Tuesday, November 11, 2008

Subsidized corn = subsidized fast food

Wired has a front-page article that states something that I've long suspected: one of the main reasons fast food is so cheap is because of subsidized corn:

Chemical analysis from restaurants across the United States shows that nearly every cow or chicken used in fast food is raised on a diet of corn, prompting fresh criticism of the government's role in subsidizing poor eating habits. [...]

Corn is central to agriculture in the United States, where it is grown in greater volumes and receives more government subsidies than any other crop. Between 1995 and 2006 corn growers received $56 billion in federal subsidies, and the annual figure may soon hit $10 billion.

In addition to encouraging unhealthy fast food consumption beyond the free market equilibrium, cheap corn also contributes to fertilizer and antibiotic use, as well as food poisoning:

But in recent years, environmentalists have branded corn as an icon of unsustainable agriculture. It requires large amounts of fertilizer and pesticides, both of which require large amounts of fossil fuel to manufacture.

Most of the resulting corn is fed to livestock who didn't evolve to subsist entirely on corn. In cattle, eating corn increases flatulence emissions of methane — a potent greenhouse gas — and creates an intestinal environment rich in e. coli, a common cause of food poisoning. That necessitates mixing cow feed with antibiotics, in turn producing antibiotic-resistant disease strains.

Though Obama has paid lip service to reform, he still supported the most recent farm bill. His only misgivings about the bill, at least during the campaign season, came in the form of anti-agribusiness populism, though he never acknowledged that it's the fundamental distortionary effects of the farm bill that are the problem. McCain, for all his economic ignorance, agreed with the majority of economists in opposing the farm bill, though he didn't seem to care enough to show up to vote on it this time around (though neither did any of the other presidential candidates).

Unfortunately, the farm bill is only seriously renegotiated every five years, and the most recent one just passed a few months ago. So even if President Obama would have been more intelligent and sincere on agricultural policy than wannabe President Obama, it's really too late now to matter.


Anonymous said...

they really should be investing in organic food its a shame they are paying way for unheathy food.just makes me sick=[

Raționalitate said...


I'm not sure if I agree with you about subsidizing organic food. I think that non-organic food has its place and purpose, although this has been stretched in recent years with farm subsidies and other regulatory nudges towards fast food/processed food. But when you remove these interventions in the market, I think that you'd be surprised at how well organic and healthy food is able to compete on its own. And as a political tactic, I think it's probably easier to convince skeptics to do away with the subsidies entirely rather than remove them for one industry and build them up in another.

- Stephen