Agriculture, Natural Resources and Environmental Accounting

In this paper, we develop atheoretically consistent framework to incorporate theenvironmental effects of agricultural production andthe depletion of natural capital caused byagricultural production into the existing incomeaccounts. We apply the framework and adjust theincome attributed to the agricultural sector andeconomy-wide net national product (NNP) for the UnitedStates. Estimated adjustments to the incomeattributed to agriculture are in the range of $4billion and have declined as a percentage of net farmincome since 1982.