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New Report: Taxpayers Still Backing Contradictory Federal Food Policy

by Pete Sepp / /

Free-marketers are well aware of “nanny state” encroachment on consumers’ food choices; many of them probably celebrated when a second court in New York recently held against Mayor Michael Bloomberg’s ban on larger-sized “sugary” drinks (even though New York City keeps contesting the rulings). What they may not realize is that nannies, especially government ones, often have an arbitrary way of exercising discipline.

We were reminded of this “do as I say, not as I do” phenomenon again thanks to an intriguing new report from the Union of Concerned Scientists on how U.S. agricultural policy is working at cross-purposes – often to the detriment of taxpayers and the economy. Among the findings of the study:

  • Federal farm subsidies are “lavished on crops that become the ingredients for highly processed foods,” to the detriment of domestic fruit and vegetable producers. This negatively influences the eating habits of Americans;
  • If the American people boosted their consumption of fruits and vegetables to levels most nutritionists recommend, “more than 127,000 deaths per year from cardiovascular disease could be prevented and $17 billion in annual national medical costs could be saved;” and
  • Applying a calculation called “present value of lives saved” to these numbers above would yield an economic impact of $11 trillion.

Reality-check time – NTU and UCS do not see eye-to-eye on every issue, though we have joined forces on causes such as protections for government whistleblowers and wasteful nuclear weapons spending. Nor will conservatives necessarily support every conclusion in the latest UCS report, which calls for steps such as grants to develop infrastructure for farmers’ markets or putting more money into federal research.

Still, many of the report’s assertions are quite valid, and should appeal to all taxpayers. Using respected sources, UCS calculates that in 2012, Medicare and Medicaid likely spent $172 billion total to treat cardiovascular diseases. If even a fraction of these costs could be preventable, the implications for the future of these programs would not be trifling. Combined with more aggressive action on improper payments, the savings could buy some additional vitally-needed time while we undertake the task of completely restructuring entitlements (through premium support, personal accounts, and other pro-taxpayer reforms). In any case, repealing or dramatically restricting current farm subsidies could more than offset UCS’s recommendations for new federal initiatives, thereby providing much-needed deficit reduction.

Another UCS conclusion worth considering is that USDA’s insurance program “is oriented toward farmers who grow a handful of subsidized commodity crops, including corn, soybeans, and cotton.” The adverse result is that farmers are disincentivized to diversify their crops into fruits and vegetables. Simplifying insurance to cover all livestock and crop revenue on a given farm (plus reducing the taxpayer subsidy for the insurance premiums, as NTU recommends), might make sense. In fact, diversification would help mitigate the risk of variability in crop yields and prices, thus enabling farmers to self-insure their crops and making healthy products more affordable to consumers.

Subsidizing processed food ingredients is all the more bizarre since the government is simultaneously spending whopping amounts of taxpayer money on educating Americans to eat healthy. For instance, in 2011, the United States Department of Agriculture (USDA) expended $2 million on the initial development and promotion of its most recent food logo, MyPlate, which aims to teach the population what to consume.

A serious problem here is that the USDA and the lawmakers who fund it often fail to see the connection between the agency’s two tasks of administering both farm subsidies and educational programs for healthy eating.

It wouldn’t be the first time. A previous post on Government Bytes recounted findings from a U.S. Public Interest Research Group that corn- and soy-derived food ingredients have received $19.2 billion in federal subsidies since 1995, as revealed by a recent U.S. Public Interest Research Group (USPIRG) report. This amount would allow the government to buy 52 million Twinkies (fortunately, that proposal is not on the table … yet). By contrast, the only significantly-subsidized fruit or vegetable, apples, received about $689 million in subsidies over the same period. This means that, for every half an apple, each taxpayer has subsidized 20 Twinkies per year.

Another problem is that neither strategy seems to be working. In regards to nutrition education, studies have shown that Americans followed MyPlate recommendations in only 2 percent of days in 2011. As for subsidies, they artificially influence consumers’ eating decisions.

Both UCS and USPIRG’s calls for action show why so many voices on various parts of the political spectrum are arguing that farm subsidies should be completely eliminated or curtailed. This chorus for reform, among taxpayer groups, government transparency advocates, international aid societies, and others, will only grow more vocal if or when lawmakers attempt to cobble together yet another flawed Farm Bill this fall.  And why not?  After all, since farming came before subsidies, it should be more than able to outlive politicians’ manipulations.