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In Food We (Dis)Trust

This blog post by Chef Michael Formichella describes one of the key outcomes he learned from some focus groups conducted among frequent consumers of grass-fed beef.  He learned that (emphasis his):

There were several notable comments passed by all three groups that I wanted to expound upon. It revolves around trust.

He hit the nail on the head with this one.  Although it is rarely discussed in this way, our modern “food wars” almost all disseminate over the issue of trust.  People (sometimes for good reason) distrust agribusinesses, and as a consequence, the technologies they develop.  This leads to calls for things like organic food – which people then distrust because it turns out that organics are not all they are often touted to be.  Much of the local food movement can, in my opinion, be explained by an effort by some to interact more closely with those they believe are more trustworthy. 

What bothers me about the folks I’ve called the food police or the food elite is that they have fostered, and even encouraged, this atmosphere of distrust to promote their own books, restaurants, and political agendas.  I do not deny that some of the distrust of modern production agriculture is deserved, but as someone who has grown up around “large” farmers and people working in agribusinesses, the caricature that is painted of them cannot withstand close scrutiny.  I strongly suspect that the guys running 5,000 acre farms are no more or less “trustworthy” than the muckraking journalists who vilify them.      

Economists don’t much talk about it, but trust is perhaps the linchpin in the engine of economic growth.  It allows specialization and development of comparative advantage.  It facilitates trade.  It creates environments in which there is some reasonable expectation that success from investments in research and technology will be rewarded.  (There is a really nice podcast between Russ Roberts and David Rose on Econ Talk on this and related issues if you want more).     

So, when I hear and read people implicitly saying “don’t trust any farmer but your local farmer” or “don’t trust anything developed by Monsanto or Cargill or ADM” or “don’t trust the research from Land Grant Universities” or “don’t trust supermarkets,” I take pause. 

You’re setting yourself up for a pretty meager existence if the only person you can trust is yourself.  Locavores are willing to extend that trust to the few people who happen to live in close proximity to them.  But, I’m hoping for more because the more people you can trust, the better your life is going to be.  I happen to believe in the power of firms trying to maintain a reputation, the power of consumers acting with their wallets and feet, the threat of litigation, and sometimes plain self interest tempered by market forces to help foster a climate of trustworthiness.  Clearly, not everyone agrees.  But, what I’d like to see is less inward-looking thinking (i.e., trust only your neighbor) and more thinking on how production agriculture can appear to be (and actually become) more trustworthy.

           

Peak Farmland

There was an interesting article in the Wall Street Journal last week describing some research on land use and agricultural productivity ( the original research is posted here).  

Here are some snippets from the WSJ article:

Globally, the production of a given quantity of crop requires 65% less land than it did in 1961, thanks to fertilizers, tractors, pesticides, better varieties and other factors. Even corrected for different kinds of crops, the acreage required is falling at 2% a year.

and

Yet the amount of farmland in the world was still rising until recently. The reason is that increased farm productivity has been matched by rising demand for food, driven by population growth and swelling affluence. But the effects of these trends are waning.

and

Even with these cautious assumptions, the researchers find that over the next 50 years people are likely to release from farming a land area "1½ times the size of Egypt, 2½ times the size of France, or 10 Iowas, and possibly multiples of this amount."

in conclusion:

Predictions of peak oil have repeatedly proved wrong. But the factors that made them wrong—productivity and technology—are essentially the ones that make a prediction of peak farmland likely to be right.

I agree - so long as we don't demonize or overly regulate the use of technologies that lead to increased productivity in food.  I have faith in our innovative abilities, but I worry about the messages being sent by the foodie cultural elites.   

Does the Food Stamp Program Subsidize Obesity?

At his NYT blog, Mark Bittman says that beneficiaries of SNAP (otherwise known as food stamps) shouldn't be allowed to pay for sodas.  Here is Bittman:

What’s to be done? How to improve the quality of calories purchased by SNAP recipients? The answer is easy: Make sure that SNAP dollars are spent on nutritious food.
This could happen in two ways: first, remove the subsidy for sugar-sweetened beverages, since no one without a share in the profits can argue that the substance plays a constructive role in any diet. . . . 
Simultaneously, make it easier to buy real food; several cities, including New York, have programs that double the value of food stamps when used for purchases at farmers markets. The next step is to similarly increase the spending power of food stamps when they’re used to buy fruits, vegetables, legumes and whole grains, not just in farmers markets but in supermarkets – indeed, everywhere people buy food.

On one level, I'm sympathetic to Bittman's argument.  Why should my tax dollars be used to subsidize bad behavior?  But, if we are going to accept that argument, where do we stop?  As a professor, I indirectly get a paycheck from the State of Oklahoma.  What is to stop someone like Bittman one day proposing that the federal or state government dictating where and how I can spend the portion of my paycheck that comes from taxpayers?     

Aside from this "slippery slope" argument, it is useful to consider the broader debate in economics on whether foods stamps, in general, cause obesity.  Unless a person (before receiving food stamps) is constrained in the food they buy, a standard economic model suggests that food stamps simply act as an income transfer.  Stated differently, under the aforementioned situation, a person shouldn't treat food stamps any differently than a monthly cash gift.  There are lots of empirical papers studying whether this true and the evidence is a bit mixed but I think its safe to say that a big part of the effect of food stamps (if not the total effect) is simply an income effect.  

This is useful to consider this perspective because - if we are going to give food stamps out of some feeling of charity or benevolence - we have to realize that restricting their use may not have the intended effect.  Money is fungible.  If you can't use food stamps to buy sodas, you'll use them to buy more of something else - freeing up money to buy soda.  

I also think it isn't particularly helpful to claim that food stamps are "subsidizing" obesity simply because sodas can be bought directly with food-stamp dollars.  Food stamp recipients are choosing to use their dollars (and food stamp coupons/debit cards) to buy sodas.  Food stamps are only "subsidizing" obesity to the extent that extra income is subsidizing obesity.  It isn't food stamps per se that are causing soda consumption - it is people's preferences for sodas that are leading to soda consumption.