What are the likely effects from enforcing tighter environme

What are the likely effects from enforcing tighter environmental policies on the agriculture industry?  

What benefits and drawbacks will this mean for the industry?

Will it cause costs to rise?

Reduce or increase demand?

Solution

Agricultural industry is likely to be negatively affected by the environmental policies. Safe environmental policies call for ban of chemical fertislizers that are harmful to environment.

Such policies would reduce the aggregate output of agricultural sector. there would be indeed rise in the quality production but overall output would witness fall.

Overall output fall but price for such good would invariably increase, thus profits of firms would also move up.

when more stringent rules are imposed, firms associated with agriculture would be made to use environmentally friendly practices, these methods of productions are relatively costly. thus, cost will spiral.

Demand may fall significantly due to rise in cost and prices of output.