Are Farm Subsidies Making us Fat....

There is a big difference between when those on the left criticize farm subsidies vs those on the right. Coming from the left, its not the subsidies they dislike, so much as subsidies for politically incorrect agriculture. In fact, many times in the same argument they will turn around and advocate for more subsidies for politically correct agriculture (local, organic, etc.) For the left, a criticism of farm subsidies is more often an underlying criticism of modern agriculture. From the right arguments are more about efficiency and distortions. The irritating thing is sometimes some on the right might get a little lazy and sloppy in their thinking about subsidies and take up some of the same specious arguments made by the left...helping the cause for more regulation, higher prices, and fewer choices for consumers.

Any way, along these lines there was almost what I would call a hit piece in the NYT recently drumming up a connection between farm subsidies and obesity. Its more like sci-fi than anything science based. They are basically extrapolating some meaningless correlations until they turn into a giant industrial ag monster. Worse, its like a bad sequel, because we see this spurious connection creeping up time to time in the popular media.  Following the typical script its not the subsidies in general that they don't like....in fact some of the authors interviewed advocate for subsidies for 'politically correct' foods. Its the connection to politically incorrect industrial agriculture that is the emphasis here. This isn't really a critique of subsidies so much as a critique of modern agriculture itself.

From the NYT: How the Government Supports Your Junk Food Habit

"While the study does not prove cause and effect, its authors say that this strong association is consistent with other research showing that diets that are higher in subsidized foods tend to be poorer quality and more harmful to health."

“This tells us that the factors that influence the prices of our foods are an additional factor,” said Ed Gregg, chief of the epidemiology and statistics branch in the C.D.C.’s Division of Diabetes Translation. “We’re hoping that this information reaches policy makers and the people who influence how subsidies work.”

The causal chain of events they are suggesting just completely breaks down. The factors that influence prices…i.e. farm policies…have way too small of an effect on the retail prices consumers pay. And consumers just aren’t sensitive enough to these prices to respond by consuming more. That’s at least what the science tells us…and I hope that information reaches policy makers.

Economist Jayson Lusk knocks it out the the park. He addresses the science behind these specious connections  (and links to a number of related research articles) and includes some of his work in the area:

"There are actual lots of people who know how much farm subsidies contribute to food consumption, and they're called agricultural economists (in fact, McMillian goes on to then cite two prominent food and agricultural economists on the issue: Parke Wilde and David Just)…..In the model I used for the forthcoming paper I wrote on the distributional impacts of crop insurance subsidies, I find that the complete removal of crop insurance subsidies to farmers would only increase the price of cereal and bakery products by 0.09% and increase the price of meat by 0.5%, and would also increase the price of fruits ad vegetables by 0.7%.  So, while these policies may be inefficient, regressive, and promote regulatory over-reach, their effects on food prices are tiny, and depending on which policy we're talking about, could push prices and consumption up or down. " 

Here are 3 more big questions that might serve as trailers for future sci-fi NYT ag hit pieces:

1) Do farm subsidies encourage farmers to plant biotech or GMO seeds?

2) If subsidies drive the production of commodities and most of these are GMO,  aren’t we indirectly subsidizing GMOs?

3) Do farm subsidies largely prop up wealthy farmers vs. helping small farmers thrive in a volatile, competitive global and corporate dominated marketplace?

For answers to these questions (and a big spoiler alert to anti-ag activists) see:  http://ageconomist.blogspot.com/2015/04/whats-big-deal-about-farm-subsidies.html

CRISPR Technology and Agriculture

A nice article related to CRISPR technology and an application with waxy corn in a recent DTN article:

https://www.dtnpf.com/agriculture/web/ag/news/article/2016/06/17/gene-editing-comes-agriculture 

The article gives a nice description of how CRISPR works as a gene editing technique, and the current and prospective regulatory environment surrounding it.

This is really interesting given the recent Vermont GMO labeling requirements, and the national ramifications. How will consumers perceive this newer technology? It has always been the case that recombinant DNA or transgenic approaches were much more precise than random wide genetic crosses, but this technology is much more like a very controlled within genome manipulation. Organic and conventional methods may use radiation or mutagenic chemical agents to create desirable within genome changes, but this technology is much more specific and targeted. We know exactly what we are wanting to achieve or what pathways or genes we want to target vs. blasting a genome with radiation or chemicals hoping for the best. Foodies, activists, and snake oil marketers will be hard pressed to criticize and demonize this technology in the face of what is going on in the natrural, conventional and organic space.I have heard John Phipps mention several times on the AgriTalk Friday free-for-all  discussions that this technology will make the GMO labeling dilemma irrelevant and it might.

It probably won't happen, but given the merger mania currently going on in agriculure, what if some company decided to acquire Monsanto and declare it was ending all GMO R&D in the pipeline? Wouldn't they appear to be saving the day to some activists? When really, they are just restructuring with a focus on CRISPR mediated products. A direction we could be going anyway. I have my doubts about this simply because it would seem that CRISPR could also make transgenic manipulations easier as well and there is certainly a lot of value to be gleaned from this.

Regardless, whether we are talking about finely textured beef, growth promotants, biotechnology etc. no matter how much safer, sustainable, profitable, or healthy, activists and rent seeking niche marketers will find some issue to drum up consumer ignorance and fear to promote sales of their products or policies.