Cheap Food That Isn’t
By R. J. Salvador and G. A. Zdorkowski
Food and Society Policy Fellow
March 2003
Phone: 515-294-9595
Email: [email protected]
Your food is not cheap. Worse, though you may not intend it, your food expenditures are actually a way of flaunting your wealth. The Department of Agriculture’s Economic Research Service (ERS) estimates that U. S. families and individuals currently spend 10 percent of their disposable income on food[1]—an estimate that is quoted broadly to document how successful the industrialized food system has been in providing an inexpensive food supply. A recent editorial defending farm subsidies proclaims: “Government farm payments undoubtedly help farmers to stay in business, but they also benefit the entire population by helping to preserve our source of relatively inexpensive food. Currently, only about 11 percent of our national disposable income is spent on food—the lowest of any developed nation[2].”
However, claiming that food is cheap because it can be bought with a small proportion of income is like stating that you are fast because your speed is 8 miles. It makes a difference whether you cover those eight miles in one minute (as a jet plane does) or in one hour (as a jogger does.) A more useful rendition is given by Richard Tolman of the National Corn Growers Association: “American consumers enjoy the safest, most abundant, and most affordable food supply in the world at less than 11 percent of income. Consumers in Japan and Germany pay 17 percent for their food. Mexicans pay 25 percent and in India they pay 51 percent[3].” Tolman notes that it is food affordability, the combination of food cost and consumer purchasing power, rather than just the absolute cost of food that is reflected by the ERS figures.
An American household spending 10 percent of the median U. S. income of $42,228[4] actually spends more money on food than the Indian household that spends 51 percent of its $1,005 median income[5] ($4,223 vs. $513.) That is to say that the absolute cost of food per household is 8 times greater in the U. S. than in India. The higher proportion of household income spent on food in India is more indicative of the fact that the average Indian household is 42 times less wealthy than its American counterpart, not that food is more expensive in India. A similar argument holds for Mexico, where households are 25 times poorer than in the U. S. It is only in the comparison with the two industrialized countries that Tolman chose for his examples that Americans enjoy a true price advantage, since Japanese and German households spend 3.7 and 2.6 times more for food, respectively, than do Americans[6].
Some of these conclusions are predictable simply on the basis of the amount and quality of arable land per capita in the various countries of the world. For example, limited agricultural capacity can be expected for small countries, island countries, and countries with little arable land or that are located at high latitudes and have short cropping seasons. If such countries also have large populations or high standards of living (or both), then it would follow that much of their food supply would need to be imported and that their food costs would be high. This explains such cases as Japan, Germany, Sweden, Switzerland, France, Luxembourg, The Netherlands, Denmark, Canada, Norway, Singapore, Australia and New Zealand, where households spend more actual dollars per household for food than do Americans. Note that these are all wealthy industrialized countries with high standards of living.
Where do the poor countries of the world fit in this scheme, in particular those countries where hunger is endemic? These tend to be tropical countries with good to excellent agricultural capacities and low relative food costs. For example, households in Zimbabwe buy food with less than a quarter of the actual dollars that their U. S. counterparts spend; Bangladeshis spend 16 percent, and Ethiopians only 13 percent (about the same as Mexican, Brazilian and Indian households.) Interestingly, while the three countries with the greater food expenditures in this list do not currently produce sufficient food to meet their population’s requirements, the last three, with the lower food expenditures, produce more than enough. All the same, hunger is rampant in all six. What can be drawn from this information? One central fact is that the purchasing power of a population must be taken into account when making any claim about the affordability of food. This point is readily understood in households that experience hunger within the U. S. itself. Such a household might consist of two children and a single mother earning less than the poverty threshold of $14,494 per year[7]. This household must devote at least 30 percent of its income for food, in effect having similar economic access to food as the average household in Mexico or Zimbabwe. In the United States, 11 percent of the population experiences such circumstances[8], or 11.5 million households—summing to 31 million people, about the population of countries such as Canada, Kenya and Morocco.
Any valid comparison of absolute food costs must be based on common standards, for example: dollars per person per year to satisfy a specific dietary requirement. This is because currencies have different values against one another, household sizes vary around the world, and some countries produce much more food than necessary to meet the dietary requirements of their population while others don’t produce enough. Using such adjustments, comparisons among countries draw an even starker picture. Consider the Indian example: households in India must feed three more persons than the average U. S. household (5.6 vs. 2.6 persons, respectively.) In spite of being one of the world’s major hot spots for hunger, India produces sufficient food to provide 113 percent of the minimum caloric requirement for its entire population (it is the world’s 7th largest exporter of wheat and 5th largest exporter of rice.) The absolute cost of food per capita in India (to meet the Food and Agriculture Organization’s minimum caloric specifications), is $81 per year, compared with $1,274 in the United States. In other words the Indian food system can provide an equivalent level of nutrition at 6.4 percent the cost of the U. S. food system. The same is true for Mexico. The figure for Brazil is 9 percent, for South Korea 4 percent and for Vietnam 0.8 percent; all countries with national food sufficiency. What accounts for this? To answer this question, we must delve into the issues of how food is produced, processed, distributed and consumed.
In absolute terms industrial food is expensive and becoming more so with time. On average in the U. S., a unit of food that cost $1 seventy years ago, now costs $38 and ERS projects that per capita food expenditure will rise by another 7.1 percent over the next 20 years[9]. This is readily understandable when you consider what you now are buying. The actual food is the least of it, on average accounting for only 20 percent of the final retail cost of the purchased good[10]. Ultimately you are paying for the freedom to be unconcerned about where your next meal is coming from, and increasingly about how it will be prepared and by whom (today about half of our meals are taken outside the home[11].)
Within minutes of thinking of it, in almost any part of the U. S., you can have any food you desire, whether it is produced in your region or not, whether it is in season or not, and whether you have time to prepare it yourself or not. The vast and powerful infrastructure that the U. S. economy has assembled to make this possible is what makes your industrial food so expensive. If other aspects of that economy also provide you ample purchasing power, then you’re likely to think that this food is a good buy. And indeed, disposable personal income in the U. S. has increased by a factor of 116 times over the past 70 years[12]. Increasingly however, agriculturalists, social critics, and environmentalists are asking if this really is the best way to use our resources to provide our food.
This question is relevant because another feature of the bountiful industrial food system is its abundant wastefulness. This can be seen in many ways, from the overproduction of grains that depresses farm prices, the epidemic of overweight adults and children (according to the Surgeon General this is now nearly two thirds of the population[13]), the diseases associated with extravagant consumption of meat, fats and refined products (cardiac disease is the number one killer of Americans[14]), and the thoughtless disposal of an estimated 20 percent of our food supply, a figure so appalling that it led to the establishment in 1996 of an official USDA food gleaning and recovery program[15]. Yet another way of viewing this is to realize that the amount of food eaten over and above actual dietary requirements, the “luxury food” consumption of an individual in the U. S., (at an average cost of $459), would supply the annual caloric needs of an entire household in such countries as Costa Rica, South Africa and Poland, places where there is national food sufficiency, and of more than two households in Bangladesh, Ethiopia and Rwanda, where there is insufficient food.
Our agricultural systems are clearly productive, but they are also manifestly inefficient in terms of basic resources because they degrade or deplete soil, water and fossil fuel. The amount of energy we use, and the resources that we sap to create this productivity must be factored into any accounting of the overall system. This is compounded by the fact that much of what we produce at high ecological cost consists of luxury foodstuffs that are valued for their convenience, appeal and “comfort,” rather than for their nutrition or health-promoting qualities[16]. Surely we can use our accumulated economic, nutritional and agricultural knowledge to design a more responsible food system than this. As we have seen, it will not do to appeal to the great need of the world’s hungry to justify ever more intensive production of industrial food. If the basic obstacle to food access for the poor is lack of purchasing power, then even the most bountiful supply of expensive industrial food is of little relevance to them. Given that enough food is already produced on the planet to meet everyone’s nutritional needs yet 800 million people hunger (equivalent to the population of the entire American continent), this should be self-evident.
In countries where the absolute cost of food is low, a fair proportion of the population farms and is self-provisioning to some degree. Calories come primarily from plant products and fresh food is distributed through regional market systems, which is to say seasonally and with minimal processing. Ninety-three percent of food calories in India are derived from vegetable products. Almost 70 percent of the population is rural and 73 percent of that is agricultural. This has clear tradeoffs in terms of personal freedom to pursue goals other than self-provisioning and meal preparation. If this were the only way to improve food system quality and efficiency while reducing true costs then it would clearly be an unrealistic model for the U. S. to pursue. The recent decades of expansion in the food service sector demonstrate the overwhelming trend to free personal time by shifting food processing and preparation tasks outside the household. This is consistent with the rise of food costs that reflects the value provided by the specialized food manufacturing, retail and service industries. It should not be surprising that reversing the trends associated with low-cost food results in high-cost food, but is there no middle ground? Are there examples of industrialized food systems that may provide more useful guides to address the deficiencies of the U. S. system?
Consider the healthful diets of most Mediterranean countries. In Italy, a country whose cuisine is world renown and that produces the same amount of nutritional calories per capita as the U. S., the absolute cost of food is 48 percent less. Turkey also provides the same amount of calories per person as the U. S. diet but at 27 percent the cost. A key difference in these countries when compared with the U. S. is the diverse diet featuring seasonal and regional fresh fruits, vegetables and grains and moderate consumption of diverse sources of meat, including seafood, and a minimal reliance on processed, industrial products.
In summation, a deeper analysis of the boast about the small proportion of income spent for food in the United States shows it to be more indicative of our overall wealth than of the actual cost of our groceries. When considering the health and environmental price tags of our food, and the costs associated with the high levels of waste in our food system, such boasts further illustrate the fact that the only reason we can actually afford such a questionable system is that we are so rich and so thoughtless about our food. Simple and sensible changes, such as accepting seasonality and regionality, and valuing freshness, could lead to major reductions in the health and ecological impacts of our food system, reduce our dependence on foreign oil and directly benefit our farming sector[17]. The Mixe people of southern Mexico have a sobering insight about ratios, the introductory topic of this article. They say that wealth is having more than enough to meet one’s needs, and that there are two ways to be wealthy. One is to have a lot, and the other is to need little. When it comes to food, having an abundance of poor quality food—with all of its attendant costs—may not be nearly as desirable as we commonly think. We could all find real abundance from being more conscious and responsible about what, and how much, we actually need.
Ricardo J. Salvador is associate professor of agronomy at Iowa State University. He is chair of ISU’s Graduate Program in Sustainable Agriculture, coordinator of the Agronomy Department’s Global Agricultural Science and Policy Initiative, and Food and Society Policy Fellow with The Jefferson Institute, a national program of professional fellowships whose mission is to educate consumers and societal leaders of the issues and challenges associated with sustaining family farms and food production in the United States.
Gretchen A. Zdorkowski is a geographer and Coordinator of Iowa State University’s Graduate Program in Sustainable Agriculture.
For
more information on the Food and Society Policy Fellows Program visit: www.foodandsocietyfellows.org
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[11] Economic Research Service. 2002. Food Consumer Price Index, Prices and Expenditures. Table 1. http://www.ers.usda.gov/Briefing/CPIFoodAndExpenditures/Data/table1.htm.
[12] Economic Research Service. 2002. Ibid. Table 7.
[13] U.S. Department of Health and Human Services. 2001. The Surgeon General's call to action to prevent and decrease overweight and obesity. U.S. Department of Health and Human Services, Public Health Service, Office of the Surgeon General, Rockville, MD. http://hstat.nlm.nih.gov/hq/Hquest/db/local.sgen.sgact.ctaobese/screen/TocDisplay/da/1/s/58671/action/Toc;jsessionid=A0778A3852FE540DF05C72EE432CD227.
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