Crop straw is the most valuable resource in the agriculture, but people have never made the most of it with the economic development so that it still has a low yield to this day. There are phenomena that crop straw becomes waste or directly incinerates everywhere. Improper straw disposal will allow it to produce pungent odor and seriously endanger the humans and environment. This paper first describes the odor emitted by straw incineration and where it derives from on earth. Next, it is discussed what’s the hazard of such odor. This is also an exploration on the cause why the crop straw incineration will produce the pollution from economic perspective. Based on the negative externality of odor pollution produced when farmers incinerate crop straw, it is analyzed in the economic sense how to prevent against and abate the odor pollution.