allow them to be competitive in the marketplace. In fact, a recent survey of ASA board members showed that 98% had adopted practices to reduce nutrient runoff or improve soil quality. Mandating additional carbon capture would increase the marginal cost of production. In a commodity market, the sector’s marginal cost of production is equal to the market price. Therefore, requiring a change in practices that increases costs would have multiple effects. First, costs would increase for U.S. producers. This would cause a retraction in the domestic crop production sector, as some acreage would no longer be profitable. This retraction would increase the scarcity of crops and subsequently food, which would be rationed by higher food prices. In effect, those with lower incomes would face increased food scarcity. The higher crop prices would encourage foreign production. While this would decrease crop prices, they would still remain above levels before the mandate was introduced. Furthermore, moving soybean production abroad would likely lead to increased deforestation in South America, which would release high levels of carbon from the soil. The policy would likely lead to worse social and environmental outcomes.

Conversely, a carbon market, whether public or private, would avoid many of these issues. Markets utilize the cheapest supplies available, which means that the costs of achieving the environmental benefits are minimized. Since the revenue from the carbon market would cover the cost of implementing the practices, the marginal cost of producing crops would be largely unchanged. This leads to little change in food prices and allows the production to remain domestic.

An example of how a domestic mandate can fail to have the desired sustainable effects in an international marketplace is the European Union Green Deal’s Farm to Fork and Biodiversity Strategies. The policy sets agricultural input reduction targets for 2030. USDA’s Economic Research Service evaluated the effects of the policy with economic models. If only the E.U. were to adopt the policy, their agricultural production would fall by 12%. Some of these decreases would be offset by moving production abroad. The number of food-insecure people in the world would increase by an additional 22 million in 2030, particularly in Africa. If the European Commission’s pledge to support global adoption is successful, the number of food-insecure people by 2030 would rise by 185 million above the baseline while world GDP would decrease by about $1.1 trillion.

The ERS evaluation of the Farm to Fork policy highlights the importance of considering all three pillars of agricultural sustainability. A focus solely on one of the pillars can lead to unsustainability in the others. A failure in any of the pillars will render the policy or activity from achieving its goals. Instead, sustainability can be achieved by realizing the multiple parts. This ensures environmental quality, social equity and economic survivability.