Blog

Big Goverment and Small Potatoes

That was the tentative title of a chapter in my forthcoming book, Food Police, that ultimately wound up on the cutting room floor.  I spent a good portion of the book, and have many posts here on the blog, where I defend Big Food and Big Ag.  That's not because they are blameless or perfect, but because they are so often mischaracterized and are the scapegoats for many of societies perceived evils.  

But, it would be a mistake to think that food freedoms are threatened only by government regulation of Big Food and Ag.  In fact, one can often see the plain injustice at work when you look at the impacts of intrusive government regulations (and the crony capitalism sometimes promulgated by Big Food) on small potatoes - food trucks, farmers markets, and small operators just trying to make a buck.  I chose not to focus heavily on this in the book because they represent such a small part of our overall food economy, but I'm glad to see some attention being devoted to the issue.  

The American Enterprise Institute is hosting a conference title "Big government and big food vs. food trucks, foodies, and farmers markets."  Here's their promo:

If you like your food local, organic, or from a truck, government regulation might be your biggest obstacle. American restaurants lobby to choke off food trucks, and federal regulation of food safety leads to more consolidation in the industry. Moreover, farmers markets struggle to survive under the heavy hand of government.
What if food safety regulation is not about limiting the germs in our dinner, but is rather about limiting competition in America’s food industry? What if federal and local rules actually protect incumbent businesses instead of consumers?

​If you want to whet your appetite, I highly recommend this article from a few weeks back, entitled, Tea Party Libertarians and Small Organic Farmers Make Strange Political Bedfellows.  Here are some spinets:  

Laura Bledsoe didn't set out to join a political movement, she merely wanted to serve what she considered a sustainable meal.
In October 2011 she and her husband Monte decided they wanted to host what they called a "farm to fork" event in their home. They own a small farm 50 miles outside of Las Vegas.

then:​

Trouble began two days before the event was to take place. They received a call from the Southern Nevada Health District Office, who wanted to know if the farmers had secured a health permit for the event. "We didn't know we needed to," Laura says.

Then a health inspector came:​

The health inspector raised several concerns, but chief among them was the meat the Bledsoes were preparing to serve. Because the event was advertised as a "zero mile footprint," the meat hadn't been sent through a USDA processing plant, as is required for any meat purchased at a grocery store or restaurant, so the inspector deemed it illegal to serve.

The article tells several stories of a similar nature - check it out.​

Food Price Changes

I happened to run across this document put out by the USDA Economic Research Service about a month ago (see the associated spreadsheet). I occasionally get calls from reporters asking about changes in food prices, so I thought I'd put the data in a couple graphs for easy digestion.  

First, overall food prices continued to rise in 2012 (at a rate of 2.3% away from home and 2.5% at home).  However, the rate of increase in prices of food at home has fallen from 4.8% in 2011 to 2.5% in 2012, and exactly the opposite has happened for food away from home (going from 1.3% in 2011 to 2.4% in 2012).  

foodprice1.jpg

What about individual food categories at home?  The following shows the percent change price of various food types from 2011 to 2012.  Beef and veal, fats and oils, and poultry all experienced rapid price increases (all over 5%).  Interestingly, the price of fresh fruits only rose 1% and prices of fresh vegetables fell 5.1%.  

foodprice2.jpg

Our Research on Menu Labeling

For the past couple years, I've been working with one of my former graduate students, Brenna Ellison at the University of Illinois, on some papers related to effects of calorie labels on menus (for those who may not be aware, "Obamacare" mandated that chain restaurants include such menu labels but the FDA has yet to release the final rules and implementation date).  

The first part of that research was finally published last week in the International Journal of Behavioral Nutrition and Physical Activity, where we report on a smaller sample from the larger study which includes the group of people Brenna interviewed after they ordered.  The results have been picked up by a couple news outlets, including this one from Reuters: 

Showing diners how many calories are in restaurant food items may influence how much they eat - especially among the least health-conscious people, a new study suggests.

That's true - but only partially true.  We find that the numeric labels mandated by "Obamacare" do not have a statistically significant effect on the number of calories people order.  The labels that we find to be (somewhat) effective are stop-light labels, in which we put a red dot next to the high calorie foods, a yellow dot next to the medium calorie foods, and a green dot next to the low-calorie foods.  As the story suggests, the labels are less influential among people who we rate (based on their survey answers) as health conscious.  The result isn't terribly surprising - people who are health conscious are probably already familiar with the caloric content of the foods they eat, and as such, adding labels are unlikely to provide new information.  Still, we'd want to know something about the cost of the label to know whether the policy was a net-plus (this is an issue we take up in our other papers still in the works).    

The result I found most interesting from the whole study was only discussed in the conclusions (and was missed all together in the news story) is the following:

Interestingly, despite the calorie+traffic light label’s effectiveness at reducing calories ordered, it was not the labeling format of choice. When asked which of the three labeling formats was preferred, only 27.5% of respondents said they wanted to see the calorie+traffic light label on their menus. Surprisingly, 42% preferred the calorie-only label which had virtually no influence on ordering behavior. These responses imply diners may want more information on their menus (the number of calories), yet diners do not want to be told what they should or should not consume (i.e., green = good, red = bad).

Monsanto at the Supreme Court

According to NPR:

This week, the Supreme Court will take up a classic David-and-Goliath case. On one side, there's a 75-year-old farmer in Indiana named Vernon Hugh Bowman; on the other, the agribusiness giant Monsanto.
The farmer is fighting the long reach of Monsanto's patents on seeds — but he's up against more than just Monsanto. The biotech and computer software industries are taking Monsanto's side.

Here is what's at the issue according to the report:

Starting in 1999, he [Bowman] bought some ordinary soybeans from a small grain elevator where local farmers drop off their harvest. "They made sure they didn't sell it as seed. Their ticket said, 'Outbound grain," says Bowman.
He knew that these beans probably had Monsanto's Roundup Ready gene in them, because that's mainly what farmers plant these days. But Bowman didn't think Monsanto controlled these soybeans anymore, and in any case, he was getting a motley collection of different varieties, hardly a threat to Monsanto's seed business. "I couldn't imagine that they'd give a rat's behind," he snorts.
Bowman told his neighbors what he was doing. It turned out that Monsanto did, in fact, care.
"He wanted to use our technology without paying for it," says David Snively, Monsanto's general counsel.

I don't know if what Bowman did was legal or not.  However, I have previously commented that many people do not seem to grasp the economics of the situation.  Here's what I said back in October at the case:

What do you think will happen to the price of the first generation seed if farmers are able to freely replant the progeny?  . . . if the Supreme Court rules that Monsanto does NOT own the progeny, then the value of the seed to farmers rises since they can re-use the seed.  . . .  For the indifference principle to hold (i.e., for equilibrium to be restored), the price must rise.  Monsanto will charge more for it's initial offerings if farmers can freely replant.      

I also subsequently posted on several myths that seem to be circulating in relation to this case.

The implications of the case could be far reaching.  For example, when I sell a book, I get royalties when a new copy is sold.  But, when it is re-sold as used I no longer make any money (but it seems that perhaps I could under the logic used by Monsanto).  What about music?  Back when I was in college, Napster was a big deal, but was subsequently shut down because it was apparently illegal to share songs in this fashion.  It seems that some forms of music (electronic) are treated like Monsanto seed but other forms (old vinyl records) are not.  Picasso made money the first time he sold a painting but not when the buyer re-sold it.  But, what if he had copyrighted the image? Or patented his painting process?

The underlying issue here is when and how long do innovators hold the rights to their creations?  And, are these rights maintained even after the original invention is re-sold?  

Assorted Links