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In 2003 IISD embarked on a five-year research project with Agriculture and Agri-food Canada to study the issue of full-cost accounting and its application to policy development in agriculture. Full-cost accounting is the assessment, in dollar terms, of costs or benefits associated with changes in the environment.This report develops a conceptual framework using an impact pathways approach for valuing the changes in five agri-environmental indicators that are part of Agriculture and Agri-food Canada's NAHARP program.