U.S. farmers like their cheap food policy

I enjoyed this report from a road-trip Michigan farmers recently took to Australia, to survey the agricultural system there. The American farmers took one look at a REAL market economy and got a palpable case of culture shock.

Learning how Australian farmers have reportedly transitioned from being government subsidized to relying solely on the marketplace for income was one of the missions of the Michigan Farm Bureau (MFB) trip. But the 20 tour-goers could not substantiate this claim, and they found several incidences where Australian farmers appeared to receive indirect assistance and where the nation's transition away from government supports seemed to come at the expense of consumers.... As a result, Australian consumers, in essence, have assumed a "farm aid" role by paying significantly higher prices for their food....

"The government philosophy there is not for Australian farms to produce for the domestic market but for the export market, and for the domestic market to pay the cost," said Wood, a Sanilac County dairy farmer. "So instead of taking tax dollars like the United States does to support agriculture, money is taken from consumers directly via food processors and retailers...."

While the Australian philosophy runs counter to the U.S. farm bill purpose of providing "farm security and rural investment," it's not illegal. "Right or wrong, the philosophy is compliant with the World Trade Organization (WTO)," said Wood.

The Australians earn their keep directly via food processors and retailers! And this isn't even illegal! You may also enjoy the American farmers' comments about Australian health and food safety:

Tour-goers also discovered that Australian farmers indirectly benefit from a national health care system, so they save on insurance expenses for their families and their farm employees. In addition, the group found several incidences where the island country's phytosanitary standards were more stringent than WTO minimums, allowing the country to legally ban imports under the guise of "health concerns."

What a discovery! Those Australians save on insurance expenses for their families. Oh, no! Not their farm employees, too! And that's pretty sneaky of them to maintain sanitary standards above the minimum. We wouldn't permit it here.

More on the cost of good nutrition

An earlier post in U.S. Food Policy linked to the Boston Globe's article on the cost of a healthy diet. A new study from Karen Jetter and Diana Cassady at UC Davis went into Los Angeles and Sacramento grocery stores to measure the availability of healthy food choices, the price of a market basket of healthy groceries (whole wheat breads and pastas, skinless chickens, lowfat milk, etc.), and the price of a comparison market basket based on USDA's Thrifty Food Plan (TFP).

Our results show that most people had access to healthier foods, though there was sporadic availability of some healthier items in lower-income neighborhoods. The healthier market basket was more expensive by about $32 to $41 due to higher costs of whole grains, lean ground beef, and skinless poultry. This higher cost is equal to about 35 percent to 40 percent of low-income consumers’ food budgets.

The results on availability of healthy food were interesting, considering the high degree of concern about supermarket access. Supermarket access in the United States is highly variable from place to place. I sometimes refer people to USDA research showing that even most low-income Americans in this country have access to nearby supermarkets, but I have found this observation tends to annoy people who are familiar with a particular low-income community in which access is lacking. In my home town of Washington, D.C., for example, we had fine access to supermarkets in the neighborhoods of Columbia Heights and 14th Street, but in another high-poverty neighborhood across the Anacostia River, access was lacking. To somebody from Anacostia, it might be little comfort that supermarket access is pretty good for the average low-income family in the DC Metro area.

As for cost, the new study found that whole wheat pastas were more expensive than regular pastas. Lowfat milk was a little less expensive than whole milk, and ordinary potatoes were less expensive than the french fries that were classified as less healthy. This fits my family's experience. There is a price premium for any packaged food marketed as healthy, but many healthy alternatives to expensive conventional foods are actually less expensive. Taking protein sources, for example, consider the costs of meats versus legumes. Overall, the Davis study's "healthy" market basket, including packaged food marketed as healthy, was more expensive than the conventional Thrifty Food Plan.

Food safety and crisis management

As a profession, agricultural economists have been leaders in studying food safety policy. Here is the new book, Toward Safer Food, by Sandra Hoffman and Michael Taylor. It starts the heavy lifting in building a scientific framework for studying food safety risks, along the lines called for by the National Academy of Sciences in an earlier report.

And Neal Hooker, Ratapol Teratanavat, and Victoria Salin have an interesting article out in the current issue of Food Policy (sorry, the full text requires a subscription or university library membership). They discuss what makes the management of a food safety crisis effective or ineffective:

Policy makers within the US Department of Agriculture (USDA) complement the role of meat and poultry plant managers in food recalls. The increasing frequency and scale of recalls raise questions whether sufficient attention is placed on these events. Three measures of recall effectiveness are introduced to evaluate this public-private crisis management process. Managerial and technical variables are compared to these measures of effectiveness. Results from regression models suggest that recalls carried out by the smallest sized plants, those that took place after Pathogen Reduction/Hazard Analysis Critical Control Point implementation, and recalls involving processed products are more effective. Little evidence of differences was found in the effectiveness of the crisis management process between meat plants compared with poultry plants or for plants that are part of a larger firm.

A scholarly study of food safety crisis management may be just what a business executive needs on a week when something REALLY gross happens. On that story, see also Effect Measure.

What happens if the Supreme Court kicks out the beef checkoff?

Mike Barnett, editor of Texas Agriculture, covered the upcoming Supreme Court decision on the constitutionality of the beef checkoff. If the beef checkoff is overturned, other USDA-sponsored checkoff programs may also be invalidated in cases that take the beef decision as a precedent. However, Texas and several other states are enacting preemptive legislation that may establish state-sponsored checkoff programs fairly quickly in the event of an unfavorable Supreme Court decision.

So what's going to happen?

"Nobody knows," [Dallas attorney Will] Ellerman said. "It's a very divided court in a number of ways. I expect them to be divided. The fact that the court has even heard this case is significant." Ellerman says a ruling—expected this spring or early summer—will apply positively or negatively to the beef checkoff only.

But a number of judges in other checkoff cases are waiting to see what the Supreme Court does before rendering decisions. "What those courts will do at that time, they'll take the opinion of the beef case and apply it to those cases and come to a result," Ellerman said. "I expect they'll apply it similarly to how the Supreme Court approaches it's opinion in the beef case."

Harvard, the food business, and obesity

Several of my students attended Harvard's high-profile obesity conference last week (skipping class!), and came back with interesting things to say. Here is the Boston Globe's nice summary:

As a senior vice president for food giant ConAgra, Pat Verduin yesterday entered a potential lion's den -- a Harvard obesity symposium filled with health experts alarmed by Americans' eating habits.

During the rare encounter between corporate food makers and some of their most stringent critics, she flashed a slide showing her firm's healthier brands, like Healthy Choice and Egg Beaters, but then sought to soften the crowd: ''We make Slim Jims. I'm going to be honest with you," said Verduin, to laughter.

The Harvard Medical School two-day symposium, attended by about 140 people yesterday, took place against a backdrop of considerable alarm over childhood obesity. The concern is particularly felt in the halls of Harvard and its affiliated hospitals, whose researchers have played a central role studying and publicizing the obesity problem....

The symposium was funded through grants from McDonald's, Coca-Cola, Nestle, Dannon, and a number of other food makers.

I have lately been reading Harvard epidemiologist Walter Willett's Eat, Drink, and Be Healthy.

Shielding the restaurant industry from lawsuits

Sixteen states have passed laws protecting the fast food industry from consumer lawsuits for obesity and food-related illnesses, even if there were evidence of seller wrongdoing. Others are following quickly. I'm offering the reasonable reader the following debate, from which to try to discern the level-headed party.

Here is Michele Simon, who writes at CorpWatch this week:

According to Joanne Doroshow, executive director for the Center for Justice and Democracy, previous attempts by certain industries to single themselves out for special liability protection have proven to be a successful tort reform strategy. For example, Congress passed a bill in 1994 to shield the aviation industry and another in 1998 that provides immunity to suppliers of medical implants. Also, she says, “gun manufacturers keep trying, year after year, to get special liability protection.”

“Many industries are fearful that if they have been engaging in misconduct over the years that they are going to be subject to liability, which of course they should be,” says Doroshow. She explains that industries will often “see a problem looming on the horizon in terms of their liability exposure.”

Experts say that these bills could make these companies completely unaccountable to the public. Mindy Kursban, executive director and general counsel for Physicians Committee for Responsible Medicine. “Questions regarding the role of the food industry in our nation’s obesity epidemic are just now being brought to light. Rather than immediately absolve the entire industry of all potential liability, we should learn more about how they have contributed to this public health crisis," she said.

Here is the restaurant-industry lobbying group, the Center for Consumer Freedom:

A cabal of fat-cat trial lawyers are poised to launch an onslaught of frivolous lawsuits to cash in on our diet. From restaurants and food producers, to doctors, schools,
and even parents, no target is too big or small for these sharks who see dollar signs where the rest of us see dinner. Their strategy is clear: In order to woo a jury into dismissing any vestige of common sense, they have to shift the blame for America's allegedly burgeoning bellies away from a lack personal responsibility and onto those with the deepest pockets.

If I were faced with a level-headed advocate for carefully crafted tort reform laws, the economist in me might be forced to acknowledge certain points. Lawsuits are not an ideal vehicle for progress on this issue. In an environment of adequate access to fast food ingredient and nutrition information, the sound economic point of view might favor relying on consumers to protect their own interests.

But the same restaurant industry that is ramming these corporate shield laws down the public's throat, prematurely, is also trying to smoosh any effort to seek fast food restaurant labeling. I am sure you would rather see a good compromise on the table, as I would. But the bills being enacted now are a dreadful example of lawmaker obedience to big business commands rather than the public interest. You may want to check your own state's status and take action to make sure your state isn't next.

Misleading a Full Belly

Ha. With regard to pomegranates, the fine food weblogger at A Full Belly is too hard on herself: "Shame on me for not reading more carefully, perhaps pomegranates aren't all that." If there is any shame, I would lay it on the writer of the pomegranate sales piece, not the reader. And of course, there is nothing wrong with pomegranates, even if no fruit could possibly be all that was promised in the WebMD article.