A few days ago, I took on the claim that farm subsidies are making us fat (the answer is most likely "no"). However, there are other government programs that potentially affect food prices - what about those programs? Have they contributed to the rise in obesity?
A new paper in by Julian Alston, Joanna MacEwan, and Abigail Okrent in Applied Economic Perspectives and Policy asks whether funding for agricultural research and development (R&D) can explain the rise in obesity. The chain of logic goes like this: there is extensive evidence that funding for agricultural research increases productivity; higher productivity means getting more food using fewer resources; more food means lower food prices; more food at lower prices means more food intake; more food intake leads to obesity. Ergo, government funding for agricultural research leads to obesity.
So what did the authors find? They found that agricultural R&D spending probably did have a modest effect on obesity rates, but that R&D also resulted in enormous benefits to consumers and producers. The authors write:
“Our analysis of historical counterfactuals suggests that it would have been very expensive to have foregone past R&D-induced productivity growth, even if in doing so we were able to reduce obesity and related healthcare expenditures.”
And, if we had undone the R&D efforts that led to the food price changes since the 1980s:
“This would be a costly reversion; it would cost consumers $65.01 billion, of which only $4.72 billion would be offset by savings in public healthcare costs, to reduce average U.S. adult body weight by 4.85 lbs. This translates to a cost of $55.6 per pound after the savings in public healthcare costs are taken into account.”
In summary:
“The implication is that agricultural R&D policy is unlikely to be an effective policy instrument for reducing obesity, both because the effects are small and because it takes a very long time, measured in decades, for changes in research spending to have their main effects on commodity prices. Moreover, as our results and others have shown, the opportunity costs of reducing agricultural research spending in the hope of eventually reducing the social costs of obesity would be very high because agricultural research yields a very large social payoff.”
Having now discussed the effects of farm subsidies and agricultural research, what about programs like the government-sanctioned check-off programs? That was the topic of a session at the most recent AAEA meetings in Boston. Parke Wilde from Tufts and Harry Kaiser from Cornell debated the role of check-off programs and their role in affecting public health and nutrition. I was unfortunately unable to attend the session, but Parke offered a preview of it on his blog. I hope to see some research on this topic in the near future.