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Economic Sense

RSS By: Matt Bogard,

Matt's primary interest is in the biotech industry and ag policy.

A Cheap Food Policy

Sep 18, 2010

By Matt Bogard

In a really great essay I read this week,  (A Cheap Food Policy: Good or Bad?) an Ohio State Ag Economist stands up for modern agriculture and family farms taking on myths and agendas related to farm subsidies, high fructose corn syrup, and sustainability.

"Opponents of modern agriculture, who express concerns about the sustainability of improved seeds and fertilizers, call for food that is organic, local, and slow. That is the type of food found in rural Africa, where impoverished farmers do not have the capacity to buy crop inputs, attend school, create infrastructure, and fund research. And with that beginning, a noted economist answers the rhetorical question, "Is there a high cost of cheap food policies?"

 "The OSU economist begins with a response to the criticism about agricultural subsidies, which the critics say are responsible for unhealthy foods. One of those is Michael Pollan, whose attacks on "a plague of cheap corn" target former Secretary of Agriculture Earl Butz, and, according to Pollan, "induced a plague of factory mega farms, fast and cheap food, and obese consumers." Tweeten says commodity programs account for only 2% of consumer expenditures on food and not large enough to have much influence on consumer purchases. ..He is quick to add that since farmers only receive 25% of a consumer food dollar, commodity programs only affected food prices by 1% and not enough to have an impact on either consumption or obesity."

Continue reading hear at The Farm Gate or find Tweeten’s actual essay here.
One thing I would emphasize in relation to  agriculture in places like rural Africa is the fact that the largest demographic in terms of green technology adoption (like GMOs) includes resource poor small land holders in developing countries  and the main reason for their adoption is refelctive of the fact that unlike many green technologies that require heavy investment or retooling (where costs are more easily spread over larger operations on a per unit basis), biotechnology is relatively size neutral. Farmers are able to save on inputs and  improve yields (the 'green' aspect) vs. incurring large sunk costs.
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