Food and Energy in Affluent Cultures Are Too Cheap
Currently (Sep 2022) UK energy and food prices are rising and the media is full of anger and people full of worry about this. But I wonder: might it be that food and energy prices are too cheap, not too expensive? Should we not have expected them to rise? Is our 'cost-of-living crisis' in reality bringing us more to where we ought to be? A facing up to reality?
Food and Energy Have Been Too Cheap!
The UK ecological footprint (in 2022) is around three Earths - three whole Earths would be needed to supply the world if everyone had the lifestyle that is average in the UK! That is totally unsustainable! Is not that totally unfair? If we demand our three-Earth-consuming lifestyles, then we are demanding that other nations should maintain an ecological footprint not only a lot less than ours but a lot less than one Earth, which is one third of ours.
We need to get our ecological footprint down to less than 1,0 Earths. (Three Earths is the ecological footprint of most European nations. Five Earths is the ecological footprint of the USA.)
Why have we such a high ecological footprint? A lot of the reason is because food and energy have been too cheap to us, so we have never had the incentive to economise, and we have used much more of them than we should have. Too much energy use results in high climate change emissions. Too much food results in obesity and other ailments. Too much of both demands that other peoples supply our overindulgence. And getting used to having surfeit of food and energy makes us greedy, expecting the surfeit as a basic human right!
We don't pay the real cost of food, but expect others to pay that cost. Many of those people don't have enough food while too many of us get obese. That is why I suggest that food and energy have been too cheap for us in the UK.
Why are Food and Energy Too Cheap?
Why have food and energy been too cheap? Mainly because they have been subsidised. Subsidised in three ways: direct subsidies, indirect subsidies, and our not paying for the harm caused by getting the food and energy to us.
By "energy" I include both power (electricity and gas) and that which powers transport (mainly oil). The power and transport sectors, globally, each contribute approximately one third to global climate change emissions, so it is very important that we use too much energy.
Direct subsidies include:
Examples are to be found in the Appendix.
- Subsidies to farmers and other food growers, and to energy companies;
- Subsidies to food processors and the energy production industry;
- Subsidies to food sellers and energy suppliers;
- Subsidies for growing biofuels;
- and others.
They all add up to a significant sum.
Indirect subsidies include:
Specific examples and figures may be found in the Appendix.
- What we spend on healthcare because of over-eating, over-drinking and poor diet;
- Road-building and aviation subsidies that make it cheaper than they should be; So it becomes too cheap to transport food from a distance;
- Subsidies to supermarkets to develop, including planning permissions too readily given, especially in the past;
- What we spend on university research to advance food and agricultural technology, in the chemical industry for fertilizers, pesticides and herbicides, and research in other relevant sectors such as transport;
- Bail-outs of failing food-related companies, and to energy companies;
- Sundry others.
They all add up to a significant sum.
Harm that we don't pay for includes:
Whereas harm to health, e.g. obesity, is paid for indirectly, these are harms that are not paid for even indirectly. Most of them cannot be measured, but if they were properly paid for, then the price of our food would be higher. Some are larger, some smaller, some more visible, some hidden. They are of many types, harming many different aspects of life, not just the ecological but also human health and character. Examples may be found in the Appendix.
- Harm to the climate: from burning fossil fuels for transport and energy supply;
- Harm to the climate from methane from animals we eat; and of course the food-energy mix of CO2 from air-miles and transport-miles and from the power required to produce and refrigerate it;
- Ecological harm of destroying ecosystems like rainforests to clear land for food growing;
- Ecological harm from pollution from energy production;
- Ecological harm from over-use of pesticides, herbicides and fertilizers in growing food;
- Biological harm to soil from over-use of fertilizers;
- Psychological harm to mental health of people, from things like processed foods;
- Harm to our national character, such as greed, complacency, hedonism, dependency culture;
- Harm that comes from non-ethical farming, both to animals or biodiversity, and also the hardening of hearts of people involved.
Some of those harms are, of course, indirect rather than direct, but they all are laid at our feet as responsibility. If we don't pay the full costs of preventing such harms and repairing the harms for which we are responsible then it is like stealing. Steal something and you get it free, or rather too cheaply, paying only the cost of the time involved in stealing. Not paying for that harm and we get those things much more
These all add us to a huge reduction in price of food to us, affluent peoples.
In making these calculations, I consider food consumed in the USA, Europe (including e.g. Ukraine), and the UK. I am NOT considering the question "Who pays" to subsidize our food; that is for another time. What I want to know is what price should we pay for food in order to meet its full costs?
Then we can decide policy. Indeed, should not we, the affluent peoples pay extra for our food in order that the less-affluent can afford food?
Examples of Direct Subsidies
Please send further examples.
Present and Recent Direct Subsidies
- 1 September 2022: The outgoing UK Prime Minister announced £700million subsidy to building a new nuclear power station.
- From UK farming subsidies and Brexit, explained, August 13, 2020. "Currently, British farmers receive £3.4 billion a year in subsidies under the EU Common Agricultural Policy."
- Re. EU Farm subsidies. Google search for "How much is the EU farming subsidy?" (12 August 2022) gave the following result "The European Union spends around ‚59 billion Euros a year on farm subsidies." EU agriculture statistics: subsidies, jobs, production (24-11-2021) gave: "In 2019, 38.2 billion Euros was spent on direct payments to farmers and 13.8 billion on rural development. A further 2.4 billion supported the market for agricultural products."
- Re subsidy to livestock and dairy industries, which cause more harm than other agriculture. From UK farming subsidies and Brexit, explained, August 13, 2020. "British dairy farmers obtain over £56 million in EU direct payments which make up almost 40% of their annual profits. Lowland and upland livestock farmers receive about £38 million in subsidies which make up over 90% of their annual profits! ... In comparison, farmers growing cereals obtain about £40 million in EU direct payments (equivalent to almost 80% of their annual profit) but half of the cereals, pulses and oil crops are used for animal feed meaning that about £20 million of the subsidies for cereals are still for the livestock and dairy industry."
- Re. USA direct subsidies to farming. Google search (12 August 2022) yielded "The federal government spends more than $20 billion a year on subsidies for farm businesses. About 39 percent of the nation's 2.1 million farms receive subsidies, with the lion's share of the handouts going to the largest producers of corn, soybeans, wheat, cotton, and rice." Notice how the largest farm subsidies go to those foods implicated in beef and dairy and processed food.
- But how much does each State add to this for farm subsidies? I do not have any data on that yet.
- Re USA direct subsidies to food: PRIMER: Agriculture Subsidies and Their Influence on the Composition of U.S. Food Supply and Consumption (November 3, 2021). "The most highly subsidized crops - corn, soy, wheat, and rice - are the most abundantly produced and most consumed, often in the form of ultra-processed foods. Sugar is also highly subsidized in the form of indirect price supports that benefit producers and drive-up prices, yet sugar is also widely overconsumed."
Past Direct Subsidies
Past direct subsidies tend to form our expectations that energy and food must be cheap for us.
- Re subsidy to farming in the past, which led us to expect cheap food. Subsidy and the EEC; Assistance for small farmers. "Under the [pre-EEC] British system, the subsidy came from general taxation, to which the better off contributed more than the poor, while at the same time allowing consumers continued access to cheap food at world market prices." and this set up the UK expectation that food should be cheap. This expectation remained even through the decades of UK membership of the EEC then the EU.
- Subsidy and the EEC; Assistance for small farmers. "Subsidy remained the basis of agricultural prosperity through to the 1970s. The government subsidised prices for a wide range of products, both arable and pastoral (and also fertiliser and animal foodstuffs), but the nature of subsidy changed over time. With the end of rationing in 1953, the government ceased to be the major purchaser of agricultural produce, which was again sold and bought in a free market. By the mid-1950s, food surpluses tended to depress world prices. The amount of subsidy necessary to keep British farmers in production therefore tended to increase over time. The annual round of negotiations between the <> and the Department of Agriculture, known as the Farm Prices Review, was a complex exercise. The expanding agricultural subsidy undermined public regard for the industry and became the subject of much criticism. The government attempted to control the subsidy through the annual farm prices review in order to reduce the burden on the Exchequer. These attempts were, however, undermined by the balance of payments difficulties during the 1960s. The government needed to reduce agricultural imports, but this could only be managed through the subsidy."
Examples of Indirect Subsidies
I am beginning to collect examples, past and present, here.
Present and recent indirect subsicies:
- Subsidised insurance. How Farm Subsidies Affect the U.S. Economy (April 18, 2022). USA Federal crop insurance program; see below the harm this does, in removing incentive to grow drought-resistant crops. "Corn for cattle feed is the most significant culprit, fattening 40% of the nation's grain-fed beef."
- Subsidised biofuels. How Farm Subsidies Affect the U.S. Economy (April 18, 2022). USA Federal crop insurance program; see below the harm this does, in removing incentive to grow drought-resistant crops. "Other subsidies encourage farmers to grow corn for ethanol biofuel. The number of ethanol production facilities in the High Plains region has doubled. That drains an additional 120 billion gallons a year from the aquifer."
Past indirect subsidies, which fostered our current expectations:
- Past Indirect subsidy to farming via technology. Subsidy and the EEC; Assistance for small farmers. In the 1950s and 1960s "There was also great technological change as farming became increasingly mechanised. Mechanisation produced rapid gains in productivity, but the number of agricultural workers was greatly reduced." - and much of that technological change was financed by government inducements.
- Re. EU Indirect food subsidies: Above we see that in 2019, in addition to 38.2 billion Euros direct farm subsidies, half as much again were given by the EU indirectly: 13.8 billion on rural development and 2.4 billion supporting the market for agricultural products. That, of course, is only one component of indirect subsidies to food in the EU.
Examples of Not Paying for Harm We Do
First, harm that our lifestyles with too-cheap energy and food do:
Now harm that subsidies themselves actually do, or encourage:
- How EU food subsidies harm the poorer nations. Stop the Dumping! How EU agricultural subsidies are damaging livelihoods in the developing world. "European Union agricultural subsidies are destroying livelihoods in developing countries. By encouraging over-production and export dumping, these subsidies are driving down world prices of key commodities, such as sugar, dairy, and cereals. Reforming a system in which Europe's large landowners and agribusinesses get rich on subsidies, while smallholder farmers in developing countries suffer the consequences, is an essential step towards making trade fair."
- How Farm Subsidies Affect the U.S. Economy (April 18, 2022). "Because the United States is a major exporter and importer of farm products, federal subsidies have a disproportionate effect on global agriculture markets and, in turn, farmers in developing countries.. A classic example is how African cotton farmers were hurt by U.S. cotton subsidies, which increased global production of cotton, thereby lowering the world price to levels at which less productive cotton farmers in West Africa couldn't compete. As one study concluded, '[b]etween 2 million and 3 million farms in West Africa rely on cotton as their main source of cash income, and they compete directly with subsidized US cotton. Not surprisingly then, lower world cotton prices harm millions of households and more than 10 million people across the region."
- Re harm that EU subsidies do. EU subsidies benefit big farms while underfunding greener and poorer plots - new research (August 21, 2020). "The Common Agricultural Policy, or CAP, is the European Union's largest budget item. For the 60 billion Euros (£53.9 billion) a year it pays in subsidies, the CAP is expected to support farmer incomes, ensure a supply of quality food, protect biodiversity, tackle climate change and encourage young people into farming. ... the CAP isn't living up to its promises." They are concerned about "Where subsidies really go", pointing out that they go to the richest, but here we are concerned only about the subsidies as such and the harm they do. The CAP "actually subsidises farming regions with the most pollution and least biodiversity-friendly farming habits" and "is exacerbating, rather than reducing income inequality among farmers".
- Livestock and dairy farming (heavily subsidised directly, as mentioned above) are the ones that cause most agricultural climate change emissions, and lead the affluent peoples into obesity. See UK farming subsidies and Brexit, explained, August 13, 2020.
- Re effect of USA farm subsidies. "The federal government has long subsidized America's farmers, significantly affecting our food supply and what we eat. ... often in the form of ultra-processed foods. Sugar is also highly subsidized in the form of indirect price supports that benefit producers and drive-up prices, yet sugar is also widely overconsumed. Fruits and vegetables, on the other hand, receive relatively little subsidization - and Americans eat much less produce than recommended." [PRIMER: Agriculture Subsidies and Their Influence on the Composition of U.S. Food Supply and Consumption (November 3, 2021).]
- Re harm that USA farm direct subsidies do. How Farm Subsidies Affect the U.S. Economy (April 18, 2022). "Farm subsidies ... have evolved to become very complex. As a result, only large producers can take advantage of farm subsidies. Out of all the crops that farmers grow, the government subsidizes only five of them. They are corn, soybeans, wheat, cotton, and rice."
- Re harm that USA indirect subsidies do. How Farm Subsidies Affect the U.S. Economy (April 18, 2022). "The federal crop insurance program may be encouraging farmers to plant crops that aren't drought-resistant. ... it keeps them from switching to drought-resistant crops. ... The drought is forcing farmers to drain the groundwater from the Ogallala Aquifer eight times faster than rain is putting it back. The aquifer stretches from South Dakota to Texas. It supplies 30% of the nation's irrigation water. At the current rate of use, it will dry up within this century. Scientists say it would take 6,000 years for rain to refill the aquifer. Corn for cattle feed is the most significant culprit, fattening 40% of the nation's grain-fed beef. "
- Re. Obesity. Does Subsidizing Crops We're Told To Eat Less Of Fatten Us Up? (July 18, 2016). "We - the U.S. taxpayers - help subsidize farmers by paying part of the premiums on their crop insurance. ... But are there unintended consequences? ... Americans are told to fill 50 percent of our plates with fruits and vegetables. But ... U.S. agriculture policies 'focus on financing the production of corn, soybeans, wheat, rice, sorghum, dairy and livestock,' ... About $170 billion was spent between 1995 and 2010 on these seven commodities and programs, according to the researchers."
Created: 2nd September 2022.
Last updated: 4 June 2023 some edits; uploaded.