What is in this article?:
- Many commentators have claimed that American farm subsidies have contributed significantly to the “obesity epidemic” by making fattening foods relatively cheap and abundant, and that reducing these subsidies will go a long way towards solving the problem.
- The following research shows that U.S. farm subsidies have had generally modest and mixed effects on prices and quantities of farm commodities, with negligible effects on the prices paid by consumers for food and thus negligible influence on dietary patterns and obesity.
Implications for obesity
A careful examination of the linkages between farm policy, food prices, and obesity in the United States demonstrates that U.S. farm commodity subsidy policies have had very small effects on obesity. This finding is driven by three key factors. First, with a few exceptions, farm subsidies have relatively small and mixed impacts on prices of farm commodities in the United States. Second, the share of the cost of commodities in the cost of retail food products is small, and continues to shrink over time. Third, food consumption patterns do not change substantially in response to small changes in food prices.
Our specific simulation results across a range of scenarios show that the impact of farm policy is small and mixed, such that the net effects are ambiguous. Eliminating all farm subsidy policies, including trade barriers, would decrease consumption of some food products, but would increase consumption of other food products, most likely leading to an increase in overall caloric consumption. In other words, contrary to common claims in the popular media, farm policies have more likely slowed the rise in obesity in the United States—but any such effects are small. Compared with other factors, the policy-induced differences in relative prices among various farm commodities have played only a tiny role in determining excess food consumption and obesity in the United States.
Farm commodities have indeed become much more abundant and cheaper over the past 50 years in the world as a whole as well as in the United States, but not because of subsidies. This abundance mainly reflects the effects of technological innovations and increases in farm productivity, which has alleviated hunger and poverty throughout the world while at the same time reducing pressure on the world’s natural resources. If cheaper and more abundant food has contributed to obesity, then we should look to innovations in production agriculture rather than farm subsidies as the fundamental cause. Even so, it would be a mistake to seek to oppose and slow agricultural innovation with a view to reducing obesity rates. Conversely, though it might be beneficial in other ways, eliminating U.S. farm subsidies would have negligible consequences for obesity rates. The challenge for policy makers is to find other—more effective and more economically rational—ways to reduce the social consequences of excess food consumption, while at the same time enhancing consumption opportunities for the poor and protecting the world’s resources for future generations.
For more information
Alston, J.M., Sumner, D.A., and Vosti, S.A. (2008). Farm subsidies and obesity in the United States: National evidence and international comparisons. Food Policy, 33(6), 470-479.
Beghin, J., and H.H. Jensen. (2008). Farm policies and added sugars in US diets. Food Policy, 33 (6), 480-488.
Centers for Disease Control and Prevention (CDC). (2010). National Health and Nutrition Examination Survey Data (NHANES), 2005-2006. Available online: http://www.cdc.gov/nchs/nhanes/nhanes_questionnaires.htm.
Okrent, A. (2010). The effects of farm commodity and retail food policies on obesity and economic welfare in the United States. Doctoral dissertation. University of California, Davis.
Organisation for Economic Co-operation and Development (OECD). (2010). Producer and consumer support estimates. OECD Database 1986-2009. Paris, France. Available online: http://www.oecd.org/document/59/
United States Department of Agriculture, Economic Research Service (USDA-ERS). (2008). Agricultural Outlook: Table 8. Farm-Retail Price Spreads. Available online: http://www.ers.usda.gov/publications/agoutlook/aotables/.