Food Insecurity and The Politics of Rising Food Prices

Record high temperatures in the Midwest this summer have been met with near-record high prices for corn, soybeans, wheat, and other commodities.  Thanks to federal disaster payments and crop insurance, many corn and soybean farmers will withstand the drought with finances relatively unscathed.  Many livestock producers won’t be so lucky.  Neither will many food consumers.

Although most analysts anticipate the drought will increase future retail food prices only around four to five percent, the hike comes on the back of a 2.3 percent rise in the food component of the consumer price index over the past year.  Add that to the impacts of the recession and the result is that 14.9 percent of US households (more than 50 million people) are food insecure according to the USDA's latest report.  The prevalence of food insecurity is about 33 percent higher than it was before the recession.     

The rise in food insecurity has occurred even as the rolls of the federal food stamp program have swelled.  A record number of Americans - one in seven of us - were on food stamps last year, causing critics to name Obama the “food stamp president.”  Undaunted by the label, his administration has begun running radio ads encouraging further enrollment.  And, his administration recently announced efforts to reverse the Clinton-era welfare reforms by removing work requirements for some people soliciting welfare money.  

Obama’s election-year strategies to address the issue heighten class divisiveness: expanding social entitlements for the poor while raising taxes on the rich.  Although the strategy might be successful in buying votes from those so downtrodden that a helping hand is needed to put food on the table, the longer-term impacts of this administration’s policies are as much the cause of the food price problems as they are a help. 

Obama rode a tide of hope-and-change into office that captivated a core group of elite foodies who had been preaching messages like “pay more, eat less” for years.  While more Americans have had a harder time finding enough food to eat, the White House planted a back-yard garden and began giving preferential treatment to local-food purchases in federal contracts.  Despite the tastiness of local foods, they certainly aren’t cheaper; and anyone who has been to a parched Midwestern farmers’ market this summer can attest to why consumers need access to non-local fare (one of my colleagues claims to be on pace for growing a two hundred-dollar watermelon this summer).  But, local food policies only scratch the surface.  The Obama administration has sought to keep farmer’s kids from working on the family farm, fine farmers for kicking up too much dust, require beef processors justify quality-adjusted pricing strategies, and require schools to plate more veggies.  Whatever might be said about the benefits of any of these policies, they all serve to increase the prices consumers pay for food.  And that’s just the tip of the iceberg. 

Three months ago, I gave a talk to a planning workshop sponsored by the administration’s Centers for Disease Control and hosted by the Institute of Medicine of the National Academies entitled “Exploring the True Costs of Food.”  The underlying premise is that food in this country is under-priced, and that taxes, subsidies, restrictions, and bans must be engineered to get the prices of food up to the “right” level.  Thus, what the administration giveth in terms of food stamps and unemployment insurance, they taketh away in terms of higher food prices from onerous food regulation.

There is a long term solution to food insecurity that has been pursued for decades.  But, it is no longer politically popular with today’s fashionable foodies who spurn food technology and promote a return to nature.  Yet, we seem to have forgotten that “nature” didn’t give us domesticated livestock, abundant, readily edible seeds, microwavable rice, or pre-washed baby carrots.  The food we enjoy today is a result of man’s triumph over nature’s indifference to us.  The solution to today’s food price problem is what it has been for hundreds of years; the application of human creativity, innovation, and research to food and agriculture.  Previous public spending on agricultural research has more than paid itself, with current estimates indicating the benefits resulting from lower food prices exceeding the costs by a factor of thirty two to one.  Private research has been similarly effective.  Yet, spending on agricultural research has stagnated.  We have adopted a food culture that, by rejecting food biotechnology, nanotechnology, cloning, and pesticides, is on path to prove Malthus right. 

If Obama is really concerned about the economic downtrodden – and not just getting their votes in November – he’ll start thinking less about how to get others to grow their own gardens and more about how to make drought tolerant wheat.