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Are fruit and vegetables really more expensive than soy and corn?

April 5th, 2011

I just read an extremely interesting piece on “cheap food,” by Wellesley College prof Robert Paarlberg at Good Magazine (via Yoni Freedhoff’s newish Weighty Matters Facebook page). It’s a mind-twister: Paarlberg argues against the Michael Pollan/Mark Bittman claim that farm subsidies make junk food cheap and healthy food expensive, thus contributing to the obesity problem.

His main claim is that U.S. farm policy acts primarily by propping up prices for foods like sugar, beef and milk, for example by slapping import tariffs on sugar from countries where it’s cheaper to produce. This makes sugar more expensive, not less expensive. Same with ethanol subsidies, which drive the price of corn (and thus high-fructose corn syrup) up, not down. As for direct payments to encourage extra production when prices are low, he argues that these only lower the price of corn “slightly.”

Is this a fair assessment of the overall effect of U.S. farm policy? Or is he just cherry-picking a few elements of the farm policy that support his perspective? According to Bittman, the 2012 U.S. farm bill includes $30 billion of subsidies, of which $5 billion is direct payments to farmers. Direct payments, of course, effectively lower prices, contrary to Paarlberg’s thesis. Where do these direct payments go? According to this analysis, about a third of the total direct payments between 1995 and 2008 went to corn growers, followed by wheat then soybeans.

But we’re still considering the problem too narrowly, I think. Even if we accept the core of Paarlberg’s premise — that subsidies to corn and soy primarily serve to keep prices high so that the farmers earn a reasonable income — that still has far-reaching effects on the rest of the food system. Ethanol subsidies may drive corn prices higher, but they also create an insatiable demand for corn, encouraging farmers to plant corn instead of other crops. By making corn and soy reliably profitable (with production and loan guarantees, by propping up prices, or through whatever other means the farm bill employs), they’re effectively discouraging other crops and making them more expensive.

So what’s the overall effect of all this? The fact is, I don’t have enough information or expertise to figure it out. But we have another option: we can look directly at food prices to see which types of food are getting more or less expensive. Paarlberg does this, and concludes that the price of fruits and vegetables has fallen at exactly the same rate as the price of junk food, drawing on data from a 2008 USDA study. He even helpfully includes a couple of graphs from the study to illustrate his point:

price trend for apples and cookies

Again, we might ask whether this is the full story. If we go back to the USDA report he cites, the very first figure is the following:

food prices between 1980 and 2006A bit of a different picture! But food prices are complicated, as the authors of the USDA report explain. It’s possible that the rise in the price of fruits and vegetables reflect changes in quality: now we buy peeled baby carrots instead of unpeeled carrots, and we expect fruits to be available all year. That’s why they examine the price trends for specific items like apples and chocolate chip cookies. Of course, once we’re choosing individual products rather than a broad basket of goods, our biases come into play. It’s no surprise that Paarlberg didn’t choose to show the data for, say, broccoli (on the left) and potato chips (on the right):

food price broccoli potato chipsThis pair of graphs tells a different story — but they, too, are selectively chosen to make a point. So what’s the truth? It’s very hard to tell; or, conversely, it’s very easy to find data to back up different points of view. Here’s another graph from the Institute for Agriculture and Trade Policy, based on earlier USDA data:

With this surfeit of data to choose from, it’s worth asking who’s choosing what data to show us. In the comments on the Good website, several people point out that Paarlberg was a member of Monsanto’s Biotech Advisory Council to the CEO — not surprising, given that his most recent book is Starved for Science: How Biotechnology Is Being Kept Out of Africa. There’s nothing inherently wrong with advising Monsanto, but it does give us a sense of the perspective with which he’s approaching the data.

Ultimately, I think the article is very much worth reading. It’s a useful — and perhaps much needed — corrective to the idea that all our societal health problems are the result of a conspiracy by big business to cram us full of high-fructose corn syrup. It may well be that, given the realities of modern technology, unhealthy food really is cheaper to produce than healthy food, independent of what the government does — in which case more responsibility devolves onto us to make healthier but more expensive choices. But even if that’s the case, there’s no reason for the government to make the situation worse by continuing to preferentially encourage unhealthy mega-crops over healthy ones!

  1. April 5th, 2011 at 15:14 | #1

    I think the numbers speak for themselves, regardless of what effect government subsidies might have on it. Thanks for an article focusing on the heart of the matter.

  1. April 6th, 2011 at 13:46 | #1