Obesity Economics: How Subsidies Distort the American Diet

Federal subsidies drive food production, consumption, and — unintentionally — chronic disease. Now we’re being asked to subsidize weight loss drugs to fight what farm policy broke. 

By Laura Williams of AIER. 

"Let me introduce you to Sam. Sam has obesity, Type 2 diabetes, heart disease, and high blood pressure. His diet consists mostly of refined grains and trans fats. He’s got cabinets full of dirt-cheap junk food and sky-high healthcare costs to address its effects. He takes home $27,000 a year, but spends $36,000. He’s in debt up to his jaundiced eyeballs, and he wants his niece to foot the bill for weight-loss medication.

As a real-life niece of my Uncle Sam, I’m concerned about his diet. Some 56.2 percent of the daily calories consumed by US adults come from federally subsidized food commodities: corn, soybeans, wheat, rice, sorghum, dairy, and livestock. While these calorie-dense foods once made sense for a government preparing for famine or total war, in recent decades they’ve instead helped make us fatter and sicker. 

Obesity is a top driver of healthcare costs. One study compared the health of people who eat mostly foods the federal government subsidizes to those who eat fewer. Those who follow the revealed preferences of what the government subsidizes (rather than the diet it consciously recommends) are almost 40 percent more likely to be obese and face significant diet-related health issues. Those with the highest consumption of federally subsidized foods also have significantly higher rates of belly fat, abnormal cholesterol, high levels of blood sugar, and more markers of chronic inflammation. All these are increasing contributors to the most common causes of death in the developed world.

The negative impact of subsidized crop consumption on health — while it can’t be called causal — persists even after controlling for age, sex, and socioeconomic factors. But life does not control for those factors.

The Great Grain Giveaway

The federal government recommends one diet to Americans, and subsidizes another. The Dietary Guidelines for Americans from the USDA and HHS promote eating fruits, vegetables, whole grains, protein, and moderate dairy, while limiting saturated fats, sugars, salt, and refined grains. According to data compiled for Meatonomics, American agribusiness receives about $38 billion annually in federal funding, with only 0.4 percent ($17 million) going to fruits and vegetables. Just three percent of cropland is devoted to fruits and vegetables, despite USDA guidelines’ insistence that they should cover half of your dinner plate. Just 10 percent of Americans consume the recommended amount of fresh produce, and the poor consume the least. (Fruit and vegetable producers’ exclusion from the federal direct payments program provides a valuable example of a food industry thriving without significant subsidies. They do, however, rely heavily on migrant labor to lower costs.)

Instead, the US spends tens of billions annually to subsidize seven major commodities. The three largest farm subsidy programs contribute 70 percent of funds to producers of just three crops — corn, soybeans, and wheat. Approximately 30-40 percent of US corn, over half of soybeans, and nearly all sorghum feed livestock, heavily discounting high-fat, lower-nutrition meat and dairy (especially compared to grass-fed options). The prevalence of grain-fed livestock generates demand for commodities used to feed them, completing the circle. 

Subsidies also contribute to our consumption of refined grains, sugary drinks, and processed foods. About five percent of corn becomes artificially cheap high-fructose corn syrup (which allows it to compete with tariffed natural sugars), and half of soybeans are processed into oils, which also contribute to obesity.

My Uncle Sam is sick because he eats the food the government makes artificially more affordable. Those foods are poorer in quality and more harmful to health than their unsubsidized alternatives. We are paying to make ourselves sicker.

Diet-Related Health Issues Fuel Healthcare Costs

For more than 20 years, the FDA has known that trans fats and refined grains harm health, damage metabolism, and cause disease. Diet-related illnesses like obesity, Type 2 diabetes, and high blood pressure are increasing, while heart disease remains the leading cause of death. These epidemics are intertwined at the artery level, and both contribute hugely to rising US health care costs.

In an economic order awash with subsidies and regulation, agricultural policy is health policy. Government subsidies for agricultural products have shaped the current American nutritional environment, and they are exacerbating obesity trends.

An article in the American Journal of Preventive Medicine confirms: “Current agricultural policy remains largely uninformed by public health discourse.”

Johns Hopkins physician (and current Commissioner of the US Food and Drug Administration) Marty Makary called out the disconnect clearly. “Half of all federal spending is going to health care in its many hidden forms,” he told an interviewer in October, but Americans continue “getting sicker and sicker… Chronic diseases are on the rise. Cancers are on the rise. And we have the most medicated generation in human history.”

We’re getting more medicated every day — and more of it is at taxpayer expense. 

A Better Answer Than Ozempic?

Government spending on healthcare now exceeds the entire discretionary budget. Excess weight is a significant risk for older Americans, who are also the most likely to both have high healthcare costs and to rely on government health care. Forty percent of Americans over 60 are classified as having obesity, which is a contributing or complicating factor in diseases that kill older Americans: cancers, heart disease, infection, stroke, and cirrhosis.

Late last year, the Food and Drug Administration approved the weight-loss drug Wegovy as a treatment for people at risk of heart attack or stroke. Medicare is forbidden by statute from covering prescription drugs for weight loss alone, but in 2021 regulators approved Wegovy for reducing weight-related risks in patients with diabetes. Medicare Part D plans spent $2.6 billion last year on related compound Ozempic to keep 500,000 patients with diabetes stable. Wegovy’s list price is around $1,300 per month, but that’s still small compared to the $1.4 trillion Americans spend on direct and indirect costs from obesity.

It has a certain economic logic. Instead of waiting for a patient to develop a cascade of expensive comorbidities like heart failure or diabetes, we could consider asking Medicare to pay for anti-obesity meds on the front end. That wouldn’t work as well as lifestyle changes, but all our health and activity messaging over the past several years doesn’t seem to have moved that needle, and significant evidence suggests our efforts are counterproductive. 

The Tangled Web of Farm Subsidies

To understand the insanity of American agricultural and health policy, it’s hard to do better than comedian-illusionists Penn & Teller, who in characteristically salty style (really — you’ll want headphones and a sense of humor to watch the video) explained it this way 15 years ago: 

High fructose corn syrup is a dirt-cheap way to add sweetener and extend shelf life. And why is it so cheap? Because we subsidize corn farmers! Our government gives about 10 billion of our tax dollars to corn farmers every year so they can produce more corn than we need. They then sell the corn at artificially low prices. They spend our money to make corn syrup cheap, and now the same government that uses our tax money to keep soft drinks cheap wants more of our tax money to make soft drinks more expensive. Does anyone else think this is incredibly f—d up?

Yes, Penn. We do. And since that clip aired, obesity rates have worsened 50 percent, and rose 78 percent in children. Medical spending on the consequences of obesity doubled. Over the same period, subsidies to corn growers (which includes disaster aid and insurance) have tripled. 

Rather than cut back on his terrible diet, Uncle Sam wants us to pony up for weight loss drugs — to undo what our food policy has done."

Bloomberg's nanny policies had no effect on obesity

See Meet RFK Jr.’s MAHA Elite: There’s a reason Mike Bloomberg’s former health commissioners approve of the HHS nominee by Kimberley A. Strassel of The WSJ. Excerpts:

"“We have to tell people how to lead better lives.” Politicians have a duty to protect citizens from greedy industries, to stop corporations from poisoning our food, to steer us away from bad choices. America has a health crisis, and government must make us healthier.

Robert F. Kennedy Jr.?

No, then-Mayor Michael Bloomberg nearly 20 years ago, as he became New York City’s nutritional nag, hectoring and mandating residents, inserting the public-health complex into grocery stores, restaurants and family kitchens. Republicans are now lumbering us with Bloomberg 2.0."

"But New York wasn’t saved. The Big Apple is more obese than it was 20 years ago, with more chronic disease, despite all Nanny Bloomberg’s attempts at coercion. Is that because the evil forces are getting more evil? No. It’s because people continue making bad choices. See the lines to buy that Crumbl Candy Cane Brownie (despite an enforced disclosure it contains 1,210 calories) or the stats on young men who never leave the videogame console. If there’s a conspiracy, it’s us against ourselves."

The Bitter Truth Behind Sugary Soda Taxes

By William F. Shughart II & Josh T. Smith.

"Taxes on sugar-sweetened sodas, heralded as a solution to obesity and poor health, are not the silver bullets they’re cracked up to be. Proponents argue that such taxes will reduce the consumption of soda, which is valid only in blackboard theory. However, the reality is far less sweet.

Evidence suggests that the effect of soda taxes is modest at best. Even when people don’t buy their soda somewhere else (as a new study says they do), they often substitute other sugary foods. Such behavior negates many potential health benefits and points to a fundamental flaw in the soda tax approach: it narrowly targets one component of a more serious dietary problem. As food economist Jayson Lusk wrote in a 2017 article, soda and fat taxes “are unlikely to substantively affect obesity prevalence.”

Moreover, the allocation of soda tax revenues raises questions about the policy’s true intentions. In Philadelphia, for example, nearly 50 cents of every dollar raised by the beverage tax ended up in the city’s general fund rather than being earmarked for programs to combat obesity, as its proponents had promised. The diversion of money underscores a troubling trend. Soda taxes, while sold as a health measure, often serve as little more than a ploy to bolster municipal budgets.

The experience in Philadelphia is not unique but indicative of a broader pattern wherein the fiscal appetites of local governments overshadow the noble objectives of promoting health and reducing obesity. The misalignment of priorities raises questions about the efficacy and ethics of soda taxes as a health strategy.

Furthermore, implementing a national soda tax to stop cross-border shopping threatens to erode the principle of inter-jurisdictional tax competition. Such competition is a cornerstone of our federal system, allowing states and municipalities to tailor tax policies to their local economic conditions and fiscal priorities. As in ordinary markets, competition encourages efficiency and innovation in tax policies, as jurisdictions must balance the need for revenue with the desire to attract and retain taxpaying businesses and residents.

Proposals for a one-size-fits-all national soda tax would homogenize tax policies nationwide. A national soda tax overrides local governments’ fiscal policy decisions, undermining the diversity of approaches essential for policy experimentation and economic vitality. By flattening the tax-competition landscape, a national soda tax would not only miss the mark on improving health but also jeopardize the dynamic interplay of local governance that fuels our nation’s economic and social prosperity.

Like all selective consumption taxes, a national soda tax would restrict consumers’ choices and reduce their welfare. The U.S. experience with Prohibition, Denmark’s brief experiment with a fat tax, and New York City’s highest-in-the-nation excise tax on cigarettes also show that it would encourage the smuggling of untaxed soda from Canada, Mexico and other countries.

Clamping down on the inevitable increase in black-market activity implies more interactions between law enforcement and ordinary people. Those encounters can be violent—Eric Garner was killed by police in 2014 for selling untaxed cigarettes.

As we seek solutions to the obesity epidemic, it’s crucial to look beyond the simplistic and largely ineffective measure of taxing sugary drinks. Comprehensive dietary education, promoting physical activity, and improving access to healthy foods all represent strategies that address the root causes of obesity without resorting to regressive taxation that disproportionately harms low-income families and fails to deliver promised health benefits. Further public action may be unwarranted given the turn against soda by consumers—bottled water has been outpacing soda sales since 2016.

Soda taxes are bitter pills that fail to cure the disease they purport to fight. It’s time to rethink our approach to health and nutrition policy, focusing on measures that genuinely promote well-being without unduly burdening the public or misallocating scarce resources."

90% of worldwide COVID-19 deaths occurred in countries with high obesity rates

See We need to stop overlooking one politically incorrect COVID-19 death factor by Brad Polumbo of FEE. Excerpt:

"The United States has the 13th highest COVID-19 death rate relative to population. Many different factors shaped death rates in the pandemic. But there’s one uncomfortable reason that the U.S. likely experienced more COVID-19 deaths that has largely been ignored because it’s politically incorrect.

Out-of-control obesity rates and the “body positivity” movement predating the pandemic have left the U.S. population disproportionately vulnerable to COVID-19 compared to other countries. The U.S. ranks No. 12 in obesity worldwide, one of the highest rates among developed countries. One study found that 90% of worldwide COVID-19 deaths occurred in countries with high obesity rates.

COVID-19 is much more deadly for the elderly and those with preexisting conditions that weaken the immune system. One of those conditions is obesity. According to the Centers for Disease Control and Prevention, “Adults with excess weight are at even greater risk during the COVID-19 pandemic.” The CDC said that of the roughly 900,000 adult COVID-19 hospitalizations from the start of the outbreak to Nov. 18, 30% were attributed to obesity.

Meanwhile, a new study examining over 150,000 adults across 20 hospitals confirmed that obese people are much more likely to be hospitalized or to die from the virus. Severely obese COVID-19 patients were 61% more likely to die and 33% more likely to face hospitalization than their peers at healthy weights.

Unfortunately, this key factor driving high U.S. death rates has been quietly reported and largely overlooked. In woke culture, it’s considered too politically incorrect to point out that being fat is unhealthy, even as a pandemic is raging across the country and tragically claiming the lives of overweight people.

But the obesity problem in this country is real, even if we’re increasingly too scared to talk about it out loud for fear of being labeled “fatphobic.” According to Harvard’s School of Public Health, two-thirds are overweight, while one-third are “obese.” Meanwhile, among those age 2 to 19, 1 in 3 are overweight or obese.

As COVID-19 lockdowns and restrictions have trapped people in their homes over the last year, many have gained weight. A new American Psychological Association survey showed that 42% gained weight over the last year, an average of 29 pounds."

People with a BMI above 30 had a 113% higher risk for hospitalization due to Covid

See 'Weight isn't always within your control': Why some states are prioritizing obesity patients for the COVID-19 vaccine. By Adrianna Rodriguez of USA TODAY. Excerpt:

"Roughly 40% of adult Americans have obesity, according to Centers for Disease Control and Prevention data from 2018. Studies have shown people with obesity are more likely to have worse outcomes from COVID-19 than others with a lower body mass index (BMI).

Researchers at the University of North Carolina at Chapel Hill found people with a BMI above 30 had a 113% higher risk for hospitalization, a 74% higher risk for ICU admission and a 48% higher risk of death, according to a study published in August 2020 in Obesity Reviews.

At first, health experts believed people with obesity were more at risk for severe COVID-19 because the disease also is associated with numerous underlying risk factors including hypertension, heart disease, type 2 diabetes and chronic kidney and liver disease.

But after controlling for those factors, researchers found people with obesity were still at higher risk for COVID-19, said Dr. Rekha Kumar, medical director of the American Board of Obesity Medicine and associate professor of clinical medicine at Weill Cornell Medicine. This may be partly due to the excess fat tissue producing more inflammation, she said."

Covid-19 death rates 10 times higher in countries where most adults are overweight, report finds

By Lauren Mascarenhas of CNN.

"The risk of death from Covid-19 is about 10 times higher in countries where most of the population is overweight, according to a report released Wednesday by the World Obesity Forum.

Researchers found that by the end of 2020, global Covid-19 death rates were more than 10 times higher in countries where more than half the adults are overweight, compared to countries where fewer than half are overweight.

 

The team examined mortality data from Johns Hopkins University (JHU) and the World Health Organization (WHO) and found that of 2.5 million Covid-19 deaths reported by the end of February, 2.2 million were in countries where more than half the population is overweight.

 

In an analysis of data and studies from more than 160 countries, the researchers found that Covid-19 mortality rates increased along with countries' prevalence of obesity. They note that the link persisted even after adjusting for age and national wealth.

 

The report found that every country where less than 40% of the population was overweight had a low Covid-19 death rate of no more than 10 people per 100,000.

 

But in countries where more than 50% of the population was overweight, the Covid-19 death rate was much higher -- more than 100 per 100,000.

 

The researchers say that being overweight can also worsen other health issues and viral infections, like H1N1, flu and Middle East Respiratory Syndrome.

 

The World Obesity Forum suggests prioritizing those living with obesity for Covid-19 testing and vaccination.

 

"An overweight population is an unhealthy population, and a pandemic waiting to happen," the group writes.

 

In the US, close to three-quarters of the population is either overweight or obese, according to the US Centers for Disease Control and Prevention."

Cook County, Illinois Voters not Fooled by Soda Tax’s Empty Promises

By Michelle Minton of CEI.

"Less than two months after implementing a new “soda tax,” lawmakers in Cook County, Illinois, are repealing the cent-per ounce tax. The Washington Post and others paint it a “major victory for Big Soda,” but county residents recognized the tax for what it was: a bald-faced attempt to raise revenue off the backs of Chicago’s poorest residents. What they may not have realized is that the tax was also an attempt by public health advocates to use their city as a means to convince other, less liberal municipalities to follow their path. Luckily for the rest of the country, the effort has failed.

The Cook Country Board was split on the soda tax issue back in November, with the measure winning by just one vote. Two months later the Board finally reached a consensus: voting almost unanimously (15-1) to repeal the tax due to growing public pressure.

Public health advocates hoped the Chicago tax would be a launching pad for efforts in more cities, but the failure should take some fizzle out of their future plans.  While health nannies, like former New York Mayor Michael Bloomberg, who dropped at least $5 million defending the Chicago soda tax in the last six weeks, doubtless believe the failure is a win for industry, the actual winners are consumers in Chicago and the rest of the nation.

Public health advocates have long eyed soda or, as they like to call it, sugar-sweetened beverages, as a cause of obesity. Taxes on soda producers, which are almost always passed along to consumers, raise the purchase price of such beverages and supposedly deter people from buying them. But research into the issue of obesity does not bear out the idea that soda is, in and of itself, a major contributing factor to expanding waistlines—no more responsible than the consumption of other types of calories or reductions in physical activity.

A study published this year in the American Journal of Clinical Nutrition, for example, found that obesity rates in Australia increased despite significant long-term declines in sugar intake. As the authors noted, such findings “challenge the widespread belief that energy from added sugars or sugars in solution are uniquely linked to the prevalence of obesity.”

Furthermore, despite what health nannies like former Mayor Bloomberg want to believe, taxes on soda don’t appear to have much effect on population weight. As I’ve previously written, ongoing studies in Mexico—which enacted one of the world’s highest soda taxes—didn’t change the overall calorie consumption or weight of Mexican consumers. In fact, the purchasing and consumption patterns of families with obese heads of the house were the least affected by the tax.

What the tax in Mexico did do was funnel a lot of money—$1.3 billion in 2014—out of consumers’ pockets and into government coffers. Most disturbingly, it appears that a disproportionate amount of that money came from those with the least amount of money. Those in lower socioeconomic strata were the least likely to alter their purchasing behavior in response to the increased prices.

When health nannies can’t sell the public on the health benefits of soda taxes, they turn instead to convincing politicians of its revenue-generating potential. But, as Philadelphia’s now reviled soda-tax experiment demonstrates, the economic math rarely add up. Unlike Mexico’s tax, which was imposed on the entire nation, shoppers in one city with a soda tax can easily (if they’re wealthy enough to have personal transportation) buy their groceries—including soda—outside of the city limits. While Philadelphia’s tax did bring in $40 million dollars, the amount was far less than projected.

Furthermore, the decline in profits, which industry blames on the tax, led to layoffs at major beverage companies. That led many in the city to wonder if the money, which was partially used to fund a universal pre-k program, was worth the costs.

Voters aren’t fooled by rhetoric about revenue or health. Soda taxes are job killers and a stealth tax on the poor. Just ask Santa Fe Mayor Javier Gonzales, who had hoped to launch his big for governor of New Mexico on the back of his soda tax-funded preschool program. After voters roundly rejected the proposal, Gonzales abandoned plans to run, not only for governor, but also for reelection as mayor. Avaricious politicians should take note or the jobs killed by soda taxes might be their own."

Bad Food Data and Science Still Make for Bad Food Policy: USDA's diet guidelines are a mess because the information it uses is suspect

By Baylen Linnekin in Rreason. Baylen J. Linnekin is a food lawyer and an adjunct professor at George Mason University Law School, where he teaches Food Law & Policy. Visit his website here. Excerpts:

"Using data from 1971-2010, the researchers found that if the USDA data were correct, then a reference person (a hypothetical American established using algorithmic analysis of the data) would have lost nearly eighty pounds between 1971-1980 and also gained more than 215 lbs. between 1988-2010.

While such weight fluctuations aren't impossible, they're a rare occurrence at most."

"the time—that the federal dietary guidelines "and the research used to support that work... is so off base as to be scientifically useless.""

""These results demonstrate that the USDA's caloric data are meaningless and should not be used to inform public policy," Archer told me this week by email."

the push to adopt laws that seem to contravene what data tells us about those laws—namely, that they are uniformly bad ideas—continues headlong.

One recent example— menu calorie labeling—illustrates this point. A new study by NYU researchers reports that menu calorie labeling is a totally ineffective tool for helping consumers make lower-calorie food choices. That's just piling on. The fact that menu labeling doesn't achieve its goals is nothing new.

The data don't support it, yet mandatory calorie labeling is coming to chain restaurants, vending machines, and movie theaters (and, likely, grocery stores and pizza parlors) in every state in the land in mere months.

Data supporting soda taxes as a tool to combat obesity is virtually nonexistent. Yet cities proceed to adopt them.

The FDA's own data on the likely impact of the Food Safety Modernization Act (FSMA), as I detail in my new book, Biting the Hands that Feed Us: How Fewer, Smarter Laws Would Make Our Food System More Sustainable, shows these bad rules clearly aren't worth their enormous cost.

[T]he FDA's own estimates predict these rules could—if implemented to absolute perfection—reduce foodborne illnesses by a maximum of 1.23 million cases. That would represent just a 2.6 percent reduction in total foodborne illness cases. Again, this is the FDA's own best-case scenario for the impact of these two key rules.

Relying on bad data to justify food and dietary laws is as absurd, indefensible, and unscientific as it sounds. If we can't trust the government to base those food laws and policies that call for science on actual, you know, science, then maybe that's evidence the government should have far less power to craft those laws and policies in the first place."

Why the World Health Organization is Wrong on Soda Taxes

WHO's proposal that countries enact steep fees globally is wrong and unjustified.

By Baylen Linnekin, writing for Reason. Baylen J. Linnekin is a food lawyer and an adjunct professor at George Mason University Law School, where he teaches Food Law & Policy. Visit his website here. Excerpts:

"Earlier this week, the World Health Organization (WHO) released a report, "Fiscal Policies for Diet and Prevention of Noncommunicable Diseases," that suggests countries around the world should enact exorbitant taxes on soda—as high as 50 percent—"and other foods and beverages high in sugar, salt and fat" as a means of combating obesity and other diet-related diseases. The report also urges governments to adopt subsidies to make fruit and vegetables less expensive to purchase."

"A Los Angeles Times piece this week on the new WHO report notes several popular and on-point critiques of soda taxes, including issues of "fairness (consumption taxes are a bigger burden for poor than rich people), freedom (the government shouldn't interfere with your personal choice of what to drink), trust (officials won't spend the tax revenue the way they say they will) and economics (small business will be harmed if taxes discourage sales)."

Earlier this year, in an April bulletin, the WHO seemed far less certain of the impact of soda taxes on obesity, arguing that "pricing policies can influence purchasing patterns and have an impact on dietary behaviour," without claiming that such taxes could or would lessen obesity rates. "Time will tell whether the tax helps to reduce obesity prevalence as well," the WHO wrote at the time, of Mexico's tax.

It could be a long time.

One of Mexico's chief soda tax proponents, Dr. Juan Rivera Dommarco, director of the Mexican Research Centre in Nutrition at the National Institute of Public Health, admitted that soda taxes—even if they work—won't be impacting eating habits or health anytime soon.

"The results in terms of a real reduction in obesity and increase in healthy consumption habits will not show immediately," he said.

A WHO expert, Dr. Gojka Roglic, WHO medical officer, said it could take "five years or more" for any potential changes in obesity rates to appear.

These less-than-impactful predictions about the impact of soda taxes on obesity occurred as data showed soda consumption in Mexico had fallen in the wake of the tax. But, as I wrote earlier this year, if soda consumption fell after Mexico's law took effect, it began to rise again shortly afterwards. That's not what a successful policy looks like.

What's more, while the new WHO report calls for "economic tools that are justified by evidence," the report admits there's "[l]imited evidence"—or what the report charitably characterizes as an "evidence gap"—that "target[ing] sugar-sweetened beverages" will impact non-communicable disease outcomes.
So just what did the WHO recommend, earlier this year, as an effective strategy to combat obesity? It wasn't soda taxes.

"WHO recommends other price policies such as subsidies for, or lower taxation of, healthy food as well as initiatives to encourage people to eat a healthier diet, avoid tobacco and be more physically active," the body wrote in its April bulletin.

The need to combat obesity using methods other than soda taxes echoes an independent 2014 report from McKinsey. That report, which notably used WHO methodologies, found that a tax on foods that are high in sugar or fat ranked near the bottom in terms of its cost-effectiveness and potential impact as a programmatic lever in the fight against obesity.

There's no doubt that obesity is a problem in the United States and elsewhere. It's one I don't claim to know how to solve. I've argued before that we should stop using taxpayer money to encourage the growth and production of sweeteners by eliminating farm subsidies and/or tariff protections for those who grow crops—particularly sugarcane, sugar beets, and corn—that are turned into those sweeteners. (While we're at it, I'd also eliminate all other farm subsidies and food-related tariffs.)

If that in turn makes sugar, soda, cookies, candy, energy drinks, and other sweetened foods and drinks more expensive, then consumers can choose to adjust their consumption habits accordingly, without having been taxed to support the production of those sweeteners in the first place.

We shouldn't be taxed to encourage farmers to grow crops that become sweeteners. And we shouldn't be taxed for consuming the foods we encouraged those farmers to grow, either. Unlike the WHO report, there's no "evidence gap" in that reasoning."

Real world “sin taxes,” largely failed to meaningfully alter consumer behavior

See Soda Tax Won't Fix Waste and Corruption in Philly by Michelle Minton of CEI.

"In a study published this week by the Competitive Enterprise Institute, we found that real world “sin taxes,” aimed at curbing consumption of sugary foods and drinks largely failed to meaningfully alter consumer behavior. Most notably, the peso per liter (or 10 percent) tax enacted in Mexico in 2014 at first seemed to reduce soda sales, but a recent survey of 8,000 households found no effect on weight. Most surprisingly, researchers found that lower income families and homes with an obese head of household were least likely to reduce consumption of soda in response to the tax. And Mexico is not unique; numerous other studies find that soda taxes, even as high as 40%, were associated with only the smallest change in weight after a year. People who switched from soda to another beverage usually substituted it with equally high-calorie products."

Obesity: The New Hunger

The government obsession with ‘food insecurity’ obscures the real problem: Americans are too fat.

By Robert Paarlberg, writing for the WSJ.

"Each May, private charities in Boston organize a “Walk for Hunger” to help the Massachusetts households—one out of every 10, we’re told—that require “hunger relief.” A national organization of food banks named Feeding America promotes its own work by asserting that “1 in 7 Americans struggle to get enough to eat.” A 2015 ad campaign sponsored by Great Nations Eat warned that “America Can’t Be Great on an Empty Stomach.”

Empty stomachs? A well-meaning concern, but poor Americans have now joined the ranks of the overeaters. Food-assistance programs need to catch up.

When Boston’s Walk for Hunger began in 1969, poverty still meant not getting enough to eat. Investigations turned up scandalous levels of hunger in rural Appalachia. Under-nutrition often brought serious diseases such as scurvy and rickets. In response, the federal government dramatically expanded food-assistance programs, and rates of low nutrition dropped.

Today, obesity is the problem. Some 38% of Americans are obese, the Centers for Disease Control and Prevention reported last fall, compared with about 12% in 1969. The statistics are worse among the poor. Obesity rates in America’s poorest counties are roughly 12% higher than the national median. About 42% of Hispanics are obese, as are 48% of African-Americans, according to the CDC.

As actual hunger has faded, advocacy organizations have switched their pitch from hunger to “food insecurity.” Every year, the Agriculture Department asks a sample of households 10 questions, such as if they had failed to eat or worried about running out of food for lack of money at any time in the previous 12 months. Households that answer “yes” to three of the 10 are classified as “food insecure.” A “yes” to six or more counts as “very low food security.”

Using this method, the department concluded in a 2015 report that 14% of American households were “food insecure,” and 5.6% had “very low food security.” These aren’t measures of hunger or under-nutrition, but advocacy groups and the media nonetheless depict them as such. The survey results are also referenced to suggest that many Americans face food insecurity on an average day, even though the percentages actually measure those who experienced it on any single day in the past year. On a typical day, fewer than 1% of households have very low food security, but readers of the USDA report don’t learn this until page 10.

Micronutrient deficits can be hard to detect, and they can coexist with obesity, but data have shown for some time that nutrient intake in America is roughly comparable for poor and non-poor Americans. A 1995 Agriculture Department report showed that the average intake of vitamins, minerals and protein was similar for children in poverty compared with those who were not. In most cases, both groups took in considerably more than the recommended daily allowance.

There is no serious racial divide either. Only 0.5% of blacks are deficient in Vitamin A, compared with 0.3% of whites, according to the National Report on Biochemical Indicators of Diet and Nutrition. Deficiencies of many other core nutrients, like vitamin E, B12 and folate, are comparably low.

The Agriculture Department continues to hype “food insecurity,” because this strengthens political support for the nutrition programs it administers. These programs deserve support, but in light of the obesity crisis they also need reform. The $74 billion a year Supplemental Nutrition Assistance Program—also known as food stamps—still allows recipients to purchase candy and soda with their benefits. Congress should halt SNAP spending for these “foods,” and it could do so without reducing the dollar value of the benefit.

You might expect advocates for low-income and minority Americans to support this idea, since these groups suffer the most from obesity-linked medical problems. Not so. In 2010, when New York City Mayor Michael Bloomberg proposed excluding soda from SNAP purchases, advocates for the poor joined beverage companies in opposing the change. New York City’s Coalition Against Hunger rebuked the Mayor for “telling low-income Americans that they are uniquely unsuited to make decisions about what is best for their own health.” The Agriculture Department rejected the Bloomberg proposal on technical grounds.

Hope for reform remains. In January the bipartisan National Commission on Hunger recommended unanimously to Congress that sugar-sweetened beverages be removed from eligibility under SNAP. Anti-hunger groups and the minority community should endorse this consensus. Poor Americans need their incomes to rise, but very few need to consume more food. It made sense to walk for hunger in 1969, but today Americans should walk for health and to fight obesity.

Mr. Paarlberg is an adjunct professor of public policy at Harvard. This op-ed is adapted from his book “The United States of Excess: Gluttony and the Dark Side of American Exceptionalism” (Oxford University Press, 2015)."

The exoneration of dietary fat

From Matt Ridley.

"For both obesity and heart disease, saturated fats are not the problem

 

I have published two articles this week on the crumbing of the dogma that fat is bad for you. This was in the Times:

Britain’s obesity tsar, Susan Jebb, says that it is not fair to blame fat people for their failure to lose weight. Genetically predisposed, many people cannot realistically lose weight by eating less, especially when the food industry tempts them with snacks. Meanwhile, George Osborne is slapping a tax on sugar to tackle obesity.

The new obsession with sugar definitely makes more sense than the low-fat sermons we have heard for decades. And the prevailing idea in the public-health industry that you get fat simply by eating more calories than you burn is misleading to say the least. While of course that’s true, it says nothing about what causes appetite to exceed need by the tiny amount each day that can turn you obese.

The crucial thing is satiety. If some foods make you feel full quicker or for longer, then they will prevent you over-eating. Moreover it is easily possible, indeed likely, that people are less satiated when they eat carbohydrate than fat.

As I argued in these pages two years ago in respect of heart disease, scientists are performing a screeching U-turn on dietary advice, away from demonising fats and towards demonising carbohydrates. In the case of obesity, they cannot quite bring themselves to admit it. They want to tell us not to eat sugars, yet they won’t exonerate fat.

This is typical in science. When paradigms break, you rarely hear scientists say: “We were wrong.” They tiptoe away from their previous position. Yet this has been a costly mistake. “Getting the wrong answer on such a huge and tragic scale borders on the inexcusable,” the writer and diet critic Gary Taubes has written.

Taubes and the investigative journalist Nina Teicholz have catalogued not just the emptiness of the evidence linking dietary fat with health problems, but the politicking and jealousy that has kept heretic researchers off the key committees in the world of dietary advice. They are still treated as pariahs, even as more and more scientists quietly adopt their position. This month, Teicholz was disinvited at the insistence of fellow speakers from a slot speaking at America’s National Food Policy conference. They don’t want her argument heard that too many scientific findings are being systematically ignored in the US Dietary Guidelines, which still recommend replacing fat with carbohydrates.

In the science behind food advice it is mad simply to put both sugar and fat in the “bad” category. Telling people to eat less sugar and refined carbohydrates, while still telling them to eat less fat, is not going to work. You cannot eat less of both without eating too much protein, which is not affordable, practical — or healthy. The shelves of supermarkets are still groaning with low-fat foods; the websites of diet preachers are still calling for people to eat less saturated fat as well as less sugar. Fast food, so hated by the kale-and-quinoa crowd, is often described as full of “fat and sugar”.

Yet the science is now crystal clear that eating lots of fat is actually less likely to make you fat than eating lots of carbohydrates. Around 1980 much of Britain, following America, started to cut saturated fat out of the diet — and a few years later, obesity, far from declining, suddenly began increasing. There is a good physiological reason for this. The pancreas reacts to high levels of glucose in the blood by secreting more insulin to regulate the blood glucose level. Insulin encourages the body to burn sugar rather than fat for energy. But insulin also orders fat cells to accumulate fat (made from sugar in the liver) for later use. So the more sugar you eat, the more fat gets laid down and the less gets burnt off.

Eventually, having too much fat reduces the sensitivity of the body to insulin. The body reacts by making more insulin. High insulin levels for longer mean more fat being laid down and eventually type 2 diabetes. As Gary Taubes has argued, we knew all this in the 1930s — or at least German-speaking scientists did — and saw obesity as a consequence of hormonal defects. The idea that it was just about eating too much came later. Yet to this day the World Health Organisation opines: “The fundamental cause of obesity and overweight is an energy imbalance between calories consumed and calories expended.”

We probably know enough to justify discouraging the consumption of sugar through the tax system. That should be accompanied by re-encouraging fat eating. We must also take care not to declare premature certainty about sugar. A bit of humility would not come amiss.

Let’s face it: we do not know for certain why some people are obese and others not. The easy availability of plentiful food, especially sugars, is part of the story, as is less exercise. Yet we all know people who stay thin whatever they eat or do. The rise of high-fructose corn syrup as a sweetener coincides well with the upsurge of obesity in the 1980s, and fructose is digested in the liver, where it possibly interferes with insulin sensitivity even more than glucose. Do we know for sure that fructose is especially bad? No.

There could be all sorts of reasons why some people are more susceptible to obesity than others. Consider an extraordinary experiment conducted at Washington University in St Louis a few years ago. A pair of genetically identical twins, one of whom was obese and one of was not, donated samples of their gut contents to some genetically clonal mice whose guts had been stripped of all bacteria. The mice that received the fat twin’s gut flora grew fatter than the ones that received the thin twin’s gut flora. Perhaps some people have a mixture of gut bacteria that alters their appetite or their insulin reactions, and perhaps something about our lifestyles or the medicines we take has altered our gut flora.

Whether obesity is caused by unbalanced gut flora, or susceptible genetics, or the effects of fructose, or something else, there is every chance that Susan Jebb is right that we should not blame lack of willpower. Meanwhile it is worth remembering that obesity is nothing like as bad as it was forecast to be by now, and is not currently getting worse. The prevalence of obesity in Britain doubled in the 1990s. For the past ten years, in defiance of predictions, it has remained about the same — roughly a quarter of adults are obese."

From Coke to Coors: A Field Study of a Fat Tax and its Unintended Consequences

Click here to see the abstract.

"Brian Wansink

Cornell University

Andrew S. Hanks

The Ohio State University

John Cawley

Cornell University - College of Human Ecology, Department of Policy Analysis & Management (PAM); Cornell University - College of Arts & Sciences, Department of Economics; University of Sydney - School of Economics; National University of Ireland, Galway (NUIG) - J.E. Cairnes School of Business & Economics; NBER; IZA

David R. Just

Cornell University - Dyson School of Applied Economics and Management

July 29, 2014

Wansink, Brian, et al. "From Coke to Coors: a field study of a sugar-sweetened beverage tax and its unintended consequences." Available at SSRN 2079840 (2012).

Abstract:     

Could taxation of calorie-dense foods such as soft drinks be used to reduce obesity? To address this question, a six-month field experiment was conducted in an American city of 62,000 where half of the 113 households recruited into the study faced a 10% tax on calorie-dense foods and beverages and half did not. The tax resulted in a short-term (1-month) decrease in soft drink purchases, but no decrease over a 3-month or 6-month period. Moreover, in beer-purchasing households, this tax led to increased purchases of beer. To behavior scholars, this underscores the importance of investigating unexpected substitutions. To public health officials and policy makers, this presents an important empirical result and more generally points toward wide ranging contributions that marketing scholarship can make in their decisions."

Why a Soda Tax Is Unlikely to Work

From Marc F. Bellemare.

"Several European countries also tax sugary drinks, but, as with Mexico, it’s tough to tease out whether, or how much, the taxes affect consumption. Marc Bellemare, assistant professor in the department of applied economics at the University of Minnesota, took a close look at soda sales data (from Euromonitor International, which tracks sales of an astonishing array of food items around the world). He concluded that, depending on how you parse the data, you could claim anything from no impact to about a 2.6 percent decrease.

“In academic parlance, the results are not ‘robust,'” Bellemare says. …
The lack of a clear correlation doesn’t mean sugary drinks aren’t implicated in obesity and disease. … We cannot be sure, not by a long shot, that a tax on soda will result in improved public health."

"The data lent themselves to a nice difference-in-differences analysis, given the variation over time and across countries in the adoption (and, in one instance, disadoption) of sugar taxes. If you buy the parallel trends assumption, at best, I found a 2.6 percent decrease in the logarithm of liters of soda sold per capita; at worst, I found no statistically significant relationship between taxes and soda. When looking at the level (i.e., liters per capita, instead of the log of liters per capita), I also found no relationship. This is what I wrote to Tamar:

In the best-case scenario, I find that taxes decrease sales of soda per capita very, very slightly (on the order of 2.6 percent per year, or about four and half 12-oz cans of soda per capita, which is less than many Americans drink per week). In the worst-case scenario, I find no statistical significance, meaning that for all intents and purposes, the effect is zero.

In academic parlance, the effects are not “robust,” and so I would not stake any money on such policies having an actual effect in practice. This is especially so given that even when significant, the effect is still very small. The reason why I don’t have a unique answer for you is that there are several ways of looking at the problem, and I have accounted for all possible specifications of the equation of interest, given the data you sent me.

The fact that those taxes have no (economically and, often, statistically) significant effect is unsurprising. One, even in the US–which consumes way, way more soda than Europe in per capita terms according to the Euromonitor data–soda represents a minuscule share of the average consumer’s budget. Two, from casual empiricism, the demand for soda strikes me as relatively inelastic; there are few substitutes for sweet, fizzy drinks: club soda does not contain any sugar, fruit juices aren’t fizzy, and many people cannot stand the taste of diet sodas.

(Tamar spoke to a number of other economists for her article. In his post on the topic, Jayson generously referred to those of us quoted in the article as “a slew of top food and agricultural economists,” which I imagine is what it feels like if George Clooney tells you that you’re handsome.)
So, notwithstanding what some people in the public health community seem to to take as an article of faith, taxing soda is unlikely to help with this country’s (or any other country’s, for that matter, given my European estimates) love affair with obesity, though it is certainly likely to contribute to the revenues of governments that levy a tax on soda.

In that sense, it is absolutely no surprise that some politicians seem to love soda taxes:

1. Cater to your base by looking like you’re doing something for public health (“Think of the children!“)
2. Make money
3. ???
4. Profit!

What’s there not to love?

Generally speaking, much like the obsession with local and organic foods as instruments of public policy, the use of soda taxes often feels to me as a tactic used by some among the wealthy and educated, who are much more likely to abstain from drinking soda,* to wage a proxy culture war on the poor and uneducated, who are more likely to consume soda–but that’s a topic for another, future blog post.

* This describes me, too. The difference is that, based on the evidence at hand, I just don’t believe there is an economic case for soda taxes, though there certainly appears to be fiscal and political cases for them. And with all of that said, I am a firm believer in the claim that sugar is the root of all evil when it comes to obesity!"

Socially Engineering Food Choices Doesn't Work

To say that Los Angeles merely failed would be putting it mildly

By Baylen Linnekin of Reason. He is the executive director of Keep Food Legal Foundation and an adjunct professor at George Mason University Law School, where he teaches Food Law & Policy. Excerpt:

"Earlier this week, the nonpartisan RAND Corporation released a study that helps demolish the argument that governments (cities, in this case) can socially engineer away residents’ obesity by restricting food freedom.

he study, funded by the National Cancer Institute, focuses on a ridiculous, controversial, seven-year-old zoning ban on new fast food restaurants in South Los Angeles. To say that the measure merely failed would be putting it mildly.

“Since the fast-food restrictions were passed in 2008, overweight and obesity rates in South Los Angeles and other neighborhoods targeted by the law have increased faster than in other parts of the city or other parts of the county,” reads a RAND press release on the study.

Well then.

“The South Los Angeles fast food ban may have symbolic value, but it has had no measurable impact in improving diets or reducing obesity,” said lead author Roland Sturm of RAND.

The RAND study results represent some of the best evidence to date that policies that restrict food freedom do no make people healthier. The failure and repeal of Denmark’s so-called “fat tax” and damning research on mandatory menu labeling are two other convincing examples.

They also echo—and magnify—the results of an earlier RAND study by Sturm that I wrote about here in 2013. The earlier study, which also looked at the Los Angeles fast-food ban, was funded by the National Institutes of Health.

“Obesity in South Los Angeles, 30 percent in 2007, had climbed to 33 percent by 2012 despite the ban on new fast food restaurants,” I noted in my column while discussing the larger implications of that earlier RAND study.

The new study’s release is fortuitous, coinciding as it does with a flurry of increased scrutiny over an ongoing FDA proposal to mandate an “added sugar” label on packaged foods."

Does A Soda Tax Reduce Obesity?

See Slim Odds: Empirical studies provide little evidence that soda taxes would shrink Americans’ waistlines by Jonathan Klick (University of Pennsylvania School of Law)and Eric A. Helland (Claremont McKenna College). Excerpt:

"The most sophisticated research in this field using actual state soda taxes to identify the effect of such taxes on obesity is done by Jason Fletcher, an economist at the Yale School for Public Health, and co-authors. Fletcher et al. have examined the effects of taxes on consumption and ultimate weight effects for both adults and children. During the period 1989–2006, an average of 21 states taxed soda, with an average rate ranging from 4.1 to 5.1 percent. In a research paper published in the Journal of Public Economics, Fletcher et al. used panel data methods to account for baseline differences across states (e.g., people are generally fatter in Pennsylvania than in Utah) as well as underlying national trends. Controlling for those factors, the researchers found that a one percent increase in the soda tax leads to a five percent reduction in calories consumed from sodas among young people age 3–18. While this result is statistically significant, Fletcher et al. call the reduction “modest” because sodas are only a small part of the average person’s total caloric intake.

Interestingly, the researchers did not find that the children substituted toward diet sodas or water, as is generally assumed by proponents of sugarsweetened soda taxes. Instead, they found that the 6-calorie reduction in soda consumption is accompanied by an 8-calorie increase in milk consumption and a 2-calorie increase in juice and juice drink consumption. That is, any obesity-related benefit of decreased soda consumption that comes from a soda tax is, on average, more than offset by increased caloric consumption from other beverages. As expected, given these results, when the researchers directly examined data on the body mass index of the children in their dataset, they found no statistically significant effect of soda taxes on body weight or the likelihood of being obese or overweight. In fact, although the results are not significant, they found a positive relationship between increases in soda taxes and these metrics."