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.