Thursday, 27 September 2007

Farm Subsidies Make You Fat,


Farm Subsidies Make You Fat,
and other UN-conventional Wisdom

The percentage of obesity is inversely related to income. How can that be? How can the poorest people be the ones who take in the most calories? The un-obvious answer, food subsidies. Ok, you think I’m kicking at the poor farmer’s last chance of making an income at a time when family farms are disappearing just because subsidies are an easy target… but hear me out.
Walk down any supermarket aisle, and pretend you had ten dollars to spend for food. How could you get the most calories to sustain your poor family? Not with fresh fruits and vegetables. For your ten dollars, you cold buy 2,500 calories of carrots, but if you spend it on potato chips or Twinkies, you can buy 12,000 calories. If you buy orange juice for your hungry munchkins, you can get 1,750 calories, but if you buy them soda pop, you can get 8750 calories.
How can the worst foods be made more cheaply than a root? Subsidies! Sing it children. Subsidies, that starts with S and that rhymes with Mess and that’s what we’re in. We got a mess, my friend, right here in River City. (OK, my apologies to everyone whose enjoyment of The Music Man has been destroyed by that line. Let’s follow the chain of evidence. A Twinkie is a complex manufactured item produced from more than 35 different separate products, some of them from complicated production process of their own. Carrots are pulled from the ground and sent to the market. But the Twinkie is a complicated mis-mash of carbohydrates, a multitude of assorted fats, and sugars, almost all made from one or more of corn, sugar, wheat or soybeans (didn’t you ever wonder as you drive by miles of Illinois soybean fields, “Who eats all those beans?”. And Corn (which makes the sugars) and Soybeans (which make the fats) and wheat are all subsidized… heavily subsidized. The best thing to come out of the ethanol movement may be that it raises the price of corn enough to force food manufacturers to switch back to Cain sugar (healthier, less fattening), as some already have started to do. And so we reach the point when two of the top three priorities of James Holsinger, President Bush’s nominee for Surgeon General, would be “tackling childhood obesity, and making America a smoke free nation.”

And the crazy part is, the farmers who are crying to keep their subsidies so they won’t lose their farms may be shooting themselves in the foot. Up until 2002 the US subsidized Tobacco (try to figure that logic). Since they quit, amid decreasing tobacco product sales in the US, the farm land devoted to growing tobacco has INCREASE (not a typo, it went up, got bigger) by 20% (STOP, that is one additional new acre growing tobacco today for every five acres growing it in 2002, maybe more, because my statistics come from 2006) What? WHY? Simple Economics, my friend. AS the price decreased, suddenly American farmers became competitive in the international market where lighting up a Marlboro to kill yourself and your family is still considered to be ultra chic. And so the American farmers are suddenly, even at higher labor cost, able to sell to the world market at a profit. What kind of a profit? Well, the poor guy growing corn for Ethanol makes about \($250\) an acre; not bad, but the guys growing tobacco to share our cancer culture with the underprivileged of Asia and Africa is knocking back \($1,800 \) an acre WITHOUT the subsidy.
Surely there is an economics lesson in this somewhere. Can you imagine sales in the snack bar if Twinkies were a dollar and apples were twenty-five cents instead of the other way around? Would it change consumption patterns in our youth if Orange juice was cheap and sugar filled junk juice was expensive?
And perhaps way down at the bottom line there is a moral question involved in promoting the export of home grown tobacco on one hand and pledging to make our country smoke free on the other.
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