Gestation Crates and Unfunded Mandates

The New York Times had a nice piece ​on the challenges faced by hog farmers converting from gestation crate systems to open pen systems.  For background, the Human Society of the United States (HSUS) has won successful ballot initiatives in states such as California, Florida, and elsewhere banning gestation crates, and in recent months several large restaurant chains have said they will (at some future date) no longer source pork from farms that use gestation crates.

I strongly disagree with the ​farmer in the piece who says,

What I don’t like is some big restaurant chain in Chicago that knows nothing about raising animals is telling us how to raise pigs.

It is the consumer, after all, who wins the day.  Nobody who makes a living selling what they produce to others has the final say so (at least as long as they want to stay in business).

Despite that quibble, the article does a nice job characterizing the trade-offs ​entailed in phasing out gestation crates and documenting the reasons why farmers adopted these systems in the first place (something we also tried to do in our book on the subject).

The end of the piece has a quote from my friend and collaborator, Glynn Tonsor at Kansas State University, ​who gets at the crux of the problem faced by many pork and egg producers.  The issue is that when consumers show up in the voting booth, they enthusiastically vote to ban practices such as gestation crates in pork production and battery cages in egg production.  Yet, when those same people visit the grocery store, they aren't willing to pay the extra amount for meat and eggs produced in alternative systems.  

In essence, we have consumers requiring farmers to adopt practices, which the consumers (according to their own behavior) aren't fully willing to pay for.  Farmers, then, face something very much like an unfunded mandate (a phrase I believe I heard Glynn first use in this context).  Unfunded mandates normally come about when the government requires the adoption of a costly practice or service without providing the funding to accomplish the outcome.  In a similar manner, consumers and restaurant chains are requiring farmers to adopt practices without being willing to pay for what they say they want.

​The ultimate result will be lower profits for hog farmers (well, at least US hog farmers).  It should be noted that hog farmers are already predicted to suffer record losses over the next year because of rising feed costs.  

While we may have to live with a less profitable hog sector, I at least implore voters to count the costs in the voting booth in the same way they do in the grocery store.​  Some hog farmers, who have transitioned away from gestation crates, have found niche markets of consumers who are willing to pay the higher prices.  Here's hoping the niche grows mainstream so that funding will follow the mandate.

What are Voters Willing to Pay for Food Labels?

Several months ago, I published a study in the journal Food Policy entitled The Political Ideology of Food.  The results, which suggested most people want more food regulation, were picked up in a variety of outlets such as the Food Navigator and Reason.com.

In responding to media inquiries about the study, I consistently told reporters something along the lines of the following: I’ve done lots of surveys like this over the years and one of the things I routinely find is that people appear much more favorable of regulation and labels in hypothetical surveys as compared to when real money is in the line.  In fact, I indicated at the end of the paper:

One important factor that our survey did not address is whether public support for
food and agricultural policies will remain high when people are made more aware of the specific costs of government action in this area. Many economists, including myself, have been critical of many of the policies this sample of consumers found so favorable, in part because it does not appear the benefits outweigh the costs. Only time will tell whether economic analysis on these matters will have any influence on the public’s ideologies with respect to food.

This insight is particularly relevant to the study we released earlier this week on Californian’s desire for mandatory labeling of genetically engineered foods.   In that study, we found a whopping 76.8% of likely voters said they intended to vote in favor of Prop 37 and the mandatory labeling policy.  Yet, when we followed up and asked people if they would still be in favor if food prices increased as a result of the policy, a different story emerged. 

Below is a graph of the percentage of the percentage of Californians projected to vote yes as the costs of the policy increase.  Citizen’s support for regulation is indeed price sensitive.  As the graph shows, at a food price increase of more than 11.9%, in fact, Prop 37 looses majority support.

Our research has been covered in a varied of blogs and media outlets (e.g.,here, here, and here).  And a few stories, such as the one over at Take Part, argue that the actual cost of Prop 37 will be far less than the 11.9% “break even” point.  As a result the author posits that:

But perhaps the most important detail—one that the survey didn't discuss and likely many voters don't know—is that the cost of food prices will be much smaller than 25 percent, much closer to a number which is almost negligible. 

Could be.  But it is it is important not to confuse cost with demand.  We were not measuring the costs of Prop 37.  We were measuring the price point at which people would be indifferent.  Those are two different things.  Though, the author is correct to say that if you analyze the demand for Prop 37 at the low price they assume (about 0.1%), then yes you’d still project strong support.  The costs have be highly debated and it isn’t particularly constructive to rehash those arguments here.

One thing I will point out in relation to the survey results is that economic research on how people respond to surveys suggests that the tend to over-estimate how much they are willing to pay for policies.  One widely cited review study, for example, showed that the amount people said they were willing to pay in hypothetical surveys was about three times what they were actually willing to pay when money was on the line.  Applying that insight to our analysis reveals that the “true” break-even price is probably something closer to 11.9%/3 = 3.97%. 

That said, we also have to remember that people don’t actually have to pay the price of the policies they support at the poll like they do when they’re shopping.  The result is that the costs of policies often get overlooked when people vote.

Moral Intuitions on Food

I’m about half-way through Jonathan Haidt’s new book, The Righteous Mind.  In the book, he makes the case that our moral judgments are mainly based on intuitive reactions.  We only make up logical reasons for our judgments later (if we can) to justify our initial intuitions.  Bailey Norwood and I made a similar case in terms of how we think about the rightness or wrongness of caging farm animals in chapter 6 of our recent book, Compassion by the Pound.  

What struck me as I read Haidt was his discussion on moral disagreement.  It is very had to change someone’s intuitions about what is right or wrong.  If we can’t even articulate the reasons why we think something is wrong, how can someone possibly make a compelling, reasoned counter-argument?  Haidt argues that trying to use reason to change someone’s moral intuition is a bit like trying to make a dog happy by grabbing its tail and wagging it. 

So, how is it that I intuitively feel so differently about various aspects of food production (e.g., biotechnology, irradiation, pesticides, herbicides, etc.) than others who are revolted by the same issues?  When I think about these issues, I am not appalled; I don’t feel any disgust.  But, I suspect I’m in the minority of Americans. 

I gave the Shepard lecture last night to a group of students and faculty at Kenyon College about the future of food.  Although we had a civil, productive discussion, it’s safe to say that many of the students in the room had different moral intuitions about these topics and I do.  Their moral intuitions are that many modern food technologies are self-evidently wrong (while other issues like local, organic, and natural are self-evidently right). 

How is it that our moral intuitions can be so different?  I grew up around “big ag.”  I’ve personally sprayed Monsanto’s Round-Up on hundreds of acres of cotton weeds.  I’ve personal castrated farm animals to limit aggression and off-tasting meat.  I’ve personally had to throw away thousands of pounds of salsa that grew mold because adequate levels of preservatives weren't added.  I’ve personally met and know people who work for Monsanto, Cargill, ADM, etc.  I grew up going to school with kids whose parents were immigrant farm laborers living at or below poverty. 

Now, that doesn’t necessarily make my intuitions about modern food production somehow objectively correct.  But, I at least can lay claim to the fact that they are based on actual life experiences and insights. 

That said, I suspect there were more than a few pre-civil war southerners whose life experiences led them to believe slavery was o.k.  On the flip side, there are many examples of people having faulty (at least what many of us would now say are faulty) moral intuitions on topics for which they had very little experience (e.g., the wrongness of eating pork).  Actual life experience with the issue in question may or may not correlate well with faulty moral intuitions.

I don’t know exactly where that leaves us except to say that Haidt argues that moral persuasion tends to work more on the social level than the cognitive.  According to Haidt, If you think I’m a nice guy, you’re more likely to give my moral intuitions a test-drive. 

Here’s hoping that, despite the facts and logical arguments given in my talk last night, I came across as a nice guy.

Whose Afraid of GMOs?

We humans are notoriously bad at judging relative risks.  We worry about some things that are very unlikely to happen (e.g., getting bit by a shark while visiting the beach), while ignoring other activities that are much riskier (e.g., driving to the beach).     ​

​This economic meme by Art Carden humorously points out such an inconsistency in the way we think about many food risks

Do Your Friends Know You Better Than You Know Yourself?

According to Science News, ​new findings from a longitudinal study following kids since 1976 revealed some surprising results.  Here is the basic study set up according to the authors

Over two years, Montreal students in grades 1, 4 and 7 completed peer evaluations of their classmates and rated them in terms of aggression, likeability and social withdrawal. The students also did self-evaluations

The outcome?​

We found the evaluations from the group of peers were much more closely associated with eventual adult outcomes than were their own personality perceptions from childhood.

​These findings tie nicely in with the research Bailey Norwood and I have conducted over the past several years (see here, here, or here), where we argue (and find) that the best way to predict what someone will do  in the grocery store is often not to ask them what they will do but rather to ask them what they think someone else will do.  

The human mind is skilled in the art of deception (including self deception).  This research reminds me of a quote by Richard Feynman:​

The first principle is that you must not fool yourself—and you are the easiest person to fool.