Could It Be That U.S. Farm Policy Isn’t Making Us Fatter?

(Photo: lil moe72)

Leaders of the food reform movement insist on a wholesale remaking of U.S. agriculture, blaming government policy for industrial farming that supposedly adds food miles to our diets and inches to our waistlines. But their solution, a system of local “foodsheds,” wouldn’t save on greenhouse gas emissions and may well be worse for the environment, an argument advanced by economists here and elsewhere. Now it also seems that the federal farm program blamed for worsening obesity has actually kept us skinnier. 

That is the finding of agricultural economists Bradley Rickard, Abigail Okrent, and Julian Alston, who report (ungated) in Health Economics that “agricultural policies have discouraged food consumption and mitigated the effects of other factors that have encouraged obesity.” Their conclusion is surprising only in light of the fallacy propagated by Michael Pollan and other critics of modern farming that the political influence of the industry has saddled us with a broken food system we wouldn’t choose.

A surfeit of cheap, nutritionally bankrupt calories from corn and soy “is not simply the product of the free market,” Pollan asserted in a 2008 manifesto on the federal Farm Bill. “Cheap food is only cheap because of government handouts and regulatory indulgence.”

Indeed, the textbook subsidy lowers the prices consumers face, leading to increased consumption. But the impact of U.S. crop subsidies on food consumption is minimized by the generally small effect the subsidies have on crop prices, by the small share of crops in food product costs, and by the unresponsiveness of food consumption behavior to changes in relative prices.

Moreover, U.S. agricultural policy isn’t just comprised of policies that serve to lower crop prices. Trade barriers protect domestic farmers from foreign competitors by raising the price of commodities like sugar. These higher prices serve to reduce consumption.

To assess the net effect of agricultural policies on food consumption and obesity, the authors calibrated a detailed model linking ten agricultural commodity markets to retail food product markets in order to simulate counterfactual levels of consumption of food at home and food away from home in the absence of farm policies. They found that the net effect of eliminating U.S. agricultural policy is to increase per capita calorie consumption by 1,952-4,771 calories per year, leading to a 0.56-1.36 pound annual increase in body weight. Without the policies, the typical American would eat less grain and meat, but consume additional calorie-dense sugar and dairy products. 

In response to claims from the food movement, Rickard, Okrent and Alston also estimated the impact of removing only crop subsidies and leaving border policies in place, though they acknowledge that such reform is unlikely given the nature of trade agreements. They found that per capita food consumption would decline by 995-1,846 calories per year, lowering the average American’s weight by 0.28 to 0.53 pounds per year. The “tiny” effect of farm subsidies on American waistlines, then, could be offset with as little as two hours of running per year.

The authors also suggest that the impact of agricultural policy on consumption has declined over time, because the cost share of agricultural commodities in food products continues to fall amid growing demand for processed foods and food away from home.

“Contrary to common claims in the popular media, farm policies have more likely slowed the rise in obesity in the United States,” they conclude.

In other words, Americans have not been lured into unhealthy diets by agricultural policies designed to appease corporate titans. Instead, Americans have chosen their diets in a marketplace that is relatively unaffected if not unencumbered by crop subsidies.

As Congress prepares to reauthorize the quinquennial Farm Bill this year in the presence of a towering budget deficit, commodity supports are likely to undergo careful scrutiny, as well they should. But here’s hoping that deliberations on Capital Hill will be more informed by research from the academic community than by innuendo from a food movement built on yet another fallacy. 

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  1. Jane Ellen Jarrell says:

    A re-vamp of the farm bill is not needed for the waistlines of the American people, but to break up the monopolies that have taken over our food supply and to support some of the smaller, family farms. Does Con-Agra really need enough government subsidies that their tax burden is a net amount? How close to a socialized industry have they become?

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    • DanSanto says:

      Then the serious promoters of this style of agricultural policy overhaul, such as Pollan, need to put forward serious work to show that large agricultural corporations are a significant tax burden without sufficient benefit for the tax breaks.

      What purpose do the subsidies serve and what harms do they have? It looks like one of the main arguments put forward – that the subsidy structure in place encourages people to gain weight – turns out to be false.

      Pollan and others need to put forward some serious papers supporting whatever your position is. Then people can have some sort of serious discussion about what is actually happening. At the moment, there are far too many emotional cries about depredations by “Con-Agra” and far too few serious investigations of the reality of such depredations.

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  2. Paul says:

    Obesity is a disease of eating/drinking too much food. The real issue is the unsustainable nature of note practicing traditional farming techniques and instead relying on government subsidies to provide a consistent marketplace for crops that sap the soil and feed livestock instead of humans, why not just let the cows eat grass?

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    • Andrew says:

      I might be missing the subtle sarcasm Paul (play on let them eat cake, perhaps?), but letting cows eat grass is a far more inefficient than the feedlots that are used today.

      Feed lots enable farmers to raise 1000+ head of cattle on 10 to 500 acres; grass requires 5 to 40 acres per cow. Even producing the corn, hays, and other feeds necessary to feed these animals, its still a HUGE net gain in terms of land efficiency.

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      • James says:

        “Feed lots enable farmers to raise 1000+ head of cattle on 10 to 500 acres…”

        It may be physically possible to fit 1000+ cows on 10 acres, just as it is physically possible to cram several million humans into say Manhattan. The question is how much land is required to raise the food to feed those cattle, and how much energy goes into producing & transporting it to them.

        Just for instance, if you drive California 88 over the Sierra Nevada, on any given night you will likely meet several semis loaded with hay which is grown around Minden, Yerington, and Fallon in Nevada, baled, then hauled a couple of hundred miles to feedlots in California’s central valley. I’ve often wondered at the economics & energy efficiency of this: seems like a lot of investment (tractors, semis, irrigation systems, etc), diesel fuel, and human time goes into this. It’s hard to see how much profit is going to come out the other side.

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    • Dan says:

      Obesity is not a disease of eating/drinking too much food but rather a disease of eating/drinking too many food products. High fructose corn syrup does not grow on a farm and can be manufactured very cheaply thanks to subsidies. Who needs the more expensive imported real sugar? I think everyone here has missed the boat. Farm Bill reform and Healthcare reform are more closely tied than anyone cares to point out.

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      • Luteguy says:

        The obesity epidemic doesn’t seem to be related just to HFCS. It started with the USDA food pyramid recommending grains & cereals as the basis of the large part of our calories. However, as the paleo-diet promoters point out, the human body doesn’t seem to be well-suited to that kind of diet.

        Carbs cause blood-sugar spikes, which cause repeated insulin spikes, which in turn causes fat storage.

        In short, it was the old USDA food pyramid that started making us fatter.

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  3. jonathan says:

    To be clear, when the study speaks of eliminating agricultural policy, the calorie and weight gain comes from eliminating barriers to cheap sugar coming into the US. The post covers this but not clearly: if we eliminate US domestic policies but keep in place import restrictions, calories and weight decrease. One can argue about the amount and whether that’s important but this distinction is crucial because people like Pollan would never, ever argue for making it easier to bring in cheap sugar. It’s unfair to that political position to present an analysis which castigates them but which relies on something they would hate to make them look bad. The paper does castigate them – as does this post – without acknowledging people like Pollan are writers, not economists. Note also the paper’s last application is to 2002 data.

    I also want to make a general point about the way economics is presented. This post makes a political argument but disguises it with numbers. The described paper presents itself using words that don’t belong in scientific work. From the abstract: 1) “this paper carefully studies” – that’s a claim of carefulness not a statement of fact. It’s really “this paper studies”; 2) “using a detailed multimarket model” – again, it’s a “multimarket model” being sold as “detailed” to sound persuasive; 3) reference to “many commentators” without saying these are not economists; 4) actually says these commentators “often” don’t make “any analysis of the complex links” in the food economy when they really mean these commentators haven’t applied a mathematical model. Any fool can read Pollan’s books, for example, and see he does perform analysis of complex links; 5) there is no mention at all that “measures of support” for food means trade barriers as well as tax and production subsidies – that’s a huge distortion which makes the paper sound much different than it really is. This kind of slanting and distortion is a big reason why economics is more politics coupled to math than science. Read a physics journal. Or a biology journal.

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    • jonathan says:

      The more I think about this, the more it bothers me.

      The proper way to report this kind of material is to say, “We’ve found evidence that ending domestic subsidies reduces average calorie consumption. The effect was relatively small compared to reported average weight gains. If we eliminate trade barriers, average calorie consumption increases. Our last data set was from 2002.” Here’s the point: this is one model and yet it’s presented as the answer. It isn’t. Then it becomes “he said, she said” political posturing and a bunch of distortion – as with the WSJ using a ridiculous study that Rhode Island saved billions from a Medicaid change when that didn’t happen according to the state’s own people.

      I don’t have the time or inclination to take apart the model used but it’s just a regression model. It’s not the Standard Model for fundamental particles; it’s an invented thing that may or may not fit reality very well. There is NO acknowledgement of this. Maybe economists add in a dose of salt to everything they read by other economists but the general public doesn’t.

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      • Tanya Denckla Cobb says:

        Thank you for your excellent points, Jonathan. The red flag (for me) is the word “model.” As anyone familiar with models knows, the worth of a model is completely dependent on two things: the algorithms used, and the information put in. We all know the adage: garbage in, garbage out. Jonathan points out one potential weakness of the model; it would be helpful if a modeling expert could analyze their model and help the rest of us understand its strengths and weaknesses. I am particularly sensitive to people relying on models to make political points. The Chesapeake Bay model – which took many, many years of smart minds working together – was recently discovered to have fundamental flaws (showing a worsening of pollutant levels rather than improvement), leading to major disillusionment and conflict among stakeholders. We do need science and modeling, but we also need the application of common sense. Common sense says that reducing the runoff of pollutants will eventually contribute to improved waterways, even if the model says otherwise. Common sense also says that a greater abundance of cheap, nutrient-poor calories will eventually contribute to our current phenomenon: the malnourished obese.

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  4. Dr. Obvious says:

    The conclusions should not surprise anyone, even Pollan and friends: Policies that lower the price of calories raise average BMI, while policies that raise the price of calories lower BMI. Why not stop doing either and see what happens?

    As for the methods, my quick perusal of the paper suggests that they only look at average calorie consumption. I would have liked to see some discussion of what happens in the tails. Although the average person is getting heavier, the increases in body mass over time are much larger in the upper tail. Those in the upper tail are likely to be more sensitive to changes in prices, and might substitute between products in a different way than those around the mean.

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  5. James says:

    Before I buy into this, I would like to see some evidence that the cost of calories has any great effect on the number of calories consumed.

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  6. Travis says:

    I find this research highly suspect for two reasons. First, the conclusion that simply consuming more calories would increase in net weight gain, and not making a differentiation between the types of calories (particularly sugar).

    Second, the conclusion that sugar consumption would increase when HFCS is primarily a product of food subsidies and occurs in almost all foods in the US. Unfortunately, there isn’t even anything close to a scientific consensus on how different things you eat can impact your health, and until there is, studies like this will be virtually meaningless to policymakers.

    Until then, the focus should be on fiscal fiscal impact of subsidies, rather than some silliness about how subsidies decrease the number of calories produced, and coming to the conclusion that people would thus lose weight.

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  7. AFG says:

    I agree with you that the effect of subsidies is probably drastically overstated, but that study misses a couple of potential effects.

    1. The elasticity of price for consumers may be low, but is that true for producers too? For example, how much does the subsidy encourage Coke and every other soft drink to use High Fructose Corn syrup instead of sucrose (and HFCS is net more toxic in provoking the insulin response that makes us hungry)?

    2. For the past 50 years of school cafeteria lunches, how much less protein and vegetables would have been replaced with bread and other refined sugars? They buy in bulk, so the behavioral response to small differences in prices is likely to be larger. Tastes and eating habits are often formed in childhood and the schools got they addicted to toxic sugar.

    3. Same goes for Restaurants and supermarkets, which affects our available options.

    4. It’s not just subsidies, but official government information (Food Pyramid) that taught every child that corn and refined sugars like bread are healthy.

    But you are right, these effects still couldn’t explain very much of the increase in obesity. Anyone who has read the literature knows the true culprit is the low-fat myths of the past half century. Somehow we convinced ourselves that the way to lose weight is to replace the type of calorie most effective at lowering hunger (Fat) with more of the one most effective at increasing it (Sugar).

    -AFG
    http://www.afoolsgame.com

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  8. hanmeng says:

    Hmm. The trend in the comments could be summed up as “I disagree with this research, so it must be wrong.”

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