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Agricultural and Food Controversies: What Everyone Needs to Know

My good friend and frequent co-author, Bailey Norwood, has a book coming out with Oxford University Press entitled Agricultural and Food Controversies.  

He and his co-authors provide a badly needed, balanced, science-based perspective on some of the most contentious food and agricultural controversies of the day.  I read early drafts of several of the chapters, and I highly recommend it.

The bad news is that you'll have to wait till December until it officially comes out.

The good news is that you can already pre-order the book on Amazon.

By F. Bailey Norwood, Michelle S. Calvo-Lorenzo, Sarah Lancaster, Pascal A. Oltenacu
Buy on Amazon

Rising food prices and social unrest

Worldwide, food prices have been rising over the past decade.  Here, for example, is the UN FAO food price index.

In real terms, the world food price index is higher today than it has been in 40 years.

Enter this new paper by Marc Bellemare just published in the American Journal of Agricultural Economics.  He finds:

“for the period 1990–2011, food price increases have led to increases in social unrest, whereas food price volatility has not been associated with increases in social unrest.”

As is typical of Marc's work, this is a careful analysis of the issue.  He takes issues like endogeneity seriously (do higher food prices cause social unrest or does social unrest cause higher food prices or does some third factor case both?) and he considers the sensitivity of his results to the data he uses and model specification.  

A couple excerpts from the conclusions:

“Do food prices cause social unrest? The results in this article indicate that the answer to this question is a qualified “yes.” While rising food prices appear to cause food riots, food price volatility is at best negatively associated with and at worst unrelated to social unrest. These findings go against much of the prevailing rhetoric surrounding food prices. Indeed, whereas many in the media and among policy makers were quick to blame food price volatility for the food riots of 2008 and of 2010–2011, the empirical results in this article indicate that rising food price levels are to blame and that increases in food price volatility may actually decrease the number of food riots. ”

and

“the objective of keeping prices low would be best attained by policies aimed at increasing the supply of food where it will be the most helpful, whether this means investing in agricultural research aimed at increasing agricultural yields (Dorward et al. 2004), encouraging urban or peri-urban agriculture (Maxwell 1995), liberalizing the international trade of agricultural commodities, increasing access to and the use of biotechnology in developing countries (Paarlberg 2009), eliminating farm subsidies in industrialized countries, and so on.”

Effects of fat taxes and thin subsidies on the poor

I've been working on a paper with some French colleagues (Laurent Mueller and Bernard Ruffieux) using data from a food purchasing experiment in Grenoble and Lyon France looking at the effects of  "fat taxes" and "thin subsidies" on poorer vs. richer households.  The paper is still in review, so I won't yet go into the details of the results, but I can say that they closely align with the results of this new paper by Richard Tiffin and Matthew Salois that was just published in the European Review of Agricultural Economics.

They write that their:

“results reinforce the finding that a fiscal food policy based on a tax on saturated fats and a subsidy of fruits and vegetables is socially regressive”

 

and

“not only are the poorest households more negatively effected by the policy, but that even a subsidy is regressive because of the distribution of consumption of fruits and vegetables”

As they discuss, and we are finding in our work, such effects can occur through a number of channels.  Take a subsidy on fruits and veggies.  If richer households are already eating more fruits and veggies, who do you think receives the largest gains from the subsidy?  Fat taxes are regressive because the poor spend a larger share of their income on food (so taxes take a proportionally bigger chunk of their income) than the rich, but also because they are often eating more of the foods that will be taxed and because they may be less responsive to such price changes.  

The social and distributional consequences of these sorts of price policies are seldom discussed with any seriousness by those who promote the policies.   

The Food Industry as a Stock Villian

An interesting interview with Trevor Butterworth on whether food science gets the press it deserves.

Butterworth explains how the food industry has become a "black box" which holds all sorts of societal fears.  He argues that the food industry has become a "stock villain" that is "enemy to be attacked but rarely understood."

You can watch the video here.