« The Line | Main | Murder in New York » Overeating Fact of the Day22 Nov 2007 09:48 pm I was dimly aware that our farm subsidy policies weren't just economically inefficient, but bad for public health, too. But Neil Sinhababu brings the point home with a striking fact, namely that just 0.37 percent of farm subsidies go to fruits and vegetables. And here's the factoid in graphic form:
This he mentions by way of pimping for John Edwards' policy agenda for fighting hunger and malnutrition which certainly looks good to me. Comments (25)
The public health message is a good one, but the use of the three-dimensional pyramids for graphs is a little misleading. The ratio of meat/dairy subsidy to grain subsidy is about 5.5:1 but visually (since you perceive the face of a pyramid, or make assumptions about the volume) the ratio looks like 30:1 or maybe even 166:1. I don't think I can imbed an image. A less exciting but more accurate version of the right-hand graph would be: P: ****** (protein) and the left-hand: 
Whoever created those pyramid graphs needs to re-read Tufte. That "73.80%" is, of course, just the representative of the height of the section of the pyramid, but the volume represents 98% of the volume of the pyramid, grossly exaggerating the statistic.
Fruit and vegetable farming probably gets a lot more bang from undocumented workers than the more mechanized farming industries, so that's a de facto public subsidy.
Excellent point Allan, and this is probably your best post of the week Matt.
Sigh, different day, same s**t, I guess I'll just have keep reposting what I said over at Ezra's for the rest of eternity... Subsidies are pretty much a smoke screen when it comes to the question the (graphic's) headline asks. The answer primarily comes down to labor and transportation costs plus the impacts of shelf life. A farm family, with modern equipment, can easily harvest 2,000 acres of grains yielding anywhere from 1,000 pounds (for a relatively high profit crop like dry edible beans) to 10,000 pounds (for corn) an acre. Those crops can hold their quality in storage for years if necessary and for the most part can be delivered to the consumer largely untouched by human hands.Here are some numbers for the geeks among you.
Wow, the love fest for central economic planning is powerful here. You understand that many of these subsidies you love work by the government taxing us in order to buy things like milk and butter and then *destroy* them, thereby raising the price of those products to the benefit of the farmers. Do you understand that this *hurts* the poor, not to mention everyone who pays the taxes? Sorry, I guess economics and the study of incentives aren't popular here.
Putting side that the Federal Nutrition Guidelines are basically crap designed by bureaucrats that know practially nothing about nutrition-- Subsidies are a bad idea in the first place. Edwards' ideas bother me a lot. Let's start with what he's already proposed. Now, understand this-- Nobody sane wants people to be poor and hungry. Nobody. I want people to be healthy, productive and have a high a standard of living as possible. With that said, what he's talking about is bad. Here's the previously proposed series of bad ideas: - Raising the minimum wage. Economic statistics show proverty and unemployment increase with higher minimum wage laws. Increasing minimum wage will hurt the very people he's trying to help-- One by increasing unemployment, two by increassing prices for the consumers (both rich, middle class and poor.) - Universal health care. The current system is bad because of government laws, mostly the HMO laws enacted in the 1970's. Universal health care is a nightmare and takes choice away. The Canadians and British have major problems in their system, it makes no sense why we should emulate it. - Cutting taxes for low-income and middle-class. Cutting taxes is a great idea, but how is he going to pay for the programs he wants to start in the first place? We're already $9 trillion in debt. - Safety net for workers. Increasing unemployment benefits will only increase the number of employed. Statistics have shown this Ok, lets get to what he's proposing now. First, "Pass a Farm Bill with Strong Nutrition Programs." We need nutrition programs? To what end? To help poor adults eat? Last I checked, we are the fattest nation on the planet, that includes the very poor people he's trying to save. Second, "Get Food Aid to More Eligible Families." Bad idea. Statistics have shown we are the fattest nation on earth. Why do we need more food aid? Having lived in a car and lived on less than $3 a day, I can tell you this notion of food stamps is a waste of time. However, there is one good thing he mentioned-- allow a deduction for child care costs. Bravo, that is what we need more of. Third, "Provide Healthy Meals for Children." Of course the kids need to eat, but this program I can't go for. Now, I don't want any child to go hungry, I just don't trust the government to feed the kids. They couldn't save the people in New Orleans and they've gotten us in a stupid war in Iraq. What to do? Well if there were greater economic prosperity, there wouldn't be starving children. Take hundreds of billions from the wars overseas, give it back to the people. It might take a year, but the results would be very noticeable. Fourth, "Strengthen Food Support for Seniors." I see this as the same thing as the problem above. Meaning, that the people he's referring to are dependants. The solution is the same, take the war money and give it back to the people. Fifth, "Address the “Heat or Eat” Crisis." This is essentially an energy plan that he's trying to tie into food. He mentioned helping states give out loans for weatherizing homes. As long as he gives the money directly to the states and cedes control to the states, this is alright. He also mentions increasing competition among energy sources, I hope he doesn't do anything but get out of the way. We subsidize oil companies with millions per year, if that was stopped-- short term we'd see higher prices but long term, a new energy market would form and we could probably get off middle east oil. Sixth, "Support Food Access in Every Neighborhood." This is the dumbest thing I've ever heard. Subsidizing supermarkets? This is a door to hell waiting to be opened. Imagine all the money spent on corporate welfare now. It will be even worse if you include inner city grocery stores. It's a local problem, not a national one. The states, the counties and the cities should deal with this, not the federal government. It seems to me there need to be less programs, not more. If all the spending that was done on Iraq and Afganistan was taken and put back into the hands of the citizens, everything would work out fine.
Those of us who are vegetarian have been aware of this for quite a while. If you had any idea of the influence the meat and dairy industry and their chemical friends (Monsanto) have on our government you'd understand perfectly why this is.
I second B Reyes's opinion. Get rid of ALL farm subsidies. Don't even pass a farm bill this year. That'll raise those meat and dairy prices enough for fruits and vegetables to be competitive. Use the money saved and cut taxes from the bottom up. Move all of the tax brackets up and create a large tax free bracket for up to 50,000 per person. Or even better, abolish the payroll tax and increase income taxes by 5%. The raising the minimum wage hurts those that earn the minimum wage. They either have to increase their skill set to merit the raised minimum wage or lose their jobs or the business that hires them closes. The benefactors are those just a step up, earning about 50%-100% higher than minimum wage. They benefit from the elimination of the competition provided by lower wage earners. The minimum wage also creates a catch-22 for first time job seekers. They don't have enough experience to merit minimum wage, so business don't want to hire them. Unfortunately, they can't get any job experience without that first job.
Re: Economic statistics show proverty and unemployment increase with higher minimum wage laws. Your claim is bogus. Statistics sow that the minimum wage has no effect on employment. Re: The Canadians and British have major problems in their system, it makes no sense why we should emulate it. No one, I repeat no one, is suggesting that we emulate the British NHS. And no serious proposal is on the table for a Canadian style system either (although "major problems" is an exaggeration-- such problems as exist are of lesser magnitude than the problems with our system). One can certainly have universal health without a Canadian or English style system Re: Safety net for workers. Increasing unemployment benefits will only increase the number of employed. Statistics have shown this I assume you mean "unemployed". Statistics show nothing of the sort. The unemployment rate rises and falls without regard to the level of benefits. And historically the highest unemployment levels occured when there was no unemployment insurance.
Setting aside the fact that corn production is an out of control monster which is a nutritional, environmental ,economic and ultimately even a cultural nightmare, the old system of subsidy, ie acreage set asides and setting a floor on prices, made quite a bit of sense. Then came Freedom to Farm, which was direct welfare payments to huge operators if they needed it or not. It was and is a conservative ideological abomination but of course that made no difference to our GOP. The free market for foodstuffs will never work because it would be the only free market extant and free markets don't work. Meaning thousands of producers who have no way to differentiate their product and the natural tendency to over produce. Booms and busts causing region wide depressions and occasional actual food shortages and huge price spikes would be the rule. Everyone knows of course that competition in all other products is oligopoly, with few suppliers who avoid large surpluses and keep prices close together. Let's take the early 80's farm 'crisis'. Thousands of farmers lost their farms but the acreage was picked up and used by others. Without the billions in subsidy, called deficiency payments at the time, those acres would have been abandoned, Land prices would plummet and virtually all farmers would be technically bankrupt. Banks in the farm regions would have gone under in huge numbers. Thousands of counties, literally, would simply have gone broke too. Entire rural regions would look like the Depression. In a year or two prices would spike, especially for meat and dairy as herds would be liquidated. Spike high enough to surpass the cost of the subsidy. All that suffering for naught. Somehow, some way, the government would have to step in to provide credit so farmers could take to the fields again. With that would come a new subsidy regime. The 'free market' would simply not be able to supply credit on a timely basis to already bankrupt farmers. Credit is the absolute foundation of farming. Period. By letting the 80s farm crisis ' work itself out' in classic free market style would have meant the bankruptcy of the farm credit system. The farm programs are really not subsides to farmers as much as subsidies to the credit system. Keeping payments flowing and just as important keeping a floor under land prices. Adequate food supplies is the reason government was invented. Such is a distant conscious memory now but it's something that is known down to the DNA of politicians the world over. Cheap food is the number one thing a government must work to insure. One year of actual shortage of meat, dairy and grains would be a political disaster the likes of which has never been seen in the US. No politician in their right mind would ever risk it. While the various farm programs don't seem to address the probability of such a disaster in fact they do. Debate away on the shape of government intervention in food production but if you think for a moment governments will ever step aside from food production issues, or should, then your simply a starry eyed naive ideological wanker. PS Farmers and farm economies are poor. It's the nature of commodity production based economics. At best throughout history large land owners could be rich but the overall farm populace was always poor, and ill educated. Name me a really poor country and I'll show you a huge population of subsistence farmers. Living lives of isolation, ignorance, poverty with unremitting stress and serial disasters.
You can't really compare Canada to..well..anything really when it comes to health care, for two basic reasons. #1. It's really fucking huge. #2. Being next to the black hole of the US reduces the number of doctors/nurses in Canada. The problem isn't a lack of funding or willpower...it's straight manpower. The money is there if the trained people are there. Part of the problem is that even nursing requires a 4 year degree now, decreasing the numbers of eligible people going into the field. And to be honest, if that argument about the minimum wage were true, there would be NO reason to keep any sort of free market or capitalist economy around. Why? What you're saying is that competition doesn't matter. First of all, the value added for most jobs is probably a whole lot higher than what the people are getting paid for. And usually by a large amount. In fact, a lot of those minimum wage jobs really are essential...without those jobs the business COULD NOT OPERATE. Period. But labor value is affected by competition of course... And that's where prices come from. If you increase the minimum wage it DOES NOT mean that prices have to go up. It just doesn't. The increases could come from other places in the company. Or profits could be lower. Or things like that. If Company A decides to hold their prices down after wage increases, and Company B doesn't, then Company B's customers are going to flock to Company A. That's the way the system is supposed to work. We try to fight inflation on the backs of the workers who make the economy...well..work. Someone should do a study on the inflationary effects of profit. Because I'll bet you there's more there than in terms of wages.
The Edwards focus on malnutrition in addition to hunger is a welcome addition, and a sign his policy people are actually talking to people who work in the field on these issues. His neighborhood nutrition access plan is another good one, it seems similar to the Community Reinvestment Act a successful program that targeted redlining in lending. I'd debunk B Reyes, but, JonF already did a devastating job up-thread.
It is amazing that Mr. Yglesias apparently has about as much understanding of what is happening to this country as John Edwards does. While it is a noble cause to feed the hungry, the government is, thanks to a long line of incompetent Administrations and Congress’, unable to maintain itself without going deeper into a debt-creation system it can no longer afford. We think there is widespread hunger now, just wait until hyper-inflation begins to take a death-grip on our monetary system. A few years ago, our Fiat Monetary System entered into a period of its Practical Possible Lifespan, this is evidence by the fact that the economy is having difficulty maintaining itself through even minor disruptions; such a small interest rate hikes. Soon, the system will enter its Maximum Possible Lifespan where the massive debt upon which the entire monetary system is built upon will begin to siphon off more than the economy can produce. Every Fiat System in history has always ended in failure; in collapse…I have to wonder why we should have the audacity to believe ours will be any different. It is obvious that most of the political candidates don’t have a clue about the financial situation this country is facing; particularly the Edwards plan ignores many critical factors. Of course, Mr. Bush has only hastened the time-frame of this country’s monetary demise by a reckless war, massive borrowing and idiotic spending. Shamefully, our government appears oblivious to the economy threats we now face and 99.999% of the Presidential Candidates are spitting out the usual tripe, bloated with promises that can never be kept, but they have to play to the voters sympathies, desires and hopes even though such promises have no foundation in a reality that this country is rapidly approaching. Every single dollar, either digital or physical, has been borrowed into existence; it is an obligation, a promise note to pay up at some point. The massive debt is irreversible, and in fact it must continue to balloon if economic growth is to continue and yet as it is expanded there is a mathematical point of termination that looms over the entire system, but does Congress care, does the politicians care…apparently they don’t because they fail to understand how the system works. The Fiat System will terminate and we will see it in our lifetimes. Think about this: everything that we know is totally connected to this rapidly failing system, all your investments, all your pensions, all your 401Ks, all stocks, bonds, everything. Now if the foundation upon which the entire system is built upon fails what happens to all of those things we rely upon? We need to wake ourselves from this politically induced slumber until we are rudely awakened by a reality that few are prepared to face.
"Now, I don't want any child to go hungry, I just don't trust the government to feed the kids. They couldn't save the people in New Orleans and they've gotten us in a stupid war in Iraq Well, that is beautiful in its absolute depraved fuckwittedness- as they say, Republicans insist that government doesn't work, and when they get into office, they do their best to prove it- But anyway, what I actually wanted to say, - and the first bit is of course a direct consequence of the graphic (however badly designed) above: " "One study shows that low-income Americans now would have to spend up to 70 percent of their food budget on fruits and vegetables to meet new national dietary guidelines for healthy eating. And a second study found that in rural areas, convenience stores far outnumber supermarkets and grocery stores -- even though the latter carry a much wider choice of affordable, healthy foods." But no doubt anything gubmint did to help low-income Americans eat healthier wouldn't, almost magically, actually help them, but actually hurt them. Yep.
The approach that farm-policy reformers are taking here (more subsidies for healthy foods, instead of fewer subsidies for everyone) is like reforming the crack-powder cocaine sentencing disparity by increasing the powder coke sentencing until it's as harsh as the crack sentencing. In other words, it's dumb.
"Raising the minimum wage. Economic statistics show proverty and unemployment increase with higher minimum wage laws. Increasing minimum wage will hurt the very people he's trying to help-- One by increasing unemployment, two by increassing prices for the consumers (both rich, middle class and poor.)" If this was true, as we collected more data from more studies that indicate that the minimum wage leads to higher unemployment, studies with larger sample sizes would have lower margins of error that smaller sample sized studies. However, this doesn't happen, which suggests publication bias, meaning that studies that suggest the minimum wage leads to higher unemployment are more exciting and thus get published instead of the more numerous studies showing a lack of a correlation.
"The free market for foodstuffs will never work because it would be the only free market extant and free markets don't work" Markets don't work? This is the stupidest comment I have read in weeks. So what, communism worked? That must be why the Soviet Union is still around, right? Famine wouldn't/couldn't exist when government is calling the shots? This country became prosperous due to the free market. You can apply the same principles to farms as you would any other product. Get it straight.
"If this was true, as we collected more data from more studies that indicate that the minimum wage leads to higher unemployment, studies with larger sample sizes would have lower margins of error that smaller sample sized studies." The current level of minimum wage hurts workers looking for their first jobs and low paying jobs. Workers have three option. They can work under the table and evade taxes and regulation or they can increase their skill set and go to school or they can collect welfare. Instead of gain experience at work, these students to pay for experience by attending some classes. Neither of these two choices show up in your "unemployment statistics." They become "students" or "discouraged workers." Raise the minimum wage much higher and it starts endangering many more jobs. I think when they say "markets don't work" for agriculture, they're pointing to the aftermath of the Great Depression. Of course the market didn't "work!" It was the Great Depression. It was the great bust that came after the big boom of the 1920's. The entire country was over-producing and over-farming. It's the same rational for Social Security. A whole bunch of old people didn't have any retirement savings in the 1940's. Of course not! The Great Depression wiped out all their savings. Instead of realizing the unusual circumstances, we get the conclusion, "People don't save enough for retirement, so let's get government to do it for them." Unfortunately, the government sucks at saving and there's a national debt of 9 trillion dollars.
"I think when they say "markets don't work" for agriculture, they're pointing to the aftermath of the Great Depression. Of course the market didn't "work!" It was the Great Depression. It was the great bust that came after the big boom of the 1920's. The entire country was over-producing and over-farming." This is correct for the most part. It's hard for things to get going in a depression. But over-production and over-farming were not the entire cause. The largest contributing factor to the great depression was because of the 1929 crash and then the susquent bad programs that followed. For the 1920's boom and crash, it was the Federal Reserve tampering with interest rates and money supply. They were the cause of the first problem. Most prominent economists, including the current Chairman of the Federal Reserve Ben Bernanke and Nobel Prize winner Milton Friedman have talked about this in depth. The second problem was the government programs that came after. There was the devaluation of the dollar by FDR, the tampering with in farming and crop prices and the increase in government spending that worsened the inflation. The country didn't recover completely until after WW2. I'm not saying the people that did this were stupid, they just didn't know any better. It was a bad time. We've got not room to talk either. Consider now-- As a country we're in a stupid war with people that did nothing to us (Iraq) and we've re-elected a horrible civili liberties abusing president because we were scared of terrorists attacking. Hindsight is always 20/20. Still, I have to say, I don't like it when people automatically assume because something bad happens and markets react, that means capitalism is a failure. It's not perfect, but it is by far the best system to have yet been concieved.
A free market is a market with hundreds if not thousands of sellers competing. In your supermarket 7 companies ultimately get 90% of your dollars. There are three, barely, automakers in the US. Should I go on? The modern corporate industrial economy which works in close partnership with the government is 'free' in a very specific way which has nothing to do with the way Adam Smith saw markets. Massive oversupply in any consumer good is simply impossible. If there is oversupply then the production stops or is reduced. That's easy enough to do when there are three or five or seven major companies producing This isn't by the way a blanket indictment of most markets. (Smith said no two businessmen meet without trying to limit competition or fix prices. He was right but that isn't necessarly a bad thing. Such things bring stability. Stability is what fosters growth. (Too much however brings other problems)). Boom and bust is a terribly destructive cycle It is in everyones interest to smooth out the business cycle and one way to do that is to have gigantic companies control most production. Prices and supply are managed in our economy and have been for almost 100 years. Go price soap or cooking oil in a store. Such commodity like items are priced exactly the same. There is precious little to differentiate such products so getting a premium price is very difficult. Margins are low. A few makers dominate the shelves. When you have thousands and thousands of producers, making, and this is very important, something which is exactly like all the others, like corn, then you are guaranteed that most times there will be over production. Luckily a surplus of food is a good thing. It isn't just a good thing, it's an absolute necessity. Not in quite the way it was in olden days when starvation was one bad harvest away but it is a poltical necessity to keep food prices down. (Something which you will soon be hearing a lot more about as food prices are skying}. If there was ever an absolute shortage of a major crop in the US and the headlines said we had to import our food there would be wailing and gnashing of teeth the likes of which we have never seen. I can guarantee you if during the early 80's farm recession the subsidies had been yanked then we would have had shortages two years later. The farm credit system and most farmers would simply have gone belly up. Not able to get credit to plant. The few billions of dollars in the crop subsidy programs kept the system afloat. Absent that millions of acres would have been fallow and we would have been importing wheat. In three or four years someone would step in to provide the credit to just recently bankrupted farmers, when prices were way way up. A couple of years on surplues would happen again. Wash, rinse, repeat. There is nothing good about such a thing, except in the minds of simpleton ideologs.
Rapier, You make an interestng point. You might like this report about farm subsidies by the University of Tennessee Agricultural Center.
Do these statistics include subsidies for water for the central valley of California? There is a fair amount of subsidy there. (Of course, ethanol mandates are also probably excluded. The government has too many thumbs on too many sides of the scale, in any case.)
Dear Matt, A salad costs more than a Big Mac because people are willing to pay more for it. Yours truly,
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Heads in the Sand
This he mentions by way of pimping for John Edwards' policy agenda for fighting hunger and malnutrition which certainly looks good to me.
Aww, Matt and Petey, sitting in a tree . . .
Posted by southpaw | November 22, 2007 11:06 PM