Costs and benefits associated with the externalities generated by Dutch agriculture

This paper provides an estimate of costs and benefits of the negative and, to a lesser extent, positive externalities associated with the Dutch agricultural sector. A cost-based approach, rather than a demand-based of full CBA approach has been followed. Implications of methodological assumptions are discussed and some efforts are made to empirically cross-validate cost estimates. Total benefits due to agricultural production, according to available data and research in the Netherlands, are calculated to be €5,533.0 million a year and the total costs are calculated to be €1,885.7 million. Using the available information, total net benefits of agriculture in the Netherlands are estimated to be €3,647.3 million per year for the period 2005 until 2012. The external costs are equivalent to €952 per ha of arable and pasture land and are high relative to estimates found for other countries.