14 May 2007

What chance have we got?

Is there anything positive to say about agricultural subsidies? OK, they are largely capitalized into the value of farmland, making farmers work the land much harder, so exerting more environmental stress on land and water systems; to be sure, they are wasteful and regressive, because poor people spend a larger proportion of their incomes on food than the rich and it is the rich - agribusiness corporates, as well as wealthy landowners - who are their largest beneficiaries. Oh, and they help destroy the living of would-be exporters in the food-rich developing countries, so reducing the chances of those countries ever getting prosperous. But surely, a devil's advocate might say, they subsidise production and so make food cheaper? Not so, because much of the subsidies take the form of import barriers that raise the price of food.

Now Michael Pollan, writing in the New York Time Magazine, describes and explains the disastrous effects that farm subsidies in the US are having on that country's health. His entire article is well worth reading, but here are some excerpts:

[H]ow is it that today the people with the least amount of money to spend on food are the ones most likely to be overweight? ... [T]he rules of the food game in America are organized in such a way that if you are eating on a budget, the most rational economic strategy is to eat badly — and get fat. ... This perverse state of affairs is not, as you might think, the inevitable result of the free market. Compared with a bunch of carrots, a package of Twinkies, to take one iconic processed foodlike substance as an example, is a highly complicated, high-tech piece of manufacture, involving no fewer than 39 ingredients, many themselves elaborately manufactured, as well as the packaging and a hefty marketing budget. So how can the supermarket possibly sell a pair of these synthetic cream-filled pseudocakes for less than a bunch of roots?

For the answer, you need look no farther than the farm bill. This resolutely unglamorous and head-hurtingly complicated piece of legislation, which comes around roughly every five years and is about to do so again, sets the rules for the American food system — indeed, to a considerable extent, for the world's food system. Among other things, it determines which crops will be subsidized and which will not, and in the case of the carrot and the Twinkie, the farm bill as currently written offers a lot more support to the cake than to the root. ...

The result? A food system awash in added sugars (derived from corn) and added fats (derived mainly from soy), as well as dirt-cheap meat and milk (derived from both). By comparison, the farm bill does almost nothing to support farmers growing fresh produce. A result of these policy choices is on stark display in your supermarket, where the real price of fruits and vegetables between 1985 and 2000 increased by nearly 40 percent while the real price of soft drinks (aka liquid corn) declined by 23 percent. The reason the least healthful calories in the supermarket are the cheapest is that those are the ones the farm bill encourages farmers to grow.

The evidence against US farm policy is damning, overwhelming, and has been around for several decades. Yet still it, and the European Union's equivalent, persist. There has been some tinkering with both policies, but essentially they are unchanged. Our politicians cannot summon the will to challenge the entrenched interests they represent. Nor are the sums involved trivial. Estimates put the total support to OECD countries at around US$300 billion every year. It is the persistence of farm policy and other perverse subsidies, despite the weight of the accumulated evidence that they are without a single positive feature, that make it seem unlikely, to me, that our political system can ever convincingly address challenges such as climate change, which demand coherent, urgent and radical action.

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