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Food Stamp Restrictions

This article in the USA Today discusses efforts to better track the spending of people who receive SNAP benefits (aka "food stamps").  It's not necessarily a bad idea, though I wonder: what is the ultimate purpose of the tracking?  

I would venture to guess that such tracking will reveal that SNAP recipients do not eat as healthily as some would like.  Indeed, the USA Today article quotes Michele Simon as saying

“As currently designed, SNAP is not promoting public health”

My suspicion is that the motivation for tracking SNAP purchases is to provide justification for adding new restrictions on SNAP benefits.  It is an idea that is popular with many on the left and the right.  In a poll I conducted last year, almost 70% of US citizens support a policy that would "prohibit purchases of certain food, like sugared soda, with food stamp benefits." That same survey showed that over 80% of respondents favored a policy that would "provide funding so that food stamps can be used to purchase foods at farmers markets."  There have been real world efforts to subsidize fruit and vegetable purchases when using SNAP (see this study for one analysis of the efficacy of such a proposal). 

So, what we're seeing is a shift from seeing SNAP as a tool to help with food insecurity (or hunger) to one that attempts to promote certain dietary patterns, presumably to promote public health.  Ironically, this comes about as news stories are revealing a doubling in the number of children receiving food assistance in recent years, and research showing that the prevalence of food insecurity in the US remains high.

I have mixed feelings about the efforts to scrutinize SNAP spending.  On the one hand, it is a public program funded with tax dollars, and it seems taxpayers should expect some form of accountability.  On the other hand, we don't know a whole lot about the costs and benefits of SNAP restrictions or whether there will be a trade off between hunger-fighting and healthy-promoting goals.  

One of the things that bugs me is the lack of recognition that  proposed SNAP restrictions are likely to be totally ineffectual.  Take, for example, a policy that would ban using SNAP dollars to purchase soda.  That policy might make us feel good, but it isn't likely to have any effect on the amount of soda people drink.  Why?  Because people can re-allocate their budget to achieve the same bundle of food regardless of whether the restriction is in place.

An example might help illustrate.  Suppose you receive $130 in SNAP benefits each month (this is the about average monthly amount received per recipient person in the US), and you spend another $200 from your own pocket on food each month (for a total of $130 + $200 = $320).  Now, let's suppose you take one big shopping trip  to the grocery store each month, and your cart is piled up with food (including a case of Coke costing $10).  You've put just enough food in the cart to consume your entire budget of $320.  Now, you know that your SNAP benefits can't cover the entire amount.  So, what do you do?  You pull out that little plastic barrier, put it on the convener belt, and put $130 on one side (to be paid for with the SNAP benefits on the EBT card) and put $200 on the other side (to be paid for with your cash).  

Now, let's suppose we have a ban on buying soda with SNAP.  What happens?  You simply pick up the $10 case of Coke that was on the SNAP side of the barrier and move it to the other side of the plastic barrier.  But, now you've got an extra $10 you can spend in SNAP benefits (and now you're also short $10 cash).  All you've got to do is find another item on the cash side of the barrier worth $10, pick it up and move to the SNAP side, and your done.  The end result is the same regardless of whether the SNAP restriction is in place or not: you spend $320 and drink Coke.  The only difference is where the Coke is put on the conveyor belt.  This is an insight that's been known since at least the 1940s (see this paper by Herman Southworth), and yet it is one I rarely see mentioned discussion about attempts to improve health by restricting SNAP purchases.

What about policies that would subsidize fruit and vegetable consumption?  First, we should recognize that this policy is unlikely to reduce prevalence of obesity.  Second, note that this policy is akin to increasing funding for SNAP, but in a restrictive way.  We're giving people more money, but with strings attached.  We're being paternalistic, failing to respect how people want to spend these dollars.  It reminds me of this article from the Onion  with the heading, "Woman a leading authority on what shouldn't be in poor people's grocery carts."  

 

More on GMO wheat

A couple weeks ago, the St. Louis Post-Dispatch ran a story on GMO wheat that's been picked up by several other news outlets.

This is a controversial topic, even among some farm groups, and it is one I've touched on several times in the past (e.g., see here or here).

In the most recent article, I'm identified as a "a supporter of GMO wheat."  I can understand why the reporter would write that, but I think it is better to say that I'm a supporter of reasonable regulation and producer choice.  

It wouldn't bother me if a seed company or University put out a GMO wheat variety that didn't pass the market test (that no one wanted to buy).  But, what is troubling is the position that wheat producers cannot have access to a perfectly safe technology while canola, soy, and corn producers can.  Yes, there are some complicated trade issues involved, and there are fears about market power, but I see little reason these issues can't be sorted out in the marketplace, as it has with these other commodities.

By "reasonable regulation", what I mean is that we've created this strange climate around GMOs that both make the regulatory costs of introducing a new variety quite high and raise the hackles of some of our trading partners.  But, I'm not sure it's a very reasonable climate.  For example, I'll note that some of my excellent colleagues at Oklahoma State have released a new wheat variety that is herbicide resistant but that is not, technically, a GMO.  However, as would be the case with a GMO, producers are not allowed to save and replant the seed because the variety is protected by a patent.  In short, the wheat breeders have delivered almost everything one would expect in a GMO, except it isn't technically a GMO.  

What that tells me is that it's often silly to focus on the tool (i.e., whether a certain genetic technique was used) rather than the outcome.  But, as the example also shows, when artificial barriers to innovation and trade are introduced, entrepreneurs will find a way around it if the demand is there.  

P.S. On the topic of wheat genetics, note the recent article forthcoming in the American Journal of Agricultural Economics by Jessie Tack, Andy Barkley, and Lanier Nalley.  They show that yield potentials have been increasing steadily over time, but the gap between potential yield and actual farm yield has also been increasing over time.  They attribute the gap to on-farm management/production decisions.

 

Taleb on GMOs

Russ Roberts, the host of one of my favorite podcats, Econ Talk, recently had Nassim Taleb on to talk about Taleb's recent paper urging the use of the precautionary principle with regard to GMOs. I've previously commented on Taleb's paper but thought I'd add some thoughts about this recent interview.

First, Taleb's argument.  He argues that GMOs are risky and that the risks are not well understood. The risk are of the sort, he argues, that could (eventually) lead to catastrophic outcomes - i.e., they are not localized risks.  Moreover, he argues, the risks are asymmetric: the possible bad outcomes are much worse than the possible good.  He argues that with each additional new trait, there is only a small perceived increase in risk,  but that eventually - because of the "fat tails" of the risk distribution - it is inevitable that a really bad outcome will occur.  As a result, he argues, we shouldn't use GMOs  It's the cautious, wise thing to do in his assessment.

Taleb is obviously a smart guy and he makes some valid points.  In particular, I think one of the key take-aways for those of us who see value in using biotechnology - is that we want to make sure that risks are of the sort that they don't result in epidemics; that is, how can we diversify or put a stop-gap on our risk exposure?

Despite these insights, I think there are a number of challenges with Taleb's take on this topic.  First, if you listen to the interview Taleb takes great lengths to make an appeal to authority.  He establishes a hierarchy with geneticits/biologists at the bottom, statisticians above them, and then risk experts at the top.  In his assessment, the biologist is not in a position to judge risks or causal claims, it is the statistician who knows how to do this (forget the fact not all statisticians agree about the burden of proof - the whole frequentist vs. Bayesian approach is the most obvious example), and then the risk theorist is at the top (Taleb himself being the risk expert).  As such, he essentially tries to inoculate himself from any criticism, saying that a biologist can't criticize the risk theorist (Russ Roberts calls him out on this at one point, but Taleb quickly dismissed the point).  

To make his point, Taleb invokes the carpenter fallacy.  The carpenter makes the roulette wheel, but if we wanted to know our chances of hitting on on the number 22 after 150 plays, would we ask the carpenter?  No, according to Taleb, we'd ask the probability expert.  But, there is a huge assumption being made here: that the probability expert knows how the wheel is made - how many possible numbers there are, whether the wheel is balanced, whether the slots in the wheel are of equal size, etc., etc.  In short, a good probability theorist needs to know everything the carpenter knows and more.

Unfortunately, I don't see much evidence that Taleb has spent much time trying to understand GMOs or modern agriculture, and as such it is hard to take his probability judgments in this domain seriously.  For example, one of his examples is that the Irish potato famine, which he argues was caused by a lack genetic diversity.  However, there are good reasons to believe that British politics were the key contributing factor to the famine.  Moreover, what he doesn't seem to get with regard to modern GMOs is that a GMO isn't a variety.  A particular trait - say herbicide resistance - is introduced into many, many varieties in different parts of the country and the world. Moreover, not all herbicide-resistant crops are resistant to the same herbicide.        

Going further, herbicide residence can be "naturally" bred into plants.  There are rice and wheat varieties on the market that are not GMOs but that are herbicide resistant.   Why are these not risky but the GMOs are?  My original comment about Taleb's paper is that he didn't focus on marginal risks; he treats GMOs as a separate class without looking at how plant breeding is done in real-life agriculture: is he also against hybrids? Mutagenesis? Cisgenics? Marker Assisted Breeding?  These all have risks that are on par with GMOs, so I'm curious why only the focus on one particular technique?

As I've sad many times, a GMO isn't a single thing - it is many, many things, each with different benefits and risks.  A hammer can be used to bash heads or build skyscrapers.  It is just a tool.  Same with biotechnology.  What I would prefer to see from Taleb and others is a careful discussion of a particular trait they find worrying along with a careful articulation of why that particular trait is likely to lead to a particular global harm - and what it is about the tool of biotechnology that is particularly worrisome for that trait vs. other breeding techniques?  If everyone was planting the same variety of the same herbicide resistant crop (and we only had one herbicide that we knew worked), I'd be concerned, but that not what's happening.

As it is, we simply have Taleb making an appeal authority and to unknowability.  We can't know what bad things might happen, so Taleb says we should be cautious.  But no evidence of risk is not evidence of an eventual black swan.  Indeed, it seems to me it is a recipe for stagnation.  And it isn't at all clear to me the downside risks are always greater than the upside.  When penicillin was first discovered, the risks were unknown but the benefits were (ultimately) immense.  A precautionary approach might have shelved antibiotics, but we took the chance and with great effect to our life expectancy.  Life is full of risk.  The answer isn't to hole ourselves up in the closet, but rather to think about ways of taking insurance against possible risks while venturing out into the world.

I'll conclude with one last thought.  Taleb makes reference to the Hayek bottom-up vs. top-down planning.  He says GMOs are the top-down sort.  I'm not so sure.  Real life farmers and people have to be willing to buy varieties that have the GMO traits.  No one is forcing that outcome.  It is true that competition will limit - to some extent - the diversity of plants and genetics that are observed because some plants aren't tasty or aren't high enough yielding.  But most plant breeders keep all kinds of "ancient" varieties precisely for the purpose of trying to breed in new traits to today's varieties (and folks working on synthetic biology are creating their own, new strands of DNA, creating new diversity).  Geography also increases diversity.  Iowa grows a lot of corn, Oklahoma doesn't because it isn't our comparative advantage.  I see little reason to believe that a single GMO variety will perform well in all locations.  So, yes individual companies are planning and creating new varieties, but it is all our local knowledge of what works in our places and conditions that determine whether particular genetics offered by a particular company are used.  We do not have a seed czar or a DNA czar.