There are a lot of legitimate debates in food, but every now and then there’s an issue where one side is clearly wrong and the other is right.
This is one of them. If you believe that changes in farm subsidies would substantially change what Americans eat, you’re just flat-out wrong.
I am no fan of our subsidy system and have been calling for an overhaul for years. But overhaul all you like, and it won’t move the needle much on Americans’ diets.
Why? Well, let’s start with some math.
First, let’s see how much money we’re talking about. The vast majority of the Agriculture Department’s payments to farmers go, and always have gone, to growers of commodity crops: corn and soy, but also oats, rye, sorghum, and (I’m foreshadowing here) legumes like chickpeas and dry beans. That money comes in two forms: insurance premium subsidies and programs that cushion farmers from low commodity prices or revenue losses. The amount varies year to year, but we’re looking at $10 billion to $20 billion.
Call it $15 billion.
Let’s distribute it instead over all the farms growing fruit and veg. According to the USDA, we have 6 million acres of fruit and 4 million of vegetables. We also have 4-ish million of what are classified as commodities but count as vegetables: those foreshadowed dry beans, chickpeas, lima beans, lentils and a couple other legumes (more on these later).
So we’ve got $15 billion to cover a little over 14 million acres. For the sake of a round number, say $1,000 per acre. And let’s assume all of that money gets reflected in the retail price. None for the farmer, the farmworkers, the supply chain. In the real world, of course, it wouldn’t work that way, but I want to assume maximum impact on price.
How would that play out? Let’s look at broccoli, a crop that can yield about eight tons per acre. If we divide that $1,000 by 16,000 (to convert the tons to pounds), that’s 6 cents a pound (other green vegetables will be similar). Apples can yield 18 tons per acre, which means the subsidy lowers the price by 3 cents per pound (and other tree fruits will be similar). A mature walnut orchard can produce 2.7 tons per acre, so the subsidy comes to 19 cents per pound (and other tree nuts will be similar).
But wait! Would subsidizing broccoli mean more farmers would grow it, so the increased supply would lower prices and Americans would eat more? That’s a question for an agricultural economist, so I asked a few of them.
Julian Alston is professor emeritus of agricultural resources and economics at the University of California at Davis. Will Masters is an economics professor at Tufts’s Friedman School of Nutrition Science and Policy. Joe Glauber, former USDA chief economist, is a senior research fellow at the International Food Policy Research Institute.
They all said the same thing. Subsidies have very little impact on what people eat.
Again, there’s relevant math. Americans spend more than $2 trillion every year on food. And farm subsidies, even in the big-spending years, are 1 percent of that. One.
Masters summed it up succinctly in an email: “Differences in diet quality are driven almost entirely by variation in factors other than retail food prices, and differences in retail food price are mostly driven by factors other than farm policy.”
I particularly liked Alston’s take on the impact subsidies have: “It can’t be big because it’s just small,” he told me.
Still, a big shift in incentives would, in all likelihood, increase supply somewhat, and that would ripple through our food system. A paper that modeled a complete global shift in subsidies to healthful foods predicted that, in the United States and many other developed countries, it would increase production by just under 20 percent, which would lead to a consumption increase of about 10 percent.
If you think that sounds like a significant change, keep in mind the low baseline: Most people eat only about one serving each of fruits and vegetables every day. So, based on USDA estimates of supply (a proxy for consumption), that would be 13 more vegetable calories and 7 more fruit calories per day. And that’s if all subsidies, worldwide, were changed.
The USDA has similarly small estimates of effect. A 10 percent decrease in prices would result in a 2 to 5 percent increase in consumption in low-income households, a negligible difference.
Vegetable-eating just isn’t very price sensitive. If it were, we’d expect wealthier people to eat many more vegetables, but they don’t. One of the few analyses that looks at this reports that higher-income people eat less than half a serving more per day than the lowest income tier. The fruit gap is less than a quarter-serving. It’s self-reported data, so don’t take it to the bank, but it gives an idea of the magnitude of the gap.
Here’s why. People just don’t like vegetables. (I know you do, but most people don’t.) The world is filled with foods that people find much more appealing, and those are the foods they choose. If nothing can make the president of the United States eat broccoli, what hope is there for the rest of us?
(And if you’re thinking that, on the other end of this trade, taking the subsidies away from corn and soy would increase junk food prices, boy do I have a column for you.)
If you still think that subsidies and consequent lower prices would increase consumption of healthful foods, I invite you to consider beans. They are subsidized — exactly the same way corn and soy are. They’re about as cheap as food gets. You’d think there’d be a run on lentils! But your average American eats all of one ½-cup serving of beans per week.
Then take a look at the frozen-food aisle. There, you can find vegetables that are not only very inexpensive — a pound of almost anything for about $1.50 — they’re partially prepped. No peeling, no chopping! Yet they’re a sliver of the market.
All three economists I spoke with confirmed that there is widespread agreement among economists that farm subsidies don’t have much impact on diets. Masters wrote in an email that “the lack of linkage between food consumption and farm subsidies is one of the things that ag econ students find astonishing.” Because they’ve heard, as you probably have, just the opposite.
If we want incentives for people to eat fruit and veg, farm subsidies are a lousy one. But there is a better one: consumer subsidies. Because demand isn’t very responsive to price changes, we need big price changes to drive even small consumption increases. So instead of giving money to farmers and hoping for the best, let’s give it to the eaters who need it most: SNAP recipients.
A pilot study that refunded 30 cents of every SNAP dollar spent on fruits and vegetables increased consumption by 26 percent. That’s still only about a quarter-cup, but it’s much more than we’d hope to see by rejiggering subsidies. And if we revamped SNAP to be more like the Women, Infants, and Children program (WIC), which subsidizes a selection of healthful foods, we might even make more progress.
Meanwhile, though, please stop saying that farm subsidies shape American diets. They just don’t.
I’ll see myself out.