Farm subsidies do not cause obesity, researchers say

A team of UC Davis researchers has found that there is no evidence to support any correlation between farm subsidies and obesity in the United States. Their findings appear in the December 2007 issue ofAgricultural and Resource Economics Update published by the University of California’s Giannini Foundation of Agricultural Economics.

A government subsidy is paid to farmers and agricultural businesses with the intention of supplementing their income and maintaining a necessary supply of goods. The extra money ensures that farmers are able to meet quota and guarantees a price floor – a designated minimum that can be charged on a product.

But the system of U.S. Farm subsidies has many critics – some of whom believe that subsidies are a key contributor to America’s obesity epidemic.

Steve Vosti, an author of the article and associate director of the center for Natural Resource Policy Analysis said they were inspired to get into this by reading critics’ false claims.

One of the reasons we got into this was because we were constantly reading things by Michael Pollan and others, including last year’s campus book project, The Omnivore’s Dilemma, in which people said things like the reason we’re fat is because food is cheap, particularly some highly subsidized grains, he said.

Julian Alston, an agricultural economics professor at UC Davis, another author of the article, said in a press release that this is simply not true.

A variety of arguments and evidence can be presented to show that the programs are ineffective, wasteful or unfair. Eliminating farm subsidies could solve some of these problems – but would not even make a dent in America’s obesity problem, he said.

Alston, Vosti and members of the UC Davis department of agricultural and resource economics investigated the claim in coordination with the UC Davis department of nutrition and the Iowa State University department of economics.

The team of researchers found that farm subsidies have had only very modest, mixed effects on the total availability and prices of farm commodities, and therefore cannot be called an instigator of the obesity problem.

You could remove the subsidies tomorrow if you wanted to, and the effects on the price floor would be zero, Vosti said.

According to the report in the Agricultural and Resource Economics Update, there are three reasons why subsidies cannot affect obesity.

First, farm subsidies must have made needed ingredients of even relatively fattening foods significantly more widespread and cheaper.

Daniel Sumner, the third author of the article, said that if there is any change, it is minimal at best, and may change over time.

The effect is very small, and could go either way. The balance of adding government subsidies versus more fattening foods being produced is very small, and the net effect is somewhere around zero, and could favor either side, he said.

Second, lower prices caused by farm subsidies should result in significantly lower costs within the food industry, and then those cost savings by the agricultural businesses must have been given to consumers in the form of lower prices and fattening foods.

Finally, food consumption patterns must have changed to respond to these changes in policy. The team of researchers found that the magnitude of these impacts is zero, or very small.

Sumner said that food, an inelastic good, and its consumer’s eating habits will rarely be affected by slight changes in farm subsidies or ingredient price, especially in the United States.

In a poor nation in Africa, for example, there may be an effect on how much people eat relative to the cost of foods, but that is not so in the United States. Consumers here will consume basically the same amount regardless of small changes in the market, he said.

The group also proved that subsidies increase consumer prices and discourage consumption of sugar, one of the products to blame for America’s weight.

MIKE DORSEY can be reached at campus@californiaaggie.com.