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?


James

"...misinformation of the USDA has driven the public to choose grains over protein and fat, driving the obesity, diabetes, and heart disease rates higher..."

I'd certainly like to see some hard evidence on three points:

1) That grains instead of protein/fat do in fact increase obesity, etc. It's certainly not hard to find populations with a largely grain-based diet and little obesity.

2) That Americans have in fact made this choice. Certainly some have, but my casual observation (e.g. compare say WalMart shoppers to those at Whole Foods), at least, suggests this population is less obese than average.

3) That information, mis or not, from the USDA is a major factor in anyone's dietary choices.

Scott

I second this motion. Please elaborate on the connection between grains and obesity, diabetes, and heart disease.

Jesse

The term argue is right on. I would love to debate this but when someone says "those liberals" and "nanny state" they can't be debated with--only argued with.

Chris

@Jesse I agree that those terms come off as pejorative but why not be the bigger person and back up your position rather than returning with an ad-hominem attack?

Greg

@Chris: The terms do not "come off" as pejorative. They are pejorative phrasings chosen intentionally by you. Language signals, and pejoratives like "nanny state" signal closed-mindedness. So I suggest you stop blaming others when people choose not to engage you.

Can you elaborate on "government-granted monopoly rights to market pharmaceuticals"?

Enter your name...

Funny, I thought the percentage of cropland dedicated to corn was a function of meat consumption. Most of that corn is fed to animals, not humans. That's why there are six pigs for every human living in Iowa, and why there are almost 250 acres of field corn (or "dent corn") for every acre of sweet corn (the kind used for corn on the cob, canned corn, and frozen corn).

I can read

"and the percentage of crop land dedicated to corn is a function of ethanol policy."

And you in return argue that it has to do with meat consumption. You argue most of that is corn not meant for human consumption Corn ethanol is made from that same type of corn with the US producing over 13 BILLION gallons of corn ethanol in 2010, I'd say its a far share. Combine that with the corn and agricultural subsidies in conjunction with the taxes on sugar (why the US is the only countryt hat uses HFCS in everything) and you have an even larger portion. In short, you argument doesn;t make much sense. It doesn't contradict anything that the OP mentioned.

cbp

@I can read
Putting the word 'billion' in capital letters doesn't help give it the context that it requires.

iljitsch

There is so much to argue about. First of all, people have been eating bread and pasta etc for centuries while obesity and type 2 diabetes have been on the rise only in recent decades. Even sugary softdrinks have been available throughout the 1900s. Of course the advantages of being able to move from one place to another or get medicine that probably won't kill you are negligible and people will be happy to trade those against the ability to smoke pot and drink unsafe milk.

About local food: in the Netherlands tomatoes and bell peppers are grown in artificially lit and artificially heated greenhouses while they grow for free (at least light and heat wise) in southern Europe and northern Africa. That is not the kind of local food we need. On the other hand, ferrying live pigs from Holland to Italy, slaughter them, and then transport the meat back just so it can now be called "Parmesan ham" is not a great practice, either. Seems to be that abandoning subsidies for farmers, especially on natural gas and electricity, would be a good thing, along with getting rid of any geographical requirements related to food marketing. I.e., Gouda cheese should taste like Gouda and not necessarily come from the city of Gouda.

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Dave Hodgkinson

The wheat we eat now is not recognisably the wheat from 50 years ago.

Clancy

I whole-heartedly agree, right up to the last sentence where he blames nanny-state-liberals for the problems. Most liberals I know would love to do away with agricultural subsidies and ethanol subsidies. They’d also be in favor of legalized hemp farming and for getting the USDA out of the pocket of Big Grain and curtailing pharmaceutical monopolies. No-one but the most out-there space-cadet Randian Objectivists want to abolish the Interstate Highway System, but many liberals favor higher fuel taxes to pay for it (taking less out of general revenues), thus lessening the implicit subsidy to trucking and “leveling the playing field”
It isn’t really a question of conservative v. liberal, it’s a question of public interest v. corporate interest.

David

Yes, the Talk Radio language is a major turnoff. The authors should be elevating the conversation.

Alex

Who exactly wants unpasteurized milk? I'm pretty happy without food poisoning.

Cor Aquilonis

Me. You do realize the milk doesn't come poisoned directly out of the cow, right? If you get it fresh and use it fast from clean sources, food poisoning isn't a big deal. Just like any other food.

James

Yes, grew up on it, as did most of the people in the dairy farming area where I lived. A regular evening chore was to walk over to the neighbors' farm with a gallon milk can.

Mike B

Why do we want to go back to even the 1950's where food cost 20% of household income instead of 9%? What would you prefer, Obesity or Hunger? You also are making the assumption that people eat too much solely because the food is cheap. People eat junk food because it TASTES GOOD. Higher prices would only provide a barrier to people getting their next hit of salt on fat on sugar, not make them suddenly switch to healthy "local" food. Yes, higher prices would reduce consumption...but I don't think it would change the consumption patterns.

Even today with all those "subsidies" one can save a lot of money buying healthy food and preparing it oneself. Vegetables (fresh or frozen), chicken, beans and pasta are the basic elements of a healthy diet and buying such is cost competitive with the per-packaged fried salt on fat on sugar foods, but most people don't want to prep and consume healthy meals because salt on fat on sugar provides more pleasure in our brains. Hell water is nearly free compared with soda yet people continue to guzzle down the soda because they like it...not because it is "cheap".

The local food movement is nothing but the ramblings of the uninformed ecofringe that think that just because something is industrial means it is bad. They made the same arguments back in the early 1900s when A&P was busy putting local general stores out of businesses with their self service supermarkets. Well that not only saved consumers a lot of money (food cost a whopping 1/3 of household income in that time period), but also a lot of time and effort as the old stores gave consumers very little choice and one would often spend all day putting together their basket of goods. Industrial farming provides more choice at a far lower cost. Without it we would currently be seeing the soup lines and bread riots that accompanied the great depression instead of the Occupy Wall Street movement. Instead food is so cheap that few if any people will actually be at risk of starvation in our country despite the crushing unemployment. That's a win for progress.

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James

"People eat junk food because it TASTES GOOD."

Except that it doesn't. I think you're confusing "like" with "have been persuaded by advertising". Do you think the Coca-Cola company - to pick one example - would be spending roughly $2.5 billion a year on advertising if people actually liked its products?

Mike B

Humans are hard wired to seek out fat, salt and sugar. You don't need advertising to get them to like this type of food, just choose it in preference to other like products. Coke isn't competing with water or milk, it is competing with Pepsi.

Wayne

I'm not an economist by trade but it seems as if he's making a sunk cost argument. It might be that local food would be more economical if we didn't have the highways, but we already bought the highways.

That sort of factor also swings both ways. Food distibutors may have the benefit of the highways now, but if we didn't have the highways then the local sellers would also not have them to gather more effficient and cost effective inputs such as fuel, feed, seed, and stock.

Kent

The highways need repair and maintenance, so they are never really "bought".

Eric M. Jones.

"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."

That's not why that famous Democrat Liberal Eisenhower pushed through the interstate highway system.

Besides, a lot of food moves by rail.

Dube--Did you lose a bet? WTF?

Alex

More seriously, I think the main complaint here is that a number of factors combine to give 'big food' a price advantage over local food, right? Local food either can't or won't produce products on a scale where they can take advantage of subsidies, USDA nutrition suggestions, etc. But if these conditions didn't exist, local food would still have issues compared to big food if sold at the same price. For example, people in colder climates could say goodbye to fruit. And, if the article on wikipedia is accurate, people in the Eastern US could say goodbye to (cow) milk, unpasteurized or not. Big food benefits not only from scale but also from offering greater options.

Cor Aquilonis

I have a couple quibbles with the article. First, I'm grew up in Indiana, a major corn and soy producing state, so a lot of this is from direct, personal observation.*

1) The interstate highway system is not such a big deal for bulk corn transport. Usually, corn harvest goes along local rural roads and state roads to a corn elevator. There it is dried/graded/whatever and then loaded on to dry bulk rail cars. Most bulk corn I've seen moved goes by rail. The bulk corn I've seen travel by truck were over state roads from nearby farms/elevators to nearby refineries.

2) Corn syrup refineries take in bulk corn by rail and also ship the syrup by rail. You can see for yourself by Google mapping "Tate and Lyle, Lafayette, IN." Notice the huge rail yards. (BTW, yes, there are two locations.) Tate and Lyle manufacture corn syrup. They do take delivery by truck, but again, primarily from nearby locations.

3) Regarding ethanol: the bulk grain is also delivered primarily by rail. Every ethanol plant I've seen has a rail spur for delivery and are usually near an existing elevator. Most ethanol production I've seen is not a heavy user of the interstate highway system, mostly rail and state roads.

4) Farm subsidies promote farm consolidation, but economics or farming is more powerful. Increasing the size of the operation has increased the efficiency, with less idle time for machinery and better use of labor, and more capital to secure financing. This is a big deal competition-wise.

I have more concerns, but I also have work to get back to. Just judging from the misunderstandings I perceive from the first paragraph, I don't have high hopes for the veracity of the rest of the post.

* I'm assured that since this is anecdotal, and is thus not at all useful for anyone else to use as a source of information or understanding. Nevertheless, I will press on.

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EP

I think his point about corn was more related to government policy driving its production. The highways are related to the long distance distribution of ready to eat food.

Christopher

First, is the poster seriously contending we should "dismantle" the interstate highway system? I don't think that notion is on the fast track to anywhere, anytime soon.
And thus the argument that local food is disadvantaged because "big" retailers use the "big" highway system is like me saying if only I was 7 feet tall, I could play in the NBA too. So therefore we ought to somehow cut those bigger athletes down to a reasonable size, however that should be done. Sorry, but wishes and buts aren't candies and nuts, even during Christmas.

EP

No, no he is not.

Becky

"This year, the US will harvest approximately 12.5 million bushels of corn. More than 42% will be used to feed livestock in the US, another 40% will be used to produce government mandated ethanol fuel, 2% will be used for food products, and 16% is exported to other countries."

http://www.ibtimes.com/articles/101494/20110116/here-is-how-the-ethanol-subsidy-scam-is-screwing-americans-and-corn-consumers-globally.htm

Main Points:
- Ethanol subsidize cost American taxpayers $6 billion per year
- Food is about 10% of Americans' disposable income, but 40% to 60% in developing nations. A large increase in the world-wide cost of corn increases food costs and poverty - the main cause of starvation.
- Increased food costs have caused riots and government destabilization in Tunisia and other countries
- The 107 million tons of grain that went to U.S. ethanol distilleries in 2009 was enough to feed 330 million people for one year at average world consumption levels
- The amount of grain needed to fill the tank of an SUV with ethanol just once can feed one person for an entire year
***** Producing ethanol uses MORE energy than is created - while driving costs higher*****
- E-85 ethanol is corrosive to the seals and fuel systems of most of our existing engines
- Ethanol has about 30 percent less energy per gallon than gasoline. That means the fuel economy of a vehicle running on E-85 will be about that much less than a comparable vehicle running on gasoline.
- Our current ethanol production represents only 3.5 percent of our gasoline consumption -- yet it consumes twenty percent of the entire U.S. corn crop, causing the price of corn to double in the last two years and raising the threat of hunger in the Third World.

That article doesn't even mention the huge quantities of water required for corn irrigation when or where there isn't enough rainfall.

About grains vs. meats - there's all kinds of proof that limiting carbs and allowing protein and fat results in healthier body weight, better blood lipids and better controlled appetite.

http://www.medicinenet.com/script/main/art.asp?articlekey=79396

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Graham Peterson

This is a point worth making again and again. Ethanol is a disaster, and a real testament to how much of agri-subsidies are designed solely to maintain rents of constituents and corresponding politicians.

That said, it's worth remembering that urbanization and scaled food production started trending long before federal subsidies were large enough to severely impact food prices. Even today, lamentable as subsidies are ethically, they cannot dominate prices in a food industry that's reasonably contestable.

Travis

While I agree with some of the assertions, for example, corn subsidies, ethanol production, and similar factors are poor both economically as well as environmentally, the argument conflates too many things.

For example, if "those liberals" were to "dismantle the nanny state public works programs" would that include merely dismantling farm subsidies, or dismantling the interstate highway system as well?

Pseudo food is a blight, no doubt. And the cycle of overproduction of corn to fuel CAFO's, create ethanol, and refine into corn suryp, is a huge threat. And the fact that the agribusiness crops are almost all farm subsidy crops is also a huge factor in making them "economically efficient."

Another factor would be that the USDA essentially is constantly allowing agribusiness to run the agency, when it comes to testing of new plants and animals, as well as restricting non-agribusiness methods of farming.

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abqhudson

No argument from me.

iljitsch

Wow, 40% of corn is used for fuel? That's insane. Photosynthesis is rather inefficient at about 3 to 6%. Even ignoring harvesting, non-corn parts of the plant, transport and converting to fuel, internal combustion engines run at 20% efficiency. So that's no more than about 1% energy efficiency total. With solar cells (6 - 20%) and electric motors (80%) you'd be able to reach 5% efficiency easily (again, ignoring transport and storage, but these are also 80% efficient for electricity). And you can put those solar cells in places where corn won't grow.

Barrett

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

"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.

Graham Peterson

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.

Bill Harshaw

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.

aepxc

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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Graham Peterson

A little bit of Hayek goes a long way. Applause.

BikerDad

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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