Effects of Agricultural
g
Policies on
Human Nutrition and Obesity
Stephen A. Vosti
Julian Alston (PI)
Daniel Sumner
Lucia Kaiser
Agricultural
Issues Center
Department of Agricultural
and Resource Economics
This project was supported by the National Research Initiative,
CSREES, USDA, Grant 2006-55215-16720 (016501).
Vosti UCD/AIC/ARE
Motivation
“[Our] cheap-food farm policy comes at a high price: …
[with costs including] the obesity epidemic at home –
which most researchers date to the mid-70s, just when
we switched to a farm policy consecrated to the
overproduction of grain.
grain.” (NYT, 2003, Michael Pollan)
• This view has become accepted as a fact, in spite of
– No real evidence presented
– Questions about the nature of effects
– Grounds for skepticism about the size of effects
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Objectives and Research Activities
• Key Objectives
– Better understand the effects of selected agricultural policies on
y
obesity
– Identify policy culs-de-sacs
• Based on policy-outcome links that never existed
• Based on policy-outcome links that have changed over time
– Id
Identify
tif agricultural
i lt
l policy
li options
ti
for
f helping
h l i to
t address
dd
the
th
obesity problem
• Mechanisms
• Unexpected side-effects
• Likely size of effects
• Selected Elements of Our Research Program
– Price Trends
– Farm
F
Bill
• Commodity Subsidies
• Food Stamp Program
– Market for Sweeteners
– Latino Toddlers Participating in WIC Program
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Trends in Commodity and Food
P i
Prices
&
One Key Driving Force
or
“Healthy
Healthy Foods Are Increasingly Out
of Reach to the Poor (and Bad
Agricultural Policy Is Responsible).”
Vosti UCD/AIC/ARE
Nominal Commodity Prices Received by
Farmers Have Increased
600
Price Index (1949
P
9=100)
500
400
300
200
00
100
0
1949
1954
1959
1964
1969
1974
1979
1984
1989
1994
1999
2004
Year
Fruit and nut crops
Vegetables
Field crops
Nur & greenhouse
Nur.
Source: Alston, J. M. and P. G. Pardey. 2006. Public Funding for Research into
Specialty Crops. Paper Prepared for the CAL-MED Workshop, USDA ERS
Livestock
Specialty crops
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Real Commodities Prices Received By
Farmers Have Generally Declined
140
Price Index (1949
9=100) .
120
100
80
60
40
20
0
1949
1954
1959
1964
1969
1974
1979
1984
1989
1994
1999
2004
Year
Fruit and nut crops
Nur. & greenhouse
Vegetables
Livestock
Source: Alston, J. M. and P. G. Pardey. 2006. Public Funding for Research into
Specialty Crops. Paper Prepared for the CAL-MED Workshop, USDA ERS
Field crops
Specialty crops
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Prices Paid By Consumers Have Also Generally
Fallen, but Less Swiftly Than Commodity Prices
Consumer Prices for Ground Beef Deflated by CPI (food at home)
Consum er Prices for Eggs Deflated by CPI (food at hom e)
2.50
2.00
1.00
0.80
$/lb.
0.60
0.40
1.50
1.00
2004
2000
1996
1992
1988
0.00
Year
1984
0.50
2004
2000
19
996
19
992
19
988
19
984
19
980
0.20
0.00
1980
$/doz.
1.40
1.20
Year
Eggs, Grade A Large
Ground Chuck, USDA Choice Cons.Food_Prices!$N$7, 100% Beef
Consumer Prices for White Sugar Deflated by CPI (food at home)
1.00
0.70
0.90
0.60
0.80
0 50
0.50
$/lb.
0.70
0.40
0.60
0.30
0.50
0.20
0.40
Chicken, w hole, fresh
2001
1994
1987
2004
2000
1996
1988
1984
1992
Year
1980
0.10
0.30
1980
$/lb.
Consumer Prices for Chicken deflated by CPI (food at home)
Year
Sugar, w hite, all sizes
Vosti UCD/AIC/ARE
Almost All
Consumer
Prices for
Foods Have
Fallen, Some
More Swiftly
Than Others
White Bread: 0.0
Rice: -.029
Pasta: -.020
Lettuce: -.009
Tomatoes: +.004
Carrots: -.009
Potatoes: 0.0
Bananas: -.013
Apples: -.009
009
White Sugar: -.024
Oranges: 0.0
Butter: -.013
Grapefruit: -.004
Milk: -.011
Cheese:- .033
Statistics report proportional changes in real prices over 1980-2003: Data sources USDA
Turkey: -.026
Chicken: -.012
Eggs: -.019
Beef: -.021
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Trends in Aggregate Agricultural
Productivity
Index of Land Productivity
(1977=100)
140
Index of Labor Productivity
(1977=100)
160
120
140
100
120
80
100
60
80
60
40
40
20
20
1982
1978
1974
1970
1966
1962
1958
1954
1950
1946
1942
1938
1934
1930
1926
1922
1918
1910
Year
1914
0
1990
1985
1980
1975
1970
1965
1960
1955
1950
1945
Year
Land Productivity
L b P
Labor
Productivity
d ti it
Total Factor Productivity Index
(1948=100)
300
250
200
150
100
50
1996
1993
1990
1987
1984
1981
1978
1975
1972
1969
1966
1963
1960
1957
1954
1951
0
1948
1940
1935
1930
1925
1920
1915
1910
0
Year
TFP
Vosti UCD/AIC/ARE
Public Sector and Private Sector Trends in
g
R&D Spending
p
g
Agricultural
Total Federal and State Spending on Ag. R&D
(1925-1997)
3500
3000
2000
1500
1000
500
1997
Total Private Sector Spending on Ag R&D
(1960 1992)
(1960-1992)
Year
Total Ag. R&D Spending
4000
3500
3000
2000
1500
1000
500
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
1968
1966
1962
0
1960
mil. $
2500
1964
1993
1989
1985
1981
1977
1973
1969
1965
1961
1957
1953
1949
1945
1941
1937
1933
1929
0
1925
mil. $
2500
Year
Private Ag R&D Spending
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The Effects of U.S. Farm
Subsidies on Obesity
or
“If
If It Weren’t
Weren t for Corn Subsidies
Subsidies,
We’d All Be as Slender as Reeds”
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Logical Sequence Linking Farm Subsidies
to Obesity
• First, farm subsidies must have made farm commodities that
are important
i
ingredients
i
di
off relatively
l i l fattening
f
i foods
f d
significantly more abundant and cheaper.
• Second, the lower commodity prices caused by farm subsidies
must have resulted in significantly lower costs to the food
industry, and cost savings to the food marketing firms must
h
have
b
been passed
d on tto consumers iin th
the fform off llower prices
i
of relatively fattening food.
• Thi
Third,
d ffood
d consumption
ti patterns
tt
mustt h
have changed
h
d
significantly in response to these policy-induced changes in
the relative prices of more-fattening versus less-fattening
foods
foods.
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USDA Budget, 2007
Expenditure
in 2007
Percent
of Total
billions of dollars
percent
Food, Nutrition, and Consumer Services
54.4
43.3
Farm Service Agency (farm programs)
33 9
33.9
27 0
27.0
Rural Development
14.4
11.5
Natural Resources and Environment
7.7
6.1
Foreign Agricultural Service
5.2
4.1
Risk Management (mainly crop insurance)
4.2
3.3
Res Educ
Res.,
Educ. and Econ
Econ. (mainly ag.
ag R&D)
23
2.3
18
1.8
Marketing and Regulatory Programs
1.7
1.4
Other
1.8
1.4
125.6
100.0
USDA Program
TOTAL
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Fundamental Misconceptions Regarding The
Effects of Agricultural Policies
• Directions of Effects on Production and Prices Are Not the Same
for All Policies, e.g., …
– Sugar is more expensive due to trade and other policies
– Corn and soybeans are probably cheaper than they otherwise would be
– Dairy policies make milk products more expensive, but policies that make
animal feed cheap work in the opposite direction
– Some of these effects might actually help reduce obesity
• E.g., more expensive sugar and dairy products may reduce calorie and fat
consumption
• Magnitudes of Effects Are Generally Small, e.g., ..
– Policy effects on the prices of most field crops (e.g., wheat, corn and
soybeans) are small
– Policy effects on other commodities (e.g., rice, cotton and sugar) are
larger
Vosti UCD/AIC/ARE
Production and Price Effects of Eliminating U.S.
Commodity Programs and Policies
Soybeans
Wheat
Maize
Ri
Rice
Cotton
Cane and beet
Fruit and vegetables
Beef cattle
Pigs and poultry
Milk
% Change in
p in 2016*
Output
-2.86
-7.58
-3.79
-11.71
11 71
-13.88
-33.31
4 42
4.42
1.44
0.41
-0.45
% Change in Producer
Prices in 2016*
-1.14
1.52
0.26
-3.87
3 87
-6.10
-15.30
-5 16
-5.16
-3.31
-0.01
-0.01
Source: McDonald et al. 2006, reported in Alston 2007.
(*based on the differences in 2016 between the prices and quantities that emerge from a status quo policy scenario
and those that emerge from a scenario in which all commodity programs are gradually eliminated over the period
2006-2016)
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Conclusions for the U.S. and
Polic Implications
Policy
• The U.S. Farm Bill’s Commodityy Programs
g
are
Inefficient and Unfair
– These are good (and sufficient) reasons to eliminate them
– But do NOT expect that action to affect obesity, because …
• Commodity Programs’ Effects on Commodity Prices
A G
Are
Generally Small
S
and Varied
i
• The Effects of Commodity Prices on Food Prices Is
D li i
Declining
• The Responsiveness of Food Demand to Changes in
Food Prices Is Generally Low
Vosti UCD/AIC/ARE
An Economic Assessment of A Proposed
Ch
Change
tto th
the F
Food
d St
Stamp P
Program
• Proposed Changes
–R
Restrict
i the
h U
Use off F
Food
dS
Stamps ffor
‘Unhealthy’ Foods
• What
Wh W
Would
ld the
h Lik
Likely
l Eff
Effects O
On:
– Food consumption of FSP participants
– Food consumption of eligible non-participants
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Supply Response to Policy Change
The Market for “Unhealthy” Food
The Market for “Healthy” Food
Price
(Pu)
Price
(Ph)
SU
SH
Ph,1
Pu,00
Ph,2
Pu,2
Ph,0
Pu,11
DU0(Ph,0, FSP0)
DH1(Pu,0 , FSP1)
DU2(Ph,2
h 2, FSP1)
DH2(Pu,2
u 2 , FSP1)
DU1(Ph,0, FSP1)
DH0(Pu,0 , FSP0)
0
h0
h2
h1
1
Healthy Food (h )
0
u1
u2
u0
Unhealthy Food (u )
Vosti UCD/AIC/ARE
Main Conclusions
• Restriction of food stamps to only healthy foods
may have unintended consequences
– If constraint is not binding (because “healthy” food
expenditure
p
exceeds food stamp
p value)) no effect
– If constraint is binding . . . .
• Reduced participation by some eligible households
• Reduced consumption of “unhealthy” foods by some FSP
households => induced price changes and increased
consumption of “unhealthy” foods by non-participants
• Targets and instruments
– Use food stamps to provide food for the poor
– Use other policies to encourage a healthy diet
Vosti UCD/AIC/ARE
An Economic Analysis
y of the
Market for Sweeteners
or
“If IIt W
Weren’t
’ ffor HFCS
HFCS, W
We’d
’d All
Be Svelte”
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Issues Addressed
• What Is the Influence of Farm Policy on
Changes in Added Sugar in the US Diet?
• Has Farm Policy Contributed to the Change
in Sweetener Consumption and
Composition?
• What Is its Contribution Today?
Vosti UCD/AIC/ARE
Per Capita Sweetener Consumption
160
140
sugar
corn
total
HFCS
pounds dry weight
120
100
80
60
40
20
0
66
19
69
19
72
19
75
19
78
19
81
19
Source: USDA/Economic Research Service
84
19
87
19
90
19
93
19
96
19
99
19
02
20
05
20
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Industrial Use of Sugar, by Product Group
Source: Calculated from U.S. Census Bureau
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Farm Value Share in Retail Cost
f P
for
Processed
dF
Food
dP
Products
d t
70
Bakery and cereal products
60
Fresh vegetables3
Meat products
Dairy products3
value s
share (%)
50
40
30
20
10
0
67 969 971 973 975 977 979 981 983 985 987 989 991 993 995 997 999 012
9
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
20
Source: USDA/Economic Research Service
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Changes in US Sugar Market
Correlations among raw, whole, and retail sugar prices
Time period
Retail, wholesale
refined
Wholesale
refined, raw
Retail, raw
1960-1981
0.97
0.99
0.94
1982 2006
1982-2006
0 44
0.44
0 58
0.58
0 14
0.14
1995-2006
0.60
0.65
0.01
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Changes in Links Among Markets
Correlations among corn, HFCS, and carbonated drink prices
HFCS,
carbonated
drinks
-0.30
Corn, HFCS
1978-2006
Corn,
carbonated
drinks
-0.21
1978-1992
-0.06
0.51
0.47
1993-2006
-0.28
0.07
0.33
0.42
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Summary and Lessons Learned
• Ag R&D Affects Commodity Prices
– Corn price has fallen faster than sugar price
– Price of HFCS has fallen over time and lowered
unit cost of sweeteners
• Ag input costs are falling relative to other input
costs in food processing
• Today: tenuous link between farm/commodity
policy
p
y and the retail cost of sweetened ggoods
• Evidence from other high-income countries shows
little relationship
p between consumption
p
of sugar
g
and sugar policies
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Latino Toddlers in the WIC Program
• Research Questions
– What are the effects of child feeding practices on nutritional
status
t t and
d growth?
th?
– How do caregiver, household and neighborhood factors
condition these effects?
• Sample
– Approximately 100 Latino toddlers from the Sacramento,
California area
• Research
R
hM
Methods
th d
– Baseline data collection: anthropometrics, feeding practices
(new survey instrument developed), dietary intake,
socioeconomic factors
– Second round data collection: anthropometrics, feeding
practices, dietary intake, changes in key socioeconomic factors
– Econometric model to identify links
Vosti UCD/AIC/ARE
Toddler Weight Status (n=94):
WHO NCHS
Normal
Normal 68 1% 77.6%
68.1% 77 6%
Overweight 24.5% 16%
Obese 7.4% 6.4%
Toddler
Weight/Length
Z-Scores
WIC Sample Children
WHO Standards
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Preliminary WIC Study Results
Toddler Macronutrients
Maternal BMI (n=95):
(
)
Normal = 22%
Overweight = 37%
Obese = 41%
Oils, and Lard
2 0%
Baby Food
b
d 2.0%
0.3%
Canned and Bottled Goods
4.7%
Non‐Alcoholic Beverages
0.9%
14%
20%
% calories from fat
% calories from
carbohydrate
% calories from
protein
Alcoholic Beverages
1.5%
Vegetables
bl
9.9%
Other Miscellaneous Foods
10.6%
66%
Fruit 10%
Miscellaneous Miscellaneous
Dry Goods
2.2%
Dried Beans, Pasta, and Rice 2.0%
Cookies, Crackers and Baker Goods
and Bakery Goods
4.7%
Seafood
4.0%
Meat and Poultry 22%
Tortillas
5.0%
Breads and Cereals
B
d
dC
l
6%
Dairy Products
10.7%
Prepared Foods
4.2%
% of Monthly
Food
Expenditures
Household Characteristic
Mean
size of household
5.24
% live with extended family
0.35
number of children
2.30
born in US
0.23
speak English at home
0.14
employed
0.35
years of school
10.88
monthly income
2215.13
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Complex Links among Factors Potentially
Influencing Toddler Nutritional Outcomes
Food Outlets
Types
Densities
Neighborhood Level
Recreational Options
Housing
Characteristics
Income and Wealth
Household Level
Food Purchases
Food Availability
Caregiver Level
Toddler Feeding
Practices
Nutritional Knowledge
Nutritional
Status
Employment Status
Charact.
Food Intake
Genetics
Energy
Expenditures
Toddler Level
N t iti
Nutritional
l St
Status
t
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Next Steps
• Agricultural Policies
– Specialty crop R&D
– Biofuels
• Sweetener Study
– Changes
g in market structure
– Model simulations
• WIC Toddler Study
– Final round of data collection
– Analysis and policy messages to WIC
Vosti UCD/AIC/ARE
Publications to Date
•
•
•
•
•
•
•
•
•
•
•
•
Alston, J.M., D.A. Sumner, and S.A. Vosti. “Are Agricultural Policies Making Us Fat? Likely Links between Agricultural
Policies and Human Nutrition and Obesity, and Their Policy Implications.” Review of Agricultural Economics
28(3)(Fall 2006): 313-322.
Alston, J.M. and P.G. Pardey. “Public Funding for Research into Specialty Crops.” Staff Paper Series P07-09, Department of
Applied Economics, University of Minnesota, May 2007.
Alston, J.M., and D.A. Sumner. “Perspectives on Farm Policy Reform.” Journal of Agricultural and Resource Economics
32(1)(April 2007): 1-19.
Chaidez, V. and L. Kaiser. “Early Child-feeding Practices in Mexican Americans Deviate from Current Recommendations.”
Abstract published in the American Dietetic Association Journal Supplement for the American Dietetic Association
g September
p
29-Oct 1, 2007. (J Am Diet Assoc. 2007;107(supp3-Abstracts):A18)
pp
Annual Meeting,
Beghin, J., and H.H. Jensen. “Farm Policies and Added Sugars in US Diets.” “Farm Policies and Added Sugars in US Diets”.
2008. CARD Working Paper, 08-WP 462, Center for Agricultural and Rural Development, Iowa State University.
February.
Alston, J.M., D.A. Sumner, and S.A. Vosti, “Farm Subsidies and Obesity in the United States.” ARE Update 11(2)
((November/December 2007):
) 1-4.
Mullally, C.C., J.M. Alston, S.A. Vosti, D.A. Sumner, and M. Townsend. “Proposed Modifications to the Food Stamp
Program: Likely Effects and their Policy Implications.” Chapter in Elliott Blass (ed.) Obesity: Causes, Mechanisms,
and Prevention, published by Sinauer Associates, Inc., Sunderland, MA, 2008.
Alston, J.M., D.A. Sumner, and S.A. Vosti, “Farm Subsidies and Obesity in the United States: National Evidence and
International Comparisons.”
p
Forthcomingg in Food Policyy in a special
p
issue “Food Product Composition,
p
, Consumer
Health, and Public Policy,” L. Unnevehr and E. Golan (eds).
Beghin, J., and H.H. Jensen. “Farm Policies and Added Sugars in US Diets.” Forthcoming in Food Policy in a special issue
“Food Product Composition, Consumer Health, and Public Policy,” L. Unnevehr and E. Golan (eds).
Alston, J.M. and P.G. Pardey. “Public Funding for Research into Specialty Crops.” HortScience (2008): In Press.
Beghin J.C.
Beghin,
J C and H.H.
H H Jensen.
Jensen Farm Policies and Added Sugars in US Diets.
Diets Food Policy (forthcoming 2008)
2008).
Beghin, J.C. and H.H. Jensen. Farm Policies and Added Sugars in US Diets. CARD Working Paper 08-462.
Vosti UCD/AIC/ARE