Last month, five more sugar companies and two trade associations joined the lawsuit the sugar industry had filed against the Corn Refiners Association to block its move to change the name of high fructose corn syrup to “corn sugar.” Meanwhile, the corn processors have launched an ad campaign that includes TV spots featuring a mom walking through cornfields declaring that whether corn sugar or cane sugar, “your body can’t tell the difference.” A recent study published in the medical journal Obesity found significantly higher levels of fructose in sweetened beverages than the amount listed on the label, leading the authors to conclude that actual fructose consumption may be higher than assumed.
Does Coca Cola Mislead Consumers?
A nutrition expert at Health Canada, that nation’s health ministry, has charged that Coca-Cola Company misleads consumers into thinking its Vitaminwater line of drinks is a healthy beverage option.
“I find calling these products ‘waters’ is misleading,” said the official, “given that they have sugars added to them. Perhaps the word ‘waters’ could be put in quotes.” Vitaminwater contains 32 grams of sugar per 20-ounce bottle. Earlier this year, Canadian law firms in Calgary and Vancouver filed class action lawsuits against Coca Cola for misleading advertising of Vitaminwater. In January 2011, the Advertising Standards Authority, the ad regulatory agency in the United Kingdom, said Coca-Cola broke ad rules when its ads described its popular line of flavored water products as “delicious and nutritious.” The Authority ordered Coke to stop making that claim.
Food Safety for Whom?
A new report by GRAIN, a global nonprofit group, called Food safety for whom? Corporate wealth vs. people’s health examines how “food safety” is being used as a tool to increase corporate control over food and agriculture and what people are doing about it. “Corporations are increasingly in the driver’s seat because they set the standards and implement them while governments merely frame the rules and clean up the mess,” says GRAIN Director Henk Hobbelink. “These food and agriculture standards are spreading everywhere and are being used by Wal-Mart and other corporations to organize markets according to their interests.” Genetic Resources Action International, or GRAIN for short, is an independent non-profit foundation with its headquarters in Barcelona, Spain.
Should Corporations Nudge Consumers into Health?
According to the Guardian, the UK government’s public health partnerships with junk food and alcohol companies have come under attack from two of its own advisers on obesity.
In a recent article in the British Medical Journal, Professors Tim Lang and Geof Rayner, who sit on the government’s advisory committee on obesity, write these partnerships risk being a “smokescreen” for “publicly endorsed marketing.” They warn that the strategy could become “collusion between the state and corporations to hoodwink consumers. At least nannies are overt.”
Federal Trade Commission Proposes New Guidelines on Food Advertising to Children
Last week the Federal Trade Commission proposed sweeping new guidelines to restrict television food advertising to children.
According to the New York Times, “the guidelines are meant to be voluntary, but companies are likely to face heavy pressure to adopt them.” The Center for Science in the Public Interest praised the proposed guidelines as “strong and sensible” and urged food and entertainment companies to adopt the standards. Dan Jaffe, a lobbyist for the Association of National Advertisers, called the guidelines “sweeping and, in our view, overly restrictive.” “Despite calling these proposals ‘voluntary,’ the government clearly is trying to place major pressure on the food, beverage and restaurant industries,” he said.
States Making it a Crime to Investigate Agribusiness Abuses
Several states, including Minnesota, Iowa and Florida, are considering legislation that would make it a felony for activists and journalists to carry out undercover investigations of agribusiness operations, punishable by up to 30 years in prison. Kansas and Montana already have similar laws in place.
Michelle Obama’s Let’s Move After Year One: Little More than PR?
The following op-ed was recently published in numerous newspapers across the country through McClatchy-Tribune News Service.
The one-year anniversary of the first lady’s Let’s Move campaign to “end childhood obesity within a generation” was marked by celebratory speeches and fanfare – much of it generated by the White House itself.
It’s certainly true that Michelle Obama has been tremendously successful in summoning both the resources of her office as well as her own positive energy and enthusiasm to get the nation to focus its attention on this important problem. She also deserves credit for specific gains made in the past year, including championing school food and shining a light on the serious problem of “food deserts,” neighborhoods that lack even a basic grocery store, let alone a farmer’s market.
However, her highly touted “Let’s Move” campaign can make no claims of progress in combating the 800-pound gorilla in America’s dining rooms: Junk food marketing to children.
While Mrs. Obama may have elevated the national conversation about childhood obesity, that discourse has actually been going on for almost a decade now. In 2006, a damning report from the Institute of Medicine on food marketing to kids called upon Congress to act within two years if industry made no significant improvements on its own.
In the wake of that threat, food companies made many promises to clean up their act; commitments were announced, self-regulatory bodies were formed. It all sounded very impressive. And yet recent reports coming out of the Rudd Center for Food Policy and Obesity at Yale University as well as the government’s own Federal Trade Commission continue to document ubiquitous junk food and fast-food marketing to children.
Just take a stroll down the cereal aisle and you can find such childhood-obesity-inducing products as Cupcake Cereal and Cookie Crisp Sprinkles Cereal. Even Cheerios now comes in a chocolate variety. And these days, the ads aren’t just on TV. Our digital world contains endless marketing opportunities designed to reach kids wherever parents are not.
The first lady does mention this problem in her speeches, but her campaign is unable to tackle the issue directly, not only because Mrs. Obama has no policymaking powers but because to do so means threatening her husband’s business-friendly image. A sure sign of how small a threat “Let’s Move” is to the food industry is just how eager companies have been to jump onto its bandwagon.
Most successful was Wal-Mart, which recently gained Mrs. Obama’s endorsement of the company’s 5-year plan to improve the quality of its foods. Merits of the announcement aside, particularly troubling was that the first lady’s staff had been meeting in secret with Wal-Mart executives for months, negotiating the final – albeit vague terms of the plan.
The real question may not be if “Let’s Move” is going far enough, but what role is it playing in our national agenda on solving childhood obesity? Negotiated deals with the likes of Wal-Mart cannot become a substitute for actual policymaking. As messy and as imperfect as the democratic process is, it needs to be based on serious policy – not public relations gestures – to work well.
Meanwhile, it seems clear that the Obama administration is unwilling to seriously address junk-food marketing. One idea is to have the government suggest guidelines for industry. In December 2009, a taskforce of several federal agencies did just that – releasing draft nutrition guidelines on the marketing food to children. Apparently, this meager first step – it would be entirely voluntary – set off such alarm bells within the food industry that we haven’t heard a peep from the task force since.
Instead of meaningful government actions we have only “Let’s Move” and more voluntary industry promises. Solving the complex problems of childhood obesity won’t be solved with cute slogans or deal-making with the likes of Wal-Mart. To win this battle, we need our political leaders to take on seriously the politics of marketing junk-food to our children.
Image Credits:
- Let’s Move logo
- The Shifted Librarian via flickr
Buying Silence: Big Soda Takes a Page from Big Tobacco
CHW Contributing writer Michele Simon describes how the American Beverage Association (the lobbying arm of soft drink companies) has donated $10 million to the Children’s Hospital of Philadelphia in a move she interprets as an effort by the soda industry to buy credibility in the face of renewed calls for taxes on sugar-sweetened beverages.
Food Prices and Public Health, Part 1: Why should health activists care about rising food prices?
Anyone who shops at a supermarket or follows world news knows that food prices have been going up. Here in the United States, higher food and energy prices have been driving inflation and contributing to record levels of hunger and food insecurity. According to a March report[1] by the Bureau of Labor Statistics, food prices went up 2.9% in the last year. Of concern, healthier food eaten at home has increased by 3.6%, while less healthy food eaten away from home increased at about half the rate, only 1.9%. The cost of fresh vegetables rose by 4.7% in March and 6.7% in February. The cost of meats, poultry, fish and eggs were up by 7.9% over the past 12 months.
In other parts of the world the increases have been much higher. In mid-April, a World Bank report on its Food Price Index, a measurement of global food prices, showed that food prices had gone up 36% in the last year. Compared to a year ago, the price of corn is up 74%, wheat 69%, soybeans 36% and sugar 21%. These crops constitute the staple diet in many parts of the world and are also the basic ingredients that multinational food companies use to manufacture the energy dense and nutrient poor processed foods that they sell around the world.[2] The Bank estimates that 44 million people have been driven into poverty since last June as a result of the price spikes. Since 2008, more than 130 million people have been pushed into extreme poverty by increases in the cost of basic commodities such as food and energy. After the 2008 food crisis and again in the last year, skyrocketing food prices have contributed to political unrest in Egypt, Tunisia, Haiti, China and elsewhere.
What are the causes of this surge in food prices and what are its public health consequences? What role has the food industry played? Most importantly, how can public health officials, activists and researchers contribute to an understanding of the health impact of rising food prices and inform policies that will reverse these increases or mitigate their effects? In a series of four reports over the next few weeks, I’ll examine these questions.
In this post, I discuss the reasons health professionals, researchers and activists should care about rising food costs. In the next post, I’ll briefly review the global, national and local factors that influence the supply and the demand for food, trying to sort out how these various forces interact to set the prices of both healthier and less healthy foods. In the third post, I’ll look more closely at two market influences on food prices: global and national speculation in food, which has grown significantly in the last decade, and the subsidies that governments offer various sectors of the food industry. I’ll also examine how the food industry has successfully externalized the consequences of unhealthy diets such as obesity and diabetes onto consumers and tax payers, allowing food prices to remain lower but amplifying the social and economic costs of food-related diseases. Finally, I’ll describe and analyze some of the strategies proposed to make healthy food more affordable.
The goal in these reports is to encourage public health professionals and food activists to consider the role of food prices in hunger, obesity and food related health conditions, and to make food prices a target for policy analysis and political action.
Consequences of Rising Food Prices
Changes in food prices influence health in a variety of direct and indirect ways, and of course have varying impacts on populations and nations of different economic levels. In both developed and developing countries, higher costs of basic foods drive poor people further into poverty and food insecurity, reducing the income available for other purposes such as housing, health care and education. In developed nations, most households spend on average 10-15% of their income on food while in developing nations this may increase to 70-80%. Thus food price is very much a class issue, affecting poor people and countries more than the better off.
In the United States today, increasing food prices travel in tandem with high unemployment, cuts in funding for safety net programs and a housing crisis that in the last two years has pushed more than 2 million Americans out of their homes. Thus, higher prices for food are only one component of rapidly deteriorating living conditions for a growing portion of Americans. According to a recent Census Bureau report,[3] the poverty rate in the United States rose to 14.3% in 2009, the highest since 1994. A record 43.6 million Americans lived in poverty last year. Not surprising then that Feeding America, a national coalition of food support programs, last year gave food to 37 million Americans, including 14 million children, a 46 percent increase from 2006.[4]
An important US and global trend is that on average prices for energy dense, nutrient poor processed foods (those high in fat, sugar, salt and calories) have declined or remained stable while prices for healthier foods such as fresh fruits and vegetables have increased.[5] In the United States, for example, in the last 30 years the indexed cost of fruits and vegetables has increased by 40% while the cost for soda has declined by 20% .[6] The table below shows unindexed changes for various food items, confirming that prices for healthy foods have increased far more than prices for less healthy ones. This trend contributes to increased consumption of unhealthy food and decreased consumption of healthier food, especially among poor people, thus exacerbating the already high disparities in food-related health conditions. In Mexico, NAFTA contributed to lower prices and wider availability of processed food imported from the US and declines in local agriculture, thus fueling epidemics of obesity and diabetes, especially among the urban poor and middle classes.[7]
In theory, increasing food prices could lead some food outlets to substitute healthier, less expensive food for less healthy products. For example, according to the Wall Street Journal, Hardees and Carl’s Jr., two fast food chains owned by CKE Restaurants, have recently introduced turkey burgers, which are less expensive and have half the calories of beef burgers.[8]But observers doubt whether most chains are ready to invest in the re-tooling needed for such changes or whether demand for healthier fare can compete with the taste for high fat meals supported by human evolution and billions of dollars in advertising. More commonly, fast food chains have responded to the economic crisis by promoting “value meals” that offer high calorie, fat, sugar and salt products at a discount.
Why Food Prices are a Public Health Priority
Few trends harm public health more than rising food prices. Both in the United States and around the world, higher food prices contribute both to hunger and food insecurity and to obesity and food-related chronic conditions, the world’s two greatest killers. Inadequate nutrition makes people more vulnerable to infectious diseases, still a major cause of death in the developing world. In both developed and developing countries, the greater increase in the cost of healthier food encourages more people to buy the high calorie, fat, sugar and salt products that are associated with global epidemics of diabetes, heart disease and some cancers. Without intervention, rising food prices will contribute to rising illness and death and growing disparities between better off and poorer populations and nations.
Some nutrition professionals shy away from making food prices a priority, given the multiple influences on the cost of food and the complexity of intervening in a meaningful way. But their importance to health makes this an untenable option. In the next post, I’ll examine these multiple influences and consider appropriate roles for markets and governments in setting food prices. Below, I suggest some sources for further reading on food prices and invite CHW readers to suggest others.
For More Information:
Andreyeva T, Long MW, Brownell KD. The impact of food prices on consumption: a systematic review of research on the price elasticity of demand for food. Am J Public Health. 2010;100(2):216-22.
De Schutter O. Food commodities speculation and food price crises. Briefing Notes 02, September 2010. United Nations Special Rapporteur on the Right to Food.
Kaufman F. The Food Bubble: How Wall Street Starved Millions and Got Away With It. Harper’s Magazine, July 2010, 27-34.
Schaffnit-Chatterjee C. Where are food prices heading? Deutsch Bank Research March10, 2011.
References
[1] US Department of Labor. Consumer Price Index Summary. March 2011. Washington, D.C., released April 15, 2011.
[2] World Bank. High and Volatile Food Prices Continue to Threaten the World’s Poor. Washington, D.C., April 14, 2011.
[3] DeNavas-Walt C, Proctor BD, Smith JC. U.S. Census Bureau, Current Population Reports, P60-238, Income, Poverty, and Health Insurance Coverage in the United States: 2009, U.S. Government Printing Office, Washington, DC, 2010.
[4] Feeding America. Hunger Study 2010.
[5] Drewnowski A. The cost of US foods as related to their nutritive value. Am J Clin Nutr. 2010;92(5):1181-8.
[6] Putnam J, Allshouse J, Kantor LS. U.S. Per Capita Food Supply Trends: More Calories, Refined Carbohydrates, and Fats. FoodReview 2002;25(3):2-15.
[7] Freudenberg N. Free trade, the food industry and obesity: How changes in US – Mexico food trade contribute to an epidemic. Corporations and Health Watch, 2007.
[8] Gasparro A. Restaurants see brighter side of low calorie meals. Wall Street Journal, April 2, 2011.
Image Credits:
1. ILRI via flickr
2. Ian Muttoo via flickr
3. Economic Research Service, USDA , Reference 6
Food Prices and Public Health, Part 2: Global, national and local influences on food prices
Around the world, rising food prices are moving investors, companies, politicians and eaters into action. On Wall Street last week, McDonalds Corporation announced that it expected higher beef prices, sending its stock prices down 2% in one day, despite higher than expected quarterly earnings.[1] In Uganda, riots broke out in downtown Kampala to protest rising food and fuel costs, adding another nation to the roster of those experiencing political turmoil due to higher food costs.[2] And in China, the second largest economy in the world, inflation reached 5.4% in March, a 32 month high, driven mostly by an almost 12% increase in food costs.[3] In the longer term, as shown below, the real price of food, as measured by the UN Food and Agricultural Organization’s Food Price Index, has doubled since 1990.
In last week’s post I made the case that rising food prices pose a serious threat to global and US public health, increasing hunger and food insecurity and obesity and diet-related chronic disease, together the leading causes of illness and death. I argued that reversing the rise in food prices was an urgent public health priority and that developing new approaches to lowering food prices and the gap between the cost of healthier and less healthy food offered the food justice movement an important opportunity to reach new constituencies. This week, I examine how supply and demand factors influence food prices at each of three levels: global, national and local.
Global Level
For the last three centuries, food has been a global commodity but in the past 50 years the globalization of food has accelerated, with important implications for food prices. Long term influences on food supply—and therefore on prices—are the natural resources available for producing food such as land and water. As the world’s population increases while the supply of arable land and water stays approximately fixed, the world confronts the classic dilemma of constrained supply and growing demand described by Thomas Malthus in 1798.[4]
After World War II, the Green Revolution harnessed technology to increase crop yield and therefore feed more people. In recent years, however, investment in agricultural research and development has declined significantly,[5] leading to less rapid increases in crop yields. In the convoluted logic of the market, as research led to increased productivity and declines in prices, it became less profitable to invest in more research. Now, as population continues to increase, this failure of supply to meet demand leads to increased prices.
In the short term, weather and climate also influence the supply of food. In 2010-11, extreme heat and drought in Russia and Argentina and heavy rains in Australia and Canada led to declines in wheat production, contributing to a 78% increase in the price of wheat.[6] While climate change cannot definitively be implicated in any one crop failure, most scientists agree that climate change contributes to weather extremes which make food supplies more volatile, contributing to swings in prices.[7]Rising energy prices have also contributed to higher food prices since global agribusiness relies heavily on oil for fertilizers, pesticides and transport.
Agricultural operations also affect food supply. Only about half of what is harvested actually reaches the fork so reducing this waste could dramatically increase food supplies and lower prices.[8] Similarly, animal diseases such as avian flu or mad cow disease, now more globalized than ever, can decimate livestock, leading to temporary declines in supply and increases in price.[9]
Corporate practices also affect the global supply of food. International trade agreements, usually shaped by multinational food companies, make it easier for some countries to export food. For example, the North American Free Trade Agreement dramatically increased export of inexpensive processed food from the US to Mexico, leading to changes in Mexican diets—and health.[10] Speculation can also affect food supplies. If future food prices are estimated to be higher than current ones, food producers—or speculators—can hoard food. Last summer, speculators bought up huge supplies of cocoa in hope of profiting on higher prices.[11]
Beginning in the early 1990s, but especially in the last few years, Goldman Sachs, AIG, JP Morgan, and Bear Stearns, among others also involved in the 2008 financial collapse, created commodities funds to attract investors looking to move their money out of the collapsing housing market.[12] By betting that the price of food will continue to rise, these investors hope to profit. Some analysts believe that this speculation contributed to the dramatic food price increases in 2008 and again this year, [12],[13] although others disagree.[6]
Finally, the concentration of various sectors of the food industry can influence supply and price. When food production is dispersed and highly competitive, many producers compete in part by increasing supply. When the industry is highly concentrated, however, major producers maintain profits by reducing the supply or discouraging new competitors, thus preventing new or cheaper supplies coming to market. Monsanto’s near monopoly on crop seeds illustrates how a few companies can lead to price increases that ripple through the market.[14] As the world food supply depends increasingly on a few crops such as corn, sugar, wheat, soy and rice, produced by a few companies, the potential for constrictions on supply and increases in price grows.
Global demand factors also have an important influence on the food supply and prices. As already noted, increases in the world population require more food to feed more people. Prosperity also increases demand. As more people can spend more on food, demand increases. Many observers consider the growing prosperity in Brazil, Russia, India and China as an important driver of food prices. As people in these and other nations eat more meat, more land is used to grow grain to feed the animals, further reducing the supply of other foods and increasing the price.
Another influence is the growing demand for particular commodities. For example, the rise of biofuels in the last 10 years has increased the market for corn and sugar cane. Moving some of these crops into the energy sector reduces the food supply, increasing prices. Another economic force influencing the demand for food is the depreciation of the dollar. As the dollar falls relative to other currencies, more countries can afford to import food from the United States, an important factor in maintaining demand (and prices) for US crops. The figure below illustrates some of these influences in the period 1996 to 2008.
National and Local Levels
At the national level, many of the same factors operate to influence supply and demand. Public subsidies for some crops (but not others) can increase the supply and reduce the price of subsidized products. In the US for example, the $30-40 billion annual subsidies for corn, sugar and soy have led to falling prices and increased consumption of the processed foods that depend on these industrial food staples, a subject of controversy in the debate on the 2012 Farm Bill. In another domain, federal food assistance programs such as school meal program and the Supplemental Nutritional Assistance Program (SNAP, formerly Food Stamps) and Women, Infants and Children spent almost $95 billion in Fiscal Year 2010, helping to feed many hungry people but also maintaining demand and prices of supported products.[16]
Vertical and horizontal integration of the food industry and concentration within an industry also influences food prices nationally. Some industries make profits by making their products ubiquitous and cheap (think soda, candy and snack foods) while others, usually small producers, develop limited niche markets, which maintain high prices (think of artisanal cheese or ramps) by limiting supply. As noted in last week’s post, the disparity in prices for healthy and unhealthy foods contributes to health inequities.
Public policies that enable food companies to transfer or externalize to consumers and tax payers the harmful consequences of their products (e.g., the cost of treating diabetes) help to keep food prices low but increase long term social costs. Similarly, market power enables companies like Wal-Mart, the world’s largest retail company, to drive tough bargains with its suppliers, allowing lower prices for consumers but keeping down wages of farm and store workers and pushing small local stores out of business.[17]
At the local level, state and municipal economic conditions and policies can also influence prices. In neighborhoods with few food outlets, prices are likely to be higher given the reduced role of competition. One study found that people living in poor neighborhoods pay more for both healthier and less healthy food, showing how food prices can widen health inequalities related to both food insecurity and obesity.[18]
Public subsidies for farmers markets and local community-supported agricultural program can increase the supply of healthy affordable food in low income communities. Conversely, the absence of such public support often serves to limit beneficiaries of these alternatives to better off communities and individuals.
Taxes can also influence the price of food. Some jurisdictions tax junk food and many have proposed taxes on sugar-sweetened beverages, a move so far usually defeated by the soda industry and anti-tax conservatives. Such taxes are presumed to reduce demand by increasing price.
To develop strategies to promote health by lowering the cost of food, especially healthy food, public health officials and food activists will need to identify appropriate targets for action, then develop political strategies to achieve such changes. In the next post, I’ll examine in more detail two possible targets for action: speculation in food and public subsidies for unhealthy food.
References
[1]Associated Press. McDonald’s Profit Is Up; So Are Costs. New York Times, April 22, 2011, p. B4.
[2] Kron J. Protests in Uganda Over Rising Prices Grow Violent. New York Times, April 22, 2011, p. A9.
[3] Barboza D. Fast Growth and Inflation Threaten to Overheat Chinese Economy. New York Times, April 15, 2011.
[4] Malthus T.R. 1798. An essay on the principle of population. Oxford World’s Classics.
[5] Alston JM, Beddow JM, Pardey PG. Agricultural Research, Productivity, and Food Prices in the Long Run Science 2009:325;1209-1210
[6] Schaffnit-Chatterjee C. Where are food prices heading? Deutsch Bank Research March10, 2011.
[7] Nelson GC, Rosegrant MW, Palazzo A, et al. Food Security, Farming, and Climate Change to 2050:
Scenarios, Results, Policy Options. Washington, D.C.2010: International Food Policy Research Institute.
[8] Stuart T. Waste: Uncovering the Global Food Scandal. New York: Norton, 2009.
[9] Rich KM,Perry BD. The economic and poverty impacts of animal diseases in developing countries: New roles, new demands for economics and epidemiology. PrevVet Med. 2010 Sep 8. [Epub ahead of print]
[10] Freudenberg N. Free trade, the food industry and obesity: How changes in US – Mexico food trade contribute to an epidemic. Corporations and Health Watch, 2007.
[11] Chu S. Speculators’ new craze for chocolate leaves a bitter taste. The Independent, 11 July 2010.
[12] Kaufman F. The Food Bubble: How Wall Street Starved Millions and Got Away with It. Harper’s Magazine, July 2010, 27-34.
[13] De Schutter O. Food commodities speculation and food price crises. Briefing Notes 02, September 2010. United Nations Special Rapporteur on the Right to Food.
[14] Neuman W. Rapid rise in seed prices draws U.S. scrutiny. New York Times, March 12, 2010, B1.
[15] Trostle R. Global Agricultural Supply and Demand: Factors Contributing to the Recent Increase in Food Commodity Prices, WRS-0801, Economic Research Service/USDA, 2008.
[16] USDA. The Food Assistance Landscape, FY 2010 Annual Report. Washington, D.C., March 2011.
[17] Lichtenstein N. The Retail Revolution How WalMart created a brave new world of business. New York: Metropolitan Books, 2009.
[18] Stewart H, Dong D. Variation in retail costs for fresh vegetables and salty snacks across communities in the United States. Food Policy 2011;36:128-135.
Image Credits:
1. Magharebia via flickr
2. FAO
3. Ocean.flynn via flickr
4. Trostle, 2008
Corporations and Health Watch 