Monday, May 03, 2010

On local, healthy food.

Preamble

So, recently, Liberal leader Michael Ignatieff proposed developing a national policy for providing healthy, local food to Canadians. (Couldn't find a link to anything on the party site, so here's a Toronto Star article. Maybe I just don't spend enough time on the Liberal Party's website, but I couldn't find a section on issues or policies or anything equivalent.) Since substance seems a bit thin on the ground, I thought I'd discuss what such a policy should look like -- and then later we can see if Ignatieff et al manage to live up to it.

There's obviously three points here. First, the local part. Second, the food part. Third, the health part. In order, then.

The Local Part

It seems against market logic to compel the purchase of local food. This is a long argument (one progressives and others on the left haven't necessarily absorbed), but let me just summarize it. Centrally-planned economies, unless very small-scale (I'm thinking household and smaller), are horrifically inefficient, and unable to achieve their own goals, let alone any reasonable goals. So, for example, if you're attracted to central planning because you want to ensure everyone gets the goods that they need, you have to face the fact that there's no incentive in a centrally-planned system to ensure that this actually happens. A centrally-planned system oriented towards need would depend on the good will of the central planners. You don't have to be nearly as cynical as I am to see how that's just a little bit of a problem. In a market system, by contrast, there are clear incentives: producers are motivated to create as many goods as they can in order to profit, and consumers are motivated to manage their resources efficiently, in order to obtain as much as they can. The collision of these two incentives plus the signalling function performed by prices should, in a fair market, get everyone at least what they need, as well as a substantial proportion of what they want.

Key here, of course, is that the market must be well-functioning; or (same thing), fair. This means, amongst other things, that every cost must be internalized to market transactions (i.e., that everything which is a burden is assigned a price proportional to the burden, and the price is paid in full by one or more participants in the market), and that every participant in the market is equal, in the sense of not being unduly advantaged, in comparison to other participants.

The first, I think, takes care of the worry that some jurisdictions favour local industries -- this is particularly true when it comes to food -- with things like tax breaks and government subsidies. If every cost must be internalized, then these breaks and subsidies must be factored in when allowing producers to move into a new jurisdiction. So, if a meat packer from Georgia wants to sell in Ontario, that meat packer must pay a duty equivalent to the subsidies and tax breaks he has received in Georgia, such that local Ontario meat packers are not left at a relative disadvantage. (Or, to say the same thing a different way: Ontario meat packers should get equivalent subsidies and tax breaks. I'm less in favour of this as a solution as it seems to create a race to the bottom and suck the tax base dry.) This would also cover things like pricing fossil fuels consumed in food production, and other environmental effects. The point is that we should actively internalize all real costs of food production into the food market. Right now, we're letting some costs -- environmental costs are the big ones -- fall outside the market, and thus onto society at large to take care of. (Or, really, to not take care of and hope they won't be nearly as bad as smart people are telling us they will be.)

The second, I think, takes care of the worry that a national food policy might serve as an excuse for protectionist propping-up of failing industries. (See industry, auto, American for an example.) The complex interplay of incentives and patterns of production and consumption in a fair market will breed some (not perfect, but some) innovation: the producer that doesn't innovate will eventually lose the competition. If we were to manipulate the market such that local producers -- of food, in this case -- had an advantage simply by virtue of being local, then we would be unfairly favouring local producers and, worse, harming local consumers (by depriving them of the most innovative, efficient, etc. means of food production). If a local producer earns an advantage -- perhaps some fruits and vegetables (I couldn't tell you which ones) happen to grow exceptionally well in Ontario -- then that producer should keep that advantage, and will likely be able to outcompete foreign producers. But local producers shouldn't be handed these sorts of advantages. After all, there may well be certain foods that non-local producers are just better at making, in the sense of being more efficient, having a longer growing season, being less exposed to diseases, innovating better technologies, etc, etc.

Necessarily, this will mean that some segments of the local food market will fail, even given that we are fair in our pricing (so, things like distance travelled, fossil fuels consumed, subsidies, tax breaks, etc. would be factored in) and fair in allowing competitive advantage. I'm not sure why that's a bad thing, though. Some might argue it's a matter of protecting local jobs, but protecting local jobs isn't done well by keeping a failing producer afloat. Protecting local jobs is done best by allowing workers the ability to move to new jobs when old jobs vanish, which is done best by ensuring workers are well-educated to take advantage of new opportunities, that the market functions well in producing new opportunities, and that business failures don't take down large segments of the economy. Dumping money into a local company "to keep local jobs" is foolish (economically) and harmful (morally). (I do acknowledge that a minimum income scheme is probably the fairest way to achieve the protection of local jobs, above and beyond the points mentioned above. But I don't think that's politically viable around here, for some odd reason best left to a psychiatrist's gentle touch.)

The Food Part

Lots of people don't have enough to eat. That shouldn't be a surprise. What seems to surprise many is that it's at least not clear that we don't have enough food; there are reasons to think that our food supplies are (in principle) more than sufficient to provide everyone with enough to eat. With Amartya Sen, I take the real problem to be a problem of entitlements. That is, people who don't have enough food to eat don't have enough food because they can't compete economically with those who have enough (including those who have more than enough). In all societies, this will include the ability to purchase food at market prices. In societies other than Canada, the entitlement problem might be solveable by providing the means to grow one's own food, apart from the ability to purchase it directly, but given that, at least in Canada, obtaining arable land (as well as the means to work it) is also a matter of economic entitlements, there's no difference between the two points that I can see. So, people who don't have enough to eat don't have enough to eat not because the food doesn't exist, but because the cost of obtaining the food is outside their means.

(In his "Property and Hunger", Sen gives some striking examples to make his point. He argues, for example, that during the Great Bengal Famine, more than sufficient food was available, but Indians were unable to compete with the British Army for the purchase of rice, and so millions died of starvation.)

So, if we want to ensure that people have enough to eat, then we need to adjust the economic circumstances, either by reducing prices or increasing incomes so that the hungry can get what they need. Just handing out food would be a failure for several reasons. The most obvious is that it's another centrally-planned system, with all the attendant problems. But, additionally, it would force the hungry into being debtors, petitioning for having their basic needs met, rather than equals who can take care of themselves.

Making sure the food market works fairly should help, to at least some extent, in making prices go down. (The other way to do it is to block exports entirely, as that floods the market with local product; however, that punishes growers quite harshly, as their profits would be decimated. So, I would suggest this only be used as an emergency measure, in cases of widespread and serious famine.) It won't really help the income issue, though. So, this touches on a broader issue of poverty reduction and fair levels of income; but, I really don't think there's an appetite, politically, for doing that in this country. I do note, though, that this would solve the problem quite neatly: if we provided a minimum income to all citizens, then there would be no need to worry about anyone who was unable to obtain enough to eat, for they would have failed to manage their own income sensibly. (It is legitimate to allow people to suffer the natural effects of their own poor choices.)

So, what are the alternatives? One is to directly subsidize those who are below a certain income level, providing them with income keyed directly to provision of sufficient food. A food stamps program is one way to accomplish this; direct income subsidies would be another. It has the debtor problem, unfortunately, but this is at least somewhat mitigated by the fact that the hungry would be given some autonomy to do what they like with the subsidy. This could be amplified with some direct provision of food to some segments of the population. A school lunch program, for example, would be a good way of ensuring that hungry children get at least one decent meal a day. It might also be possible to provide tax incentives to employers of low-income people for providing a similar sort of program for their employees -- although that should be all, so as not to single out the low-income folks. Similarly, public support could be provided to soup kitchens and food banks. These are not fantastic alternatives, but unless we're willing to face the problem of poverty in this country directly, we will be left with second- (and third- and fourth- and...) best options.

The Health Part

I suspect the above suggestions will already solve the problem of provision of healthy food. Unhealthy food is often attractive because it is cheap. But the cheapness is often a function of externalizing the true costs of producing the food. So, if we internalize the costs, then unhealthy food can't win out against healthy food in a fair competition. Furthermore, if we give the poor sufficient means to compete for food against everyone else, then producers of healthy food have an even larger market to appeal to than they otherwise would, thus opening up the possibility of crowding the unhealthy food producers out of the market. So, the cumulative effect may be that eating unhealthily would be a luxury reserved for the wealthy, rather than a burden imposed on the poor.

It's possible, though, that there might be sufficient consumer demand for unhealthy food that a robust market for it could be created and maintained. Two points here. First, what exactly is the problem with this scenario? And, second, what is the appropriate role for government in solving this problem?

With regard to the first, the problem is not just that people want unhealthy food. Health is, after all, only one good among many, and there are times when it may make sense to sacrifice the consumption of healthy food for other goods. (When one is grading exams, for example, and snacking keeps one's sanity intact.) The problem really is that people may eat just unhealthy food -- or, more exactly, a sufficient proportion of the diet may be unhealthy food such that it leads directly to avoidable and unjustified costs imposed on others. So, the consumption of unhealthy food should be done knowingly, such that the consumer is aware of the effects of what he or she is eating. And it should be discouraged, to the point at which diet is solely a matter of personal choice rather than public policy.

This means, then, with regard to the second, that government should not be banning any substance in food unless it is an immediate harm. (Lead contamination comes to mind.) Trans fats are not sufficiently harmful to justify government's taking the power to choose them out of an individual's hands, nor are high-fructose syrups. However, we should be made aware of the effects of over-consuming these substances. One option -- which I believe has had some success in its initial incarnation -- is to provide warning labels on food products similar to those on cigarette packages. Another would be to create a system of warning symbols similar to those that exist for poisons and corrosive substances, and place them on food products which have high levels of unhealthy substances like trans fats, etc. And another would be simplifying and clarifying the nutritional labels which currently exist. Such issues as repairing the "serving size" nonsense such that it fits actual habits of eating, rather than some rarefied Platonic Form of eating, and clear and strict limits on what can be branded a "healthy alternative". Recently, I picked up a Presidents' Choice "Blue Label" package of two-bite brownies, and compared the nutritional information to the regular PC two-bite brownies. The only difference of significance was about a 10% drop in fat. But they're still brownies, and thus still chock-full of fatty goodness. (Also, the serving size was 2 brownies, IIRC. Who eats just two two-bite brownies at a sitting?)

There is also a clear need for educational improvement here. Not all adults know how to read nutritional labels; I, for one, would be hard-pressed to tell the difference between all the various vitamins which appear on nutritional labels. If additional labelling is adopted, then there should be education to explain what those labels mean, too. And this should all be accompanied by elementary level education in making good food choices; and, if there is a school meals program, as I suggested above, this program should fit with those good food choices. (I see no objection to limiting the choices of children, unlike the choices of adults.)

It might be argued that those who willingly consume unhealthy food over the threshold should bear some, if not all, of the costs of their medical care that would normally be borne under provincial medical plans. I disagree, as there is a very dangerous slippery slope looming underneath that argument. If we charge those who eat unhealthily, then we should also charge smokers for the cost of treating their cancer, those who drive unsafely for the cost of treating their injuries, and those who spend hours working on computers for their eventual tendinitis. Manipulating the insurance system in this way is not a matter of cost control; it is, instead, a matter of lifestyle control, and is patently unjust. It is just to persuade, convince, or cajole someone into behaving more properly. It is not just to force an intelligent, competent adult into proper behaviour. And compelling adults to bear a significant portion of their medical care due to poor lifestyle choices amounts to just that sort of objectionable coercion. (That said, there may be an argument that some nominal cost should be borne by those who make poor choices, as a sort of penalty. My response to that would be that, ultimately, we all make poor lifestyle choices at some point or another, so this amounts to proposing a co-pay.)

Summary

So, here is where I would start in crafting a sensible national policy aimed at providing Canadians with local, healthy food:

  1. Measures to ensure a fair food market, including duties on foreign imports, internalizing costs, etc.
  2. Measures to ensure the poor can compete fairly for food, including provision of income or other subsidies, improvement of food programs, etc.
  3. Measures to educate the public regarding good food choices, including childhood education and behavioural modification, improved labelling, etc.


It's only a sketch, of course, but I think it balances the competing principles fairly well, and manages to be workable to boot.