The linkage between agriculture and the environment is important, not least because agriculture is a major user of the world’s land and water resources. Agriculture can exert a positive effect on the environment by providing habitat for wild plants and animals, through water management, by helping to prevent floods and other natural hazards, and as a sink for atmospheric carbon. Conversely, agriculture may increase soil loss, and the use of agri-chemicals or production of animal waste may impair water quality.

The linkage between international agricultural trade and the environment is complex. Trade may promote changes in agricultural practices that enhance or reduce environmental quality in individual countries. There is also the issue of whether trade may undermine or help foster domestic policies aimed at improving environmental quality.