Ethics and the Environment (

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Question 1

The farmers need to pay for the environmental cost. The cow effluents and fertilizer washed to the rivers and lakes have more social harm than benefit of individual farmer. The farmers factored in only private cost but failed to include externalities which form part of social cost (Kamieniecki & Kraft, 2007). The externalities include diseases, lack of clean water and decrease in income from tourist. Therefore, farmers need to understand that farming is a business and they need to uphold legal and ethical standards in their practices.

Question 2

The fact that towns and cities pollute the water ways does not give farmers a right to pollute too. Also, government factors the social cost to businesses realising high amount of waste. For example, the carbon credits regulation reduces the impact of pollution. They also pay tax which in turn used to rectify the situation while farmers are exempted i.e. capital gains of selling biological assets.

Question 3

The farmers have privileges legally to do anything with their farms but unethical (Kamieniecki & Kraft, 2007). According to ethical/legal matrix, it is recommended for businesses to make decision by ensuring that they are legal and ethical. The farmers are more concerned with economic and legal objectives of the business than ethical and philanthropic objectives according to pyramid of corporate social responsibility by Pride and Terrel. Thus, government needs to sensitize farmers on importance of conserving environment.

Question 4

The Fonterra was justified in refusing to buy from farmers who failed to implement conservation guideline. The decision was not inclined to legal perspective but ethical since they are beneficiaries of dairy farming. The company have dominance in the milk market thus direct contact and reliance by farmers giving them an ideal position to influence their decisions.


Kamieniecki , S. & Kraft, E. M., 2007. Business and Environmental Policy. MIT Press, Cambridge.