Subsidizing fat: how the 2012 Farm Bill can address America's obesity epidemic.

AuthorFoster, Julie

INTRODUCTION I. AGRICULTURAL LEGISLATION AND FOOD PRICES A. How Farm Bill Legislation Attempts to Implement Agricultural Policies B. Principal Methods of Price Control 1. Income Supports 2. Acreage Reduction 3. Marketing Agreements, Processing Taxes, and Licensing Requirements 4. Nonrecourse Loans 5. Production Flexibility Contracts and Direct Payments C. Current Status of Agricultural Production Legislation II. RECOMMENDATIONS FOR A TWENTY-FIRST CENTURY FARM BILL A. End Price Supports B. Decouple Income Supports from Production Capacity C. Promote Polyculture D. Amend Conservation Program Benefit Calculations E. Influence Consumer Choice III. LEGAL HURDLES TO IMPLEMENTING REFORM RECOMMENDATIONS A. Due Process Challenges to Proposed Legislation B. Regulating Agricultural Use of Land and Just Compensation C. Congressional Authority to Regulate Agricultural Production and Consumption 1. Limits on Congress's Commerce Clause Authority After Lopez and Morrison 2. Regulating Consumption Under the Taxing and Spending Clause CONCLUSION INTRODUCTION

On a bus in West Philadelphia, a woman feeds her baby an artificial orange beverage from his bottle. The drink costs much less than baby formula, partly because it is mostly comprised of corn--the largest beneficiary of U.S. agricultural subsidies. (1) Currently the least expensive food available is also the most caloric and the least nutritious: a dollar's worth of cookies or potato chips yields 1200 calories, while a dollar's worth of carrots yields only 250 calories. (2) A savvy shopper seeking to satiate her family will naturally seek out these more caloric but less nutritious items. (3) The sticker price is a small fraction of the true cost of highly processed foods, which contain excessive amounts of sodium, fat, and calories that contribute to an estimated $147 billion in annual healthcare costs. (4) Moreover, these products are artificially cheap because their production is subsidized with tens of billions in taxpayer funds each year. (5) Federal agricultural subsidies have provided Americans with high-calorie, low-nutrient processed foods that are less expensive and more readily available than whole grains and produce. (6) Until very recently, poverty was associated with emaciated faces and rail-thin limbs, but today malnutrition persists despite an abundance of cheap calories. (7) Our nation is in the midst of an obesity epidemic that is not only a question of weight, but also implicates serious health conditions caused by poor nutrition such as heart disease, diabetes, and some types of cancers. (8) The next generation of Americans may be the first in history to have a shorter lifespan than its parents. (9)

The national obesity epidemic is a multifaceted crisis with many factors that go beyond the scope of this Comment. (10) Similarly, the 2008 Farm Bill is omnibus legislation spread across more than a dozen titles in the United States Code, spanning everything from food stamps and school lunches to environmental conservation and agricultural research. (11) This Comment evaluates how programs intended to support farm prices and income influence producers and consumers. (12) Commodity production (13) is at the core of the obesity epidemic because highly processed foods and meats are mostly comprised of subsidized corn, soy, and cereal grains. (14) While domestic production (15) and food price are not the only factors contributing to the problem, this Comment questions the value of using the third-largest federal benefits program (16) to reduce the cost of commodities that contribute to $147 billion in annual obesity-related health costs. (17) The issue of obesity has been well addressed by social scientists and natural scientists, by writers and food advocates. (18) Yet legal scholarship on agriculture has focused entirely on environmental or international trade issues without addressing how federal legislation impacts what farmers decide to plant and what people choose to eat. (19) This Comment recommends legislative action for the 2012 Farm Bill to make fruits, vegetables, and whole grains comparatively less expensive than unhealthy processed foods and meats.

Part I evaluates past and current legislation that was designed to impact food production and prices. Farm legislation has focused on controlling the supply or price of agricultural commodities through income supports, acreage reduction programs, marketing agreements and processing taxes, nonrecourse loans, and direct payments. Each of these methods is explained and evaluated with respect to how it creates incentives to plant particular crops. Part II proposes future legislation to realign production incentives with modern consumption needs. Part III addresses the potential legal hurdles to implementing the suggested legislation: whether eliminating benefits programs might give rise to due process concerns; whether regulating agricultural land use might degrade property values to create a regulatory takings issue; whether Congress has authority to impose the recommended regulations in light of the Commerce Clause limitations articulated in United States v. Lopez; (20) and whether the tax and spend powers of Congress may again be relied upon after Wickard v. Filburn. (21)

Price supports and acreage allotments have increased surpluses and decreased prices; these measures should not continue. In order to reduce consumption of unhealthy foods and support farm income, farm payments must be entirely decoupled from production, programs must encourage product diversification, (22) and highly processed foods must be priced to reflect the true costs they impose on the public. Agricultural reform can address the food challenges of the twenty-first century: rather than increase the quantity of available food, agricultural legislation must increase the quality of affordable food. By decoupling income supports, ending acreage reduction and limitation, and using taxes to impose the true cost of food on processors and consumers, the 2012 Farm Bill can help remedy the obesity epidemic.

  1. AGRICULTURAL LEGISLATION AND FOOD PRICES

    Farm programs were initiated to stabilize crashing farm prices and support family farmers who would otherwise have been bankrupted in the midst of the Great Depression. (23) However, farm programs have consistently caused commodity prices to fall, because the support of program crops encourages their overproduction. (24) The government guarantees a minimum price for program crops, creating a compelling incentive to grow more of these crops because government subsidies negate the risk of market collapse. (25) As the supply increases, prices fall. (26) This problem of excess supply was the problem that the first farm bill, the Agricultural Adjustment Act of 1933, (27) was intended to remedy, but the problem of perpetual surplus has persisted through the twenty-first century. (28)

    Rather than stabilize minimum farm prices, farm programs have resulted in decreased commodity prices. The average cost of production is twenty to forty percent below the prices received for program crops, meaning that commodity subsidies directly contribute up to one-third of the price reduction. (29) For example, in 2000 farmers spent an average of $2.72 to produce a bushel of corn with a market value of $1.77. (30) Farmers continue to produce corn because government payments exceed the difference, generating a one percent net income for the farmer regardless of the actual market price. (31) The reduction in the price of commodity crops has harmed consumers by encouraging overproduction of corn, wheat, rice, and soy. (32) In response to the overabundance of these crops, manufacturers have found inventive ways to process these commodities, creating unhealthy foods that are highly processed concoctions of many unpronounceable ingredients created in a lab. (33) Farmers who grow fruits and vegetables are not subsidized, and are ineligible even for most conservation programs, because they do not grow program crops. (34)

    Contrary to the legislation's purpose, (35) agricultural subsidies do not support small family farmers; real farm income has declined since the 1970s. (36) Further, the majority of subsidy payments goes to large farms with annual revenues of more than half a million dollars. (37) Thus, both consumers and small family farmers are harmed by the artificial deflation of commodity prices. (38) Farm Bill reform can provide a remedy to the nutrient-scarcity problem that has resulted in an epidemic of obesity, diabetes, and heart disease. (39)

    1. How Farm Bill Legislation Attempts to Implement Agricultural Policies

      Agricultural subsidies focus on "base crops" for pragmatic reasons. (40) The first national system of agricultural supports was the Agricultural Adjustment Act of 1933, enacted in response to the Great Depression. (41) The federal government paid farmers for each acre of base crops they took out of production. (42) The initial commodities included corn, wheat, rice, cotton, tobacco, milk, and hogs. (43) The government targeted these products because they had significant surpluses and the market demand of these commodities affected the prices of others. (44) For example, the price of corn impacts the price of beef and poultry, since corn is the primary feed for industrial-scale meat production. Further, each of the program crops had to be processed before they reached the consumer, making the inputs easier to regulate. (45) The first farm bill managed the market supply by imposing processing taxes, licensing requirements, and marketing quotas on processors and handlers (such as grain elevators). (46) This legislation was among the first New Deal statutes to be declared unconstitutional. (47) However, it was not the tax itself that was deemed unconstitutional in Butler v. United States, but the fact that the proceeds of the tax funded payments to farmers who reduced the acreage used to produce...

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