1) Food is a private good. A private good is “A product that must be purchased in order to be consumed, and whose consumption by one individual prevents another individual from consuming it” (http://www.investopedia.com/terms/p/private-good.asp ). Some, however, feel food should be a public good. (See, for example, Pol). The “food as public good” argument in essence is that food is a human right that should be guaranteed to everyone. Food security for all cannot be achieved through a market – based production of food. There are many positive and negative externalities of food, from the time a seed is planted until human waste shows up at sewage treatment plant. Some of the negative externalities of food are pesticides contaminating water, nitrate and phosphate pollution from fertilizers, soil erosion and air pollution. Positive externalities include an increase in biodiversity, protection from storms, flood control and the provision of jobs.
2) The government became involved in subsidizing food production during the Great Depression when farmers were being destroyed by low grain prices. The Agriculture Adjustment Act paid farmers to leave fallow a part of their acreage. The initial bill also provided the precursor to the food stamp program. In 1938, a renewed farm bill added supports for specific crops. For the next 60 years, the federal government bought grains to control their release onto the market. The food stamp program expanded into urban areas. Today the food stamp program is about two-thirds of the farm bill budget. About 38% of farmers receive subsidies (Masterson) The Farm Bill has long outgrown its original intent as a safety net for farmers in troubling financial times.
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In the 1970s when grain prices soared, there was abundant discussion about the government’s role in commodity prices. In the 1980s, many farms went bankrupt as commodity prices declined. Farmers were heavily into debt from buying land and equipment in anticipation of continued high profits. The federal government was keeping many farmers on their land and allowing them to gain access to credit, warding off bankruptcy and foreclosure. Legislation and government program are slow, crude responses to market conditions.
3) There are positive and negative consequences of government intervention in agriculture. The administration of the Farm Bill is plagued with errors common to many large government subsidy programs – payments made to dead farmers and young children being named as farmers. Direct payments are one provision of the Farm Bill that is heavily criticized by many. Direct payments are checks sent to farmers regardless of the commodity market. The amount of the check is based on historical yields. Farmers could qualify for direct payments with no current crops. Direct payments are not based on farmer income. This is an example of market failure – direct payments are not based on supply and demand.
Another example of market failure is the subsidies paid under the Farm Bill to large, commercial farmers without any income cap. Many receivers of the subsidies are multimillionaires that have become dependent on payments from the federal government each year to balance the farm budget.
4) One optional role for government (versus the market) in the food policy area is to consider and provide food as a public good. This would involve, at a minimum, more regulations and an accountable distribution system. Reconfiguring food as a public good would discourage negative externalities and encourage positive ones (see answer to #1 above).
It is evident that the current industrial food system does not and cannot alleviate world hunger or obesity (Gottlieb and Andrew 2/12). The current industrial food system views food as a commodity to be distributed according to market rules. Despite amazing advances in crop outputs, unregulated markets, which are governed by self-interest, do not provide sufficient food for low-income people. The main problem resulting in hunger is access to food, not necessarily low incomes. The government can establish a fairer and more sustainable agricultural system not governed by the rules of supply and demand.
Certain aspects of food production have been evolving from a private to a public good, but can only go so far without radical change and the assumption of the responsibility to provide food by the government. Public-private partnerships concerning nutrition, food safety and public health abound. Accepting a human right to food would have far-reaching implications. To start with, a minimum wage tied to food costs would help “the working poor” escape dire hunger. The objective is a fairer and more sustainable food system, from production to consumption.
- Gottlieb, Robert; & Fisher, Andrew. “Community Food Security: Policies for a More Sustainable Food System in the Context of the 1995 Farm Bill and Beyond.” The Ralph and Goldy Lewis Center for Regional Policy Studies. UCLA, 1995.
- Masterson, Kathleen. “Round and round we go”. Harvest Public Media. 2011.
- “Milking Taxpayers”. The Economist, 14 Feb. 2015< http://www.economist.com/news/united-states/21643191-crop-prices-fall-farmers-grow-subsidies-instead-milking-taxpayers> Print and Web.
- Pol, Jose Luis Vivero.”The food commons transition.” The Broker Online, 12 pp. Web.
