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Farm Policy and Obesity in the United States

  • Medicine


3rd Quarter 2010 | 25(3) FARM POLICY AND OBESITY IN THE UNITED STATES Julian M. Alston, Bradley J. Rickard, and Abigail M. Okrent JEL Classifications: I18, Q18 Many commentators—including prominent economists, nutritionists, journalists, and politicians—have claimed that American farm subsidies have contributed significantly to the “obesity epidemic” by making fattening foods relatively cheap and abundant, and that reducing these subsidies will go a long way towards solving the problem. These commentators often treat the issue as self-evident, and do not present either details on the mechanism by which farm subsidies are supposed to affect obesity, or evidence about the size of the likely impact. In this article we examine the consequences of U.S. farm subsidies—including indirect subsidies provided by trade barriers as well as direct subsidies—for prices of farm commodities and thus food products and caloric consumption patterns in the United States. We show that U.S. farm subsidies have had generally modest and mixed effects on prices and quantities of farm commodities, with negligible effects on the prices paid by consumers for food and thus negligible influence on dietary patterns and obesity. This result is consistent with some previous work by economists on the issue (see Alston, Sumner, and Vosti, 2008 and the papers they cite), but contradicts the mainstream view in the media. Farm Policy and Commodity Prices A simplistic model of farm subsidies and obesity, which is implicit in some writings on the subject, presumes a textbook subsidy policy that results in an increase in both production and consumption of the subsidized good by increasing the net return to producers—the market price plus the subsidy—and lowering the market price paid by consumers. However, the main elements of U.S. farm subsidy programs are significantly different from simplistic textbook subsidy policies. Farm subsidies have resulted in lower U.S. prices of some commod

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