Market Failure:

Market failure is “the inability of markets to reflect the full social costs or benefits of a good, service, or state of the world" (A Breif). Market failure occurs in the purchase of many agricultural goods because the prices do not fully reflect the costs or benefits, of a good, on the economy. Many stores are attempting to correct market failure. Whole Foods is one example of a store working towards reflecting the environmental costs of agricultural goods (Whole Foods). Many of the products at Whole foods are labeled with environmental information such as pesticide free, locally grown, or organic farming. Whole Foods also labels products as rainforest safe or dolphin safe; these labels allow the consumer to understand the entire cost of the product on the environment and reduce market failure. Further, more and more consumers look for these sustainable practices (for more information concerning increased demand for sustainable products see “Supply and Demand” post).

To learn more about what markets such as Whole Foods is doing to prevent market failure visit:  http://www.wholefoodsmarket.com/mission-values/whole-trade-program/certifier-partners 

Sources:

"A Brief Introduction to Environmental Economics." (n.d.): n. pag. Web.

"Kitchen Kismet." Whole Foods Market. N.p., n.d. Web. 16 Dec. 2012.
Picture Sources:
"Kitchen Kismet." Whole Foods Market. N.p., n.d. Web. 16 Dec. 2012.