Smart Stuff From the Comments

From a reader named Paul Kilmartin, in response to Steve Sexton’s post “The Inefficiency of Local Food”:

Well, if we’re going to think like economists, then lets talk about how we got here. The food distribution network cannot thrive as it does now without the massive public works program called the Interstate Highway system, which subsidizes distant food movement. Large, “efficient” agribusiness is as much a result of farm subsidies leading to consolidation, and the percentage of crop land dedicated to corn is a function of ethanol policy. Furthermore, FDA policies prohibit or discourage the farming and production of items people want, such as hemp and unpasteurized milk.

On top of that, misinformation of the USDA has driven the public to choose grains over protein and fat, driving the obesity, diabetes, and heart disease rates higher, which shifts resources to those with government-granted monopoly rights to market pharmaceuticals to treat those diseases.

So, in the absence of all these price distortions, would local food be at such a disadvantage? I contend not. So those liberals who want more local food should dismantle the nanny state and public works programs that made pseudo food so much more profitable.

Who cares to argue with Paul?

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  1. Barrett says:

    Paul has a point that policies can distort prices, which is exactly what I thought Mr Sexton was talking about. However, some of his examples do not hold up to scrutiny.

    Yes, highway public works subsidize food transport. That is also true of the roads that suburbanites use to get to farmer’s markets. Our own farmer’s markets often tend to be in public spaces (parks, fair grounds, etc.) , so we should decry that subsidization as well. Sounds like a wash to me.

    Farm subsidies play a role encouraging production of some crops over others. No argument there. Corn ethanol subsidies have vastly changed the economics of corn farming: More corn now goes to ethanol than to either livestock or human consumption. However, corn going to ethanol is not (by definition) used for food, so is irrelevant to the discussion. I agree with Paul that subsidizing something that _should_ go to food so that it instead becomes fuel seems wrong in any number of ways, but it does not relate to the local food discussion.

    I would hope that even local food would not be allowed to violate public health laws — even though some legislators see things differently. FDA does indeed keep people from buying things they want, and for good reason. Taxes keep people from buying cigarettes, too, so I guess we should protest those. Food-borne disease events of the recent past (e.g., cantaloupes and Listeria, eggs and Salmonella) came about in large part because of inadequate monitoring, not by over-regulation. Raw milk, time and time again, has been shown to be very difficult to produce and market without increasing risk of disease in consumers. A quick search on Google Scholar will turn up about four times as many reports on raw milk disease outbreaks as it does for pasteurized milk outbreaks, even though raw milk comprises a miniscule proportion of the total milk consumed in the USA. I have worked with dairy farmers across the USA, and the large majority of them do not like the marketing of raw milk because every news story about someone getting sick from it paints _all_ milk with consumer uncertainty, and so, risks their livelihoods.

    I do not know what misinformation USDA has put out favoring grains over protein and fat, unless we are talking about the push to keep fiber in our diets — and that is awfully hard to argue against. Actually, USDA is most often accused of pushing proteins and fats, not the other way around. By the way, neither view is supported by fact.

    So, the price distortions in our markets cut both ways. What people want is not always good for them or their families. Information is used and abused all the time, but that does not mean we’d be better off with no information. Local foods have pros and cons. So does large scale intensive agriculture. We shouldn’t throw out either one, but instead, should take advantage of the good each brings, and try to mitigate the damage each causes. And that, I think, was actually Mr Sexton’s primary message.

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    • Kent says:

      “Taxes keep people from buying cigarettes, too”

      Taxes use addicted individuals to fund state programs. That’s all they do. The less price distortions, the better.

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      • Graham Peterson says:

        Indeed upwards of 80% of cigarette taxes go toward making up budget shortfalls, so there is no support for a “tax cigarettes to pay for public lung-cancer treatment” argument. Sin taxes are politically popular taxes on price-inelastic goods. As much guarantees that they will go on, but does not make them right.

        There is no reason public interest groups cannot persuade the public to not smoke and drink unpasteurized milk without using a cumbersome government to do the bidding.

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  2. Bill Harshaw says:

    Funny, I thought there was a prayer somewhere asking some entity to “give us our daily bread”. Maybe the misinformation about grains start with the Bible?

    I’d also point out the PC industry has consolidated radically over the last 35 years, just under the influence of market forces with no interference by the government at all. That’s what happens when your products are commodities, as are agriculture’s.

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  3. aepxc says:

    There is a bigger underlying principle here. Large-scale programmes, centrally designed and administrated, are going to have unforeseen consequences. It does not matter if these programmes are from the state or from a big corporation – if the complexity of the solution far exceeds any single human being’s capacity to holistically evaluate it, then it is going to interact with the world in some unforeseen ways, and if the solution is itself far reaching, so will be those unforeseen interactions.

    So, if we privatise all highways, kill farming subsidies, and abolish the FDA and USDA, will local food become more price competitive? The answer is “who knows”? Not only do we have no way of analytically reasoning all of the knock on effects that those decisions will have, both immediately and over the next decades (which is ultimately what Paul is currently complaining against – unintended knock-on effects decades down the line), but Big Agriculture and Big Food (through the likes of Wal-Mart, Kraft, and McDonald’s) are themselves too complex to accurately predict their precise responses, and the knock-on effects of those.

    At the macro level we can talk broad trends and general relationships, but not what Paul wants to argue.

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  4. BikerDad says:

    Yayyyy local food!! Let’s watch the 2.2 million people in Las Vegas starve to death.

    Yayyyy local food!!! Let’s watch the 4.2 million people in the Valley of the Sun (Phoenix) starve to death. (Okay, only about 3.75 million would starve).

    The simple limitations of geography and climate make “local food” utterly impractical for tens of millions of people. Changing the regulatory/subsidy environment with regards to agriculture will have zero impact on that fact. Monkeying with the transportation system might. Gee, what would be the economic impact of turning Las Vegas and Phoenix into ghost towns because food costs go out the roof?

    Let’s assume, just for sake of argument, that the average value of all the physical assets in the Phoenix MSA is 150k per household, @1.2 million households (2000 Census rounded up for growth). That’s home values + factory values + road values + apartments + office buildings + hospitals + schools + fires stations + etc + etc, i.e. the entire kit and caboodle.

    That’s 180 BILLION dollars. Most of which consists of fixed assets. (actual value is likely much higher).

    Yeah, let’s throw all that way in pursuit of the Chimera of Locavora.

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  5. Danny says:

    it seems a bit irrelevant to talk about the interstate highway system as a subsidy to agribusiness because even if we only had local food, we’re still going to subsidize the highway system. people want to get places even if it’s just for leisure.

    i think Sexton’s main points revolve around specialization and economies of scale.

    what most reasonable folks want is to see farm subsidies stop, so that we can see the free market play it’s role regarding the competition between large agribusiness’s economies of scale (w/o subsidies help) versus locally grown food. i think most people agree that in the grand scheme of world food supply, population growth outpaces local food production BY A LOT. so in our future we’ll have both. what would be great is we saw a natural experiment somewhere about what happens when they stop farm subsidies.

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  6. Jer says:

    Doubt the grains statement? Hang out on Mark’s Daily Apple for a while to hear plenty of amazing success stories, or read Robb Wolf’s Paleo Solution for the biochemical explanation.

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  7. Dr.Nick says:

    How have Italians and countless Asian countries managed to survive centuries on their high grain diets without obesity epidemics? In fact, the national dish of Okinawa, the longest lived of the longest lived people in the world, is some sort of fatty pork thing on rice. Hardly healthy appearing.

    I think it’s more related to HOW much you eat rather than what. One of the things abot the Atkins/low carb diets is that people end up calorie restricted anyway.

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  8. Maggie says:

    I can’t always tell what “info” (or exhortation) comes directly from the USDA. But the campaign for every school child to drink three eight-ounce glasses of milk each day came from a national dairy association in the 1950s, when I was in elementary school. Later it expanded to a campaign for adults to do the same, even though the vast majority of adult humans in the world are lactose intolerant. (American ‘whites’ seem to have the lowest incidence of lactose issues, however).

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