As faculty and students return to the classroom after leaving their summer jobs, social action projects, vacation houses, beaches or research projects, Corporations and Health Watch examines how public health programs can integrate information on the impact of business practices on health into teaching, research and service.
While a growing body of evidence documents that the practices of the tobacco, alcohol, food, firearms, automobile, pharmaceutical and other industries have a profound impact on health, many public health, nursing and medical programs and courses continue to focus on how to improve public health by changing individuals, communities and governments, rather than businesses.
Faculty and students who want to broaden their understanding of the role of corporations and business practices can use the Corporations and Health Watch website to design teaching, learning, research and practice experiences. These can expand the repertoire of public health researchers and practitioners who seek to promote social justice by tackling the social determinants of health. Listed below are 10 actions that can help your public health, nursing or medical education program to address this neglected influence on population health, health inequalities and social determinants of health.
1. Develop a lecture on corporate practices for the public health core courses.
For documentaries and films to show in class visit here.
For tips on introducing corporate practices issues into public health core courses, visit here.
2. Assign students to monitor marketing, product design, or retail practices as well as lobbying, campaign contributions and sponsored scientific research of a specific industry for a semester and report on their findings to class.
Some useful resources: The Influence Explorer at the Sunlight Foundation
For a description of an undergraduate class project visit here.
For introductions to doing research on corporations visit here and here and here.
3. Develop and teach a new course on business practices and health.
4. Organize field placements at advocacy organizations that monitor corporate practices or organize advocacy campaigns to change alcohol, tobacco or food industry practices.
5. Organize an event on role of food industry on Food Day, a national event being led by Center for Science in the Public Interest.
6. Assign or write a research paper on the health impact of a product, practice or industry.
7. Organize a faculty seminar that includes researchers from public health, marketing, sociology, business, law and other disciplines to explore areas of common interest.
8. Organize a student group on campus to study and take action to reduce harmful business influences on health.
9. Offer to assist your local or state health department to conduct research on activities of alcohol, tobacco and food industries in your jurisdiction in order to inform public health activities to counter harmful practices of these industries.
10. Support or organize a student group to investigate business practice of campus food service, vending machine contractor or university endowment fund.
These are only a few ideas to get students and faculty started. Have an experience to share? Send it to us (info@corporationsandhealth.org) and subscribe to our free monthly e-newsletter. Image Credits:
In last week’s CHW commentary I asked, “Will the UN High Level Meeting on Non-Communicable Diseases Stand up to Multinational Corporations?” This week, I refer readers to several other recent analyses of the UN meeting scheduled for September 19th and 20th at the United Nations in New York City.
In a feature in last week’s British Medical Journal, Deborah Cohen investigates whether industry influence could derail the UN meeting. According to Cohen, who had access to the meeting’s draft document, “years of planning may be set to unravel. With only weeks to go before the summit, years of negotiations seem to be stalling.
“Discussions have stopped on the document that forms the spine of the summit, and charities are concerned that governments are trying to wriggle out of commitments.”
Cohen also notes that “ protection of financial interests” often blocks action to address the deeper determinants of NCDs. She describes a successful campaign by the European food industry to thwart a proposal before the European Parliament to create a traffic light labeling system for food products. Using the playbook written by the tobacco industry, food companies told members of the European Parliament that the any new regulations would lead to job losses.
Meanwhile, a statement released by the global advocacy group the Non-Communicable Disease Alliance, warned that “international progress on non-communicable diseases (NCDs) such as cancer, diabetes, cardiovascular disease and chronic respiratory disease, is at grave risk, because of recent efforts by some member states to postpone and weaken United Nations negotiations.” Apparently developed nations such as the US, UK and European Union states are unwilling to make financial commitments to reducing NCDs or to set measurable targets for reduction.
In another British Medical Journalanalysis on the upcoming NCD meeting, Dr. Derek Yach, a former executive director of WHO and now Senior Vice President of Global Health and Agricultural Policy at PepsiCo, asserts that the UN meeting is “a perfect forum to develop a set of actions aimed at redesigning the food system to make meeting the optimal nutrition needs of all its first priority.” He warns, however, that “prescriptions will succeed only when farmers, food and agricultural companies, non-governmental agencies, and parts of the UN that have yet to be engaged in the high level meeting are brought into the process.”
Just what role food and agricultural companies ought to play at the UN meeting and other public deliberations on NCD policy is the question of the day. A recent report released by the UK House of Lords Science and Technology Select Committee concluded that industry’s call for voluntary codes of conduct were unlikely to be effective in changing dietary behavior and that stronger regulations may increase rather than decrease consumer choices.
Another perspective on the role of industry appeared in a reviewon obesity policy published in last week’s theme issue of Lanceton the topic of obesity. The authors recognize the opportunities for leadership at the UN meeting but note that to date “the most powerful activities by the private sector relevant to public policy are undoubtedly lobbying activities, which often undermine policies aimed at reducing obesity—e.g., in relation to regulations on marketing to children, traffic light labelling, and taxes on unhealthy foods.”
While most of the recent focus of industry role in NCDs has been on food and beverage companies, other observers have noted the importance of the tobacco and pharmaceutical industries. In a recent commentary in the British Medical Journal, Simon Chapman, a tobacco researcher and director of Australia’s Action on Smoking and Health has urged the UN High Level meeting to reject the Big Pharma’s effort to medicalize tobacco cessation, urging that promoting unassisted tobacco cessation is a more realistic and effective strategy for most nations.
In later posts, I’ll examine the role industry representatives actually play at the upcoming UN meeting.
In recent weeks, the food industry has responded forcefully to efforts by advocates and regulators to advance new policies to create healthier food environments. For example, the soda industry has begun a concerted legal effort to stop or slow public health campaigns on the adverse effects of sugar-sweetened beverages. According to Reuters, the soda industry and its attorneys have filed at least six document requests with public agencies from California to New York. “It is, in our opinion, an effort to overwhelm or smother government employees, who already have too much to do,” Ian McLaughlin, an attorney at the National Policy & Legal Analysis Network to Prevent Childhood Obesity in Oakland, California, told Reuters.
And in response to the Federal Trade Commission’s proposal for voluntary guidelines for food marketing to children, the nation’s largest food and drink marketers are developing their own campaign to avoid public oversight.
In these and other policy debates, the food industry relies on a network of trade association, law firms and lobbying groups to advance its case. In order to help CHW readers better understand the web of organizations, I present in the table below brief descriptions of a few of the largest trade associations, for the most part in their own words.
The American Beverage Association, says its website, is a trade organization that represents the beverage industry in the United States. Its members include producers and bottlers of soft drinks, bottled water, and other non-alcoholic beverages. ABA was founded in 1919, and originally named the American Bottlers of Carbonated Beverages. In 1966, it renamed itself the National Soft Drink Association. Then in November 2004, it changed to its current name, “to better reflect the expanded range of nonalcoholic beverages the industry produces.”
Americans Against Food Taxes, reports its website, is a coalition of concerned citizens – responsible individuals, financially strapped families, small and large businesses in communities across the country – opposed to the government tax hikes on food and beverages, including soda, juice drinks, and flavored milks. Its lead sponsor is the American Beverage Association. The mission of the coalition is two-fold: 1) To promote a healthy economy and healthy lifestyles by educating Americans about smart solutions that rely upon science, economic realities and common sense; and 2) To prevent the enactment of regressive and discriminatory taxes that will not teach our children how to live a healthy lifestyle, and will have no meaningful impact on public health, but will have a negative impact on American families struggling in this economy. Its members include 7-Eleven, Inc., Burger King Corp., Domino’s Pizza, the Grocery Manufacturers Association, McDonalds, the National Association of Convenience Stores, Snack Food Association, the U.S. Chamber of Commerce and the Wendy’s/Arby’s Group, Inc.
The Association of National Advertisers, says its website, is the advertising industry’s oldest trade association, founded in 1910 in Detroit, Michigan by 45 companies to “safeguard and advance the interests of advertisers and consumers.” Currently, the ANA leads the marketing community by providing its members insights, collaboration, and advocacy. ANA’s membership includes 400 companies with 10,000 brands that collectively spend over $250 billion in marketing communications and advertising.
The Grocery Manufacturers Association, says its website is “the voice of more than 300 leading food, beverage and consumer product companies that sustain and enhance the quality of life for hundreds of millions of people in the United States and around the globe. Based in Washington, D.C., GMA’s member organizations include internationally recognized brands as well as steadily growing, localized brands.” Founded in 1908, GMA is an active, vocal advocate for its members. The association and its member companies are committed to meeting the needs of consumers through product innovation, responsible business practices and effective public policy solutions developed through a genuine partnership with policymakers and other stakeholders.
The National Association of Convenience Stores is an international trade association representing more than 2,100 retail and 1,500 supplier company members. According to itswebsite NACS member companies do business in nearly 50 countries worldwide, with the majority of members based in the United States. The U.S. convenience store industry, with more than 146,000 stores across the country, posted $511 billion in total sales in 2009. NACS serves the convenience and petroleum retailing industry by providing industry knowledge, connections and advocacy to ensure the competitive viability of its members’ businesses.
The Snack Food Association (SFA), says its website is the international trade association of the snack food industry representing snack manufacturers and suppliers. Founded in 1937, SFA represents over 400 companies worldwide. SFA business membership includes, but is not limited to, manufacturers of potato chips, tortilla chips, cereal snacks, pretzels, popcorn, cheese snacks, snack crackers, meat snacks, pork rinds, snack nuts, party mix, corn snacks, pellet snacks, fruit snacks, snack bars, granola, snack cakes, cookies and various other snacks.
The United States Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations. More than 96% of U.S. Chamber members are small businesses with 100 employees or fewer, says its website.
Campaign Contributions and Lobbying Expenditures of Selected Food Trade Associations
These organizations play an active role in campaign contributions and lobbying. In the table below, I report their total campaign contributions in the specified period and the percentage of these contributions that went to Democrats and to Republicans. The table also shows the total amount these organizations reported spending on lobbying in the period indicated and the main bills for which they have lobbied in recent years. The sources for these data are two databases created by theSunlight Foundation. The first, Influence Explorer, shows how specific organizations, companies, individuals and elected officials influence our political system. The second, Poligraft, enables visitors to paste in a newspaper article or other report and shows a detailed view of the connections between the individuals and organizations described in the article and their influence on our political system.
Lobbying
These organizations hire law and lobbying firms to advance their agenda. A review of the Sunlight Foundation databases shows several of the trade associations use the same lobbying firms. For example, the American Beverage Association, the Grocery Manufacturers Association and the Association of National Advertisers together paid Patton Boggs LLP, the nation’s top ranked lobbying firm by revenues, almost $1.5 million in the intervals listed in the chart above. The US Chamber of Commerce and the Grocery Manufacturers of America together paid the law firm Akin Gump almost $3.5 million for lobbying in the last two decades, a time when that firm ranked second the in the nation for total lobbying revenues. The Chamber and the American Beverage Association paid the Bokorny Group more than $2.6 million. The table below describes these three lobbying firms, only a few of the many companies advancing the interests of Big Food in Washington.
Akin Gump Strauss Hauer & Feld LLP Akun Gump, according to Wikipedia, is a law firm founded in Dallas, Texas, in 1945 by Robert Strauss and Richard Gump. The firm now numbers more than 800 attorneys and advisers in the United States, Europe, the Middle East and Asia. Akin Gump’s work has been recognized by leading legal media and rating publications and organizations. In 2010, the firm was ranked as one of the nation’s top 20 corporate law firms by Corporate Board Member.
The Bockorny Group The Bockorny Group, according to its website is a bipartisan government affairs consulting firm specializing in a wide range of public policy areas with long standing relationships within the White House and on Capitol Hill. “We represent a diverse client base of major trade associations and Fortune 100 companies throughout the country. For over 20 years, the firm has weathered significant shifts in political party control as well as in ideology. In each instance, we look to adapt strategically while representing business needs with an adherence to the highest ethical and professional standards. Our vast amount of experience enables us to tailor a customized political and policy oriented strategy. This strategy can be the key to defeating a regulatory challenge or, in other cases, winning a legislative provision central to a company’s bottom line… The firm is one of the best when corporations or trade associations are in need of navigating legislative and regulatory terrain.”
Patton Boggs LLP For more than 40 years, says the firm’s website, Patton Boggs has maintained a reputation for cutting-edge advocacy “by working closely with Congress and regulatory agencies in Washington, litigating in courts across the country, and negotiating business transactions around the world. Our partners include women and men with extensive backgrounds in government service with strong ties to both major political parties, as well as top-flight litigators and individuals with a keen understanding of business and finance. Patton Boggs began as an international law firm concentrating in global business and trade in 1962. … We were among the first law firms to recognize that all three branches of government could serve as forums in which to achieve client goals, enabling us to emerge as the nation’s leading public policy law firm, and we have developed our extensive business law capabilities into the firm’s largest practice area.”
This brief overview of the food industry’s political operations shows the power and resources the industry has at its disposal. To advance their own agenda, nutrition and health advocates will need to develop strategies that turn these corporate assets into liabilities and their own limitations into assets. More on that in future CHW posts.
Note: This post is a longer version of a correspondence that appeared in Lancet on August 13, 2011.
Alarmed that non-communicable diseases (NCDs), the world’s number one killer, now pose a growing threat to economic development, this September the United Nations General Assembly will convene its first High Level Meeting on NCDs in New York City. World leaders and public health officials will consider how to reduce the growing threat that cardiovascular disease, cancer, chronic respiratory disease and diabetes pose to population health, economic development and health care systems.
Non-Communicable Disease Alliance Briefing Paper for UN Meeting on NCDs
These conditions cause an estimated 35 million deaths annually; 80% occur in low and middle income countries and one quarter among people younger than 60 years of age. By 2030, NCDs will cause more than three quarters of all deaths in the world.
In preparation for the UN meeting, groups as varied as the NCD Alliance, a coalition of four global voluntary health organizations, the Commonwealth Heads of Government and theMillennium Development Goal Summithave proposed important but uncontroversial actions such as improving surveillance for NCDs, integrating NCD prevention and control into national health systems, making NCD prevention an economic development issue, and allocating more international assistance for NCDs.
The NCD Alliance has also recommended more controversial steps such as ratification and full and universal implementation of the WHO’s Framework Convention on Tobacco Control and the elimination of “all forms of marketing, particularly those aimed at children, for foods high in saturated fats, trans-fats, salt and refined sugars.” The most pressing question facing the UN meeting is whether participants will be willing to tackle the corporate practices of the tobacco, food, alcohol, automobile and pharmaceutical industries that have so significantly contributed to the global spread of NCDs.
How Corporations Promote the Spread of NCDs
A growing body of evidence demonstrates that how corporations create, market, retail and price their products has contributed to increases in NCDs. For example, food and beverage makers market products high in fat, sugar, salt and calories; increase portion size; target children with ads and video games promoting unhealthy food; lobby for policies that make unhealthy foods cheaper than healthier ones and export their least healthy products such as sugar-sweetened beverages, fast food, cereals and snack foods to low and middle income countries. The result has been rising rates of diet-related NCDs.
The alcohol industry advertises aggressively to young and problem drinkers, contributing to liver diseases as well as injuries and violence. The industry uses its political clout to stop excise taxes that would discourage youth and problem drinking and sponsors ineffective “responsible drinking” campaigns that compete with under-funded effective approaches and emphasize individual rather than social responsibility for discouraging problem drinking. The automobile industry produces cars that fail to use available pollution control technology, opposes stricter standards for pollution control, and resists policies that favor cleaner public transportation. Increasing evidence links auto pollution with chronic respiratory disease, heart diseases and cancer.
Tobacco is predicted to contribute to one billion premature deaths in this century. The tobacco industry manipulates nicotine levels to make cigarettes more addictive and promotes its products, especially to women and young people in developing countries, their emerging markets. By increasing the rate of women’s smoking through targeted advertising, the tobacco industry has helped to shrink the longevity benefit that women have long enjoyed over men, a perverse way of reducing inequities.
Finally, while the pharmaceutical industry has developed drugs that have helped to control NCDs, it also promotes inadequately tested or dangerous drugs to treat NCDs and invests in developing minor variations of patented drugs that are profitable rather than in cheaper, safer and more effective alternatives.
While NCDs have multiple causes, a growing body of evidence shows that their burden on global health are inextricably linked to the practices of a small number of global companies in industries that are becoming increasingly concentrated. Ten multinational food companies account for 80% of the global food and beverage advertising. The three largest tobacco companies sell close to two-thirds of the world’s cigarettes and a few companies produce most of alcohol the world drinks. Thus, altering the practices and policies of a few dozen corporations could substantially improve the prospects for preventing and managing NCDs but this requires political leaders to demand changes in some of the world’s most powerful corporations.
Making Corporations Accountable
To date, the business world has been remarkably successful in avoiding responsibility for its role in NCDs. It does this by exploiting or manufacturing several myths about chronic disease. First, many people see NCDs as the inevitable consequence of economic development and population aging, the collateral damage of progress. But many people now develop NCDs in early and mid-adult years, so their rapid growth is not simply a function of aging populations. China, Egypt, Jamaica and Sri Lanka have NCD mortality profiles similar to the US and other developed nations, contradicting the view that NCDs are the unique curse of better off countries. Business benefits from portraying NCDs as the unavoidable corollary of aging and development because this view spares closer scrutiny of the role of corporate practices.
Second, conventional wisdom posits lifestyle as the primary cause of NCDs: if only people ate better, moved more, smoked less and consumed less alcohol, the world could prevent many deaths and lower the costs imposed by NCDs. As a result, NCD prevention focuses on programs designed to change health-related behavior, often one person at a time. Of course individuals’ health behavior contributes to NCDs. However, no evidence demonstrates that the world’s population has recently become more gluttonous or susceptible to addiction. What has changed is the behavior of the organizations that shape the environments in which people make health decisions. Global expenditures for advertising increased from $50 billion in 1950 to $570 billion in 2005. In the last few years the number of corporate lobbyists working in the capitals of the United States, the United Kingdom, the European Union and wherever international trade negotiations occur has skyrocketed, giving business a disproportionate voice in the policy decisions that shape health and lifestyle.
Corporations and their political supporters insist that business has an important role in shaping NCD policies and promote a third myth that voluntary corporate codes are the most effective tool for changing their health-damaging practices. Last summer, UK Health Secretary Andrew Lansley invited Mars, Cadbury and Coca Cola to play greater roles in the national anti-obesity initiative and the development of new food regulations. Corporate health leaders at Pepsi Cola and other companies have called for more private-public partnerships to address NCDs. However, their claim that voluntary agreements for corporate social responsibility suffice to protect public health is not supported by independent assessments of such codes in the food, alcohol and tobacco industries.
Calls for public sector collaboration with businesses fail to acknowledge that many companies profit from promoting NCDs. Corporate managers are legally required to maximize profits and too often depend on business models that exploit biological vulnerabilities (e.g., a craving for high fat, sugar and salt diets), addictions, or social insecurities. Some companies may temporarily benefit from selling healthier food or promoting more responsible drinking but in the long run increasing consumption and market share usually require promoting disease rather than health.
In the final analysis, if the UN meeting is to make progress in stopping the rise in NCDs, participants will need to find the backbone to stand up to corporate propaganda and lobbyists. Specific policies that could put a dent in the incidence of NCDs include: tighter restrictions on advertising unhealthy products; laws and taxes that discourage companies from transferring or externalizing the health costs of their products onto consumers or tax payers; legal corporate codes of conduct that require global companies to disclose known health effects of their products and practices; and stronger restrictions corporate lobbying and campaign contributions in order to provide health advocates with a more level political playing field. Absent forceful political mobilization by social movements, local governments and health professionals and their organizations, it is unlikely that businesses will agree to such a platform but will instead argue for the incremental, ineffective approaches they have advanced so far. Stay tuned for further developments.
For Further Reading
Beaglehole R, Bonita R, Horton R, et al. Priority actions for the non-communicable disease crisis. Lancet. 2011;377(9775):1438-47.
Cecchini M, Sassi F, Lauer JA, Lee YY, Guajardo-Barron V, Chisholm D. Tackling of unhealthy diets, physical inactivity, and obesity: health effects and cost-effectiveness. Lancet 2010;376 (9754):1775-84.
Freudenberg N, Galea S. The impact of corporate practices on health: implications for health policy. J Public Health Policy. 2008;29(1):86-104.
Geneau R, Stuckler D, Stachenko S, et al. Raising the priority of preventing chronic diseases: a political process. Lancet. 2010;376(9753):1689-98.
Monteiro CA, Levy RB, Claro RM, de Castro IR, Cannon G. Increasing consumption of ultra-processed foods and likely impact on human health: evidence from Brazil. Public Health Nutr. 2011;14(1):5-13.
World Health Organization. 2008-2013 Action Plan for the Global Strategy for the Prevention and Control of Noncommunicable Diseases, 2008.
In two previous posts, I described why health and food activists should care about rising food prices and analyzed global, national and local influences on food prices. In this report, I examine the role of two such influences in more detail: public subsidies and speculation.
Subsidies and food prices
Can the USDA put our tax money where they want our mouths to go?
Source: Physicians Committee for Responsible Medicine.[1]
The public subsidizes food producers in a variety of ways. Most directly, the United States Department of Agriculture pays a variety of subsidies to food producers – direct payments to farmers or landowners for growing or not growing certain crops; counter-cyclical payments that are paid when crop prices fall below a level set by Congress; market-loss payments that are distributed when prices fall as a result of economic changes; a crop insurance program that reimburses growers for weather-related and other losses.[2] These subsidies disproportionately benefit big food growers. According the to the Environmental Working Group’s Farm $ubsidy Database, the largest and wealthiest 10 percent of farm aid recipients received 74% of all farm subsidies between 1995 and 2009, with an annual average payment of $445,127 per recipient to this top tenth, compared to an average of $8,682 for the bottom 80 percent of farmer recipients.[2]
Another type of subsidy comes through safety net programs such as SNAP (formerly called Food Stamps) and the school food program. These programs feed hungry people but also provide a guaranteed market for food producers, limiting their vulnerability to economic downturns. In Fiscal Year 2009, federal spending on SNAP was about 54 billion dollars and on other food programs about $20 billion for a total of $74 billion.[3]
A variety of other public programs subsidize the food industry more indirectly. Tax laws that allow food (and other) manufacturers to claim advertising costs as business expenses means that tax payers are indirectly subsidizing the marketing efforts designed to persuade people to eat unhealthy products. A study by the National Economic Research Board found that the elimination of tax deductibility tied to fast food advertising would reduce childhood obesity at a rate of 5-7 percent.[4] The authors estimated that since the corporate income tax rate is 35 percent, the elimination of the tax deductibility of food advertising costs would be equivalent to increasing the price of advertising by 54 percent.
Laws that shield food manufacturers from liability for the health consequences of their products constitute another huge subsidy. According to the National Restaurant Association, 23 states have passed “Cheeseburger Bills,” which bar lawsuits against fast food companies for their contributions to obesity. As a result, food prices don’t include these “externalized” costs. Avoiding liability or penalties for food safety violations or escaping paying the costs of treating the victims of food outbreaks constitutes another externalized subsidy to the food industry. Unsafe food costs Americans $152 billion per year. As Marion Nestle has observed, “the high externalized cost of our present food system is a good reason to reconsider current food policies.”[5]
While more research is needed to calculate the full costs of all food subsidies, Ken Cook of the Environmental Working Group estimates that the federal government paid out a quarter of a trillion dollars in federal farm subsidies between 1995 and 2009.[6] The other types of subsidies such as tax deductions, lax regulation and liability protection make the full costs much higher.
How do these subsidies affect food prices? In general, subsidies lower the cost of the subsided products, especially in comparison to unsubsidized products that consumers could choose as an alternative. However, given the multiple sources of subsidies and the product-specific consequences, there is no simple or single answer to this question. Some analysts have pointed to the significant effects of one subsidy or another while others have disputed the claim that subsidies play a major role in food prices or health.
For example, in an analysis of the impact of federal subsidies to corn growers, Alicia Harvey and Timothy Wise at the Global Development and Environment Institute at Tufts University, concluded that these policies provided high fructose corn syrups producers an implicit subsidy of $243 million dollars a year and more than $4 billion since 1986.[7] However, they concluded that HCFS subsidies are not the primary cause of soda overconsumption.
In my view, analyses of specific subsidy programs for specific products, while necessary to build a comprehensive body of evidence that can guide policy, miss the larger point of health impact. In almost all cases, subsidies are enacted at the behest of the food industry, not consumers or health advocates. Not surprisingly, their intended goal is to benefit the subsidized industry not to advance public health.
Given the central dynamics of the food industry in the last five decades – more industrialized production, higher profits for more processed and less healthy food, more advertising spending on less healthy than on healthy food, emphasis on national and global rather than local markets, heavy reliance on a few crops such as corn, wheat and soy – most industry-supported subsidies end up reinforcing rather than challenging the status quo. And from a health perspective, the most problematic element of the current status quo is that unhealthy food is cheaper and more available than healthy food. To change that dynamic will require a transformation in how government uses subsidies, not simply tinkering at the margins.
Currently, two disparate groups support large federal agricultural subsidies. Agribusiness wants to maintain the flow of public money that helps to maintain profitability while supporters of entitlement programs want to protect and expand programs such as SNAP, school meals and various rural programs. Together these constituencies have a powerful voice in Washington.
Similarly, opponents of the current pattern of subsidies include two groups with very different interests: health advocates who want to switch subsidies from less healthy to healthier food[8] and the most conservative Republicans who want to end or significantly shrink safety net programs and let free markets reign. Recently Republican House leader Representative Paul D. Ryan, Republican of Wisconsin and the chairman of the House Budget Committee, told reporters, “We shouldn’t be giving corporate farms, these large agribusiness companies, subsidies. I strongly believe that.”[9] Ryan has also called for a 20 percent cut in SNAP funding, reductions amounting to $127 billion by the year 2021.[10]
From a public health perspective, an urgent priority is for advocates to develop strategies that can unite supporters of anti-hunger programs and those concerned about diet-related health conditions such as obesity, diabetes and heart disease without making unacceptable compromises with the food industry or the politicians who want to end entitlement programs. Forging such a policy agenda will require advocates to develop far more sophisticated understandings of the causes and consequences of rising food prices. Several of the alliances working on the 2012 Farm Bill such as the Community Food Security Coalitionand the National Sustainable Agriculture Coalition are engaging their members in just such dialogues.
Speculation and food prices
At the Global Commodities Forum in Geneva in January 2011, hosted by the UN Conference on Trade and Development, Michael Dunn, a Commissioner of the U.S. Commodity Futures Trading Commission (CFTC), noted that commodity derivatives markets, places where financial instruments based on food commodities are traded, perform a “critical price discovery function.” He said the CFTC should ensure stable and orderly markets and not prevent or limit volatility that arises as a result of a change in market fundamentals.[11] But how does that financial goal affect the ability of the world’s population to get the food they need to sustain health?
Speculation can lead to increases in food prices when food producers from small farmers to multinational agribusiness corporations withhold products from the market in hopes of causing or benefiting from subsequent price increases. More indirectly, investors can buy “food futures” in commodity markets and hold on to these investments in the hope that as demand increases or supply falls, the re-sale price of the food future will increase, leading to more generous returns on their investments.
Some observers believe that the collapse of the housing and derivatives markets in the United States that began in 2006 encouraged speculative investors to move their money out of housing and real estate and into seemingly safer commodities markets, including energy, metals and food. In early 2008 such investments contributed to sharp increases in the price of food staples such as rice and wheat, as shown in Chart 1 below. After this bubble inevitably burst, food prices collapsed, further contributing to market volatility and disadvantaging the small producers least able to survive periods of market disruption.
Source: Ghosh J.[12]
As Susanne Amann and Alexander Jung observed last summer in the German news weekly Der Spiegel, investors are now “betting big again on commodities like wheat, coffee, rice and soybeans.”[13] “As a result,” they wrote, “prices are no longer determined by supply and demand, but by investment banks and hedge funds.” In 2009, Goldman Sachs earned $5 billion in profits from commodities speculation. Other financial institutions involved in commodities trading are Bank of America, Citigroup, Deutsche Bank, Morgan Stanley and J.P. Morgan, many of the same cast of characters who helped to precipitate the 2008 financial crisis. In fact, these banks have created new financial instruments known as collateralized commodities obligations, CCOs, which are similar to the subprime mortgage derivatives that helped to burst the housing bubble.
These developments have led some officials and advocates to call for tighter regulation of food speculation. In 1936, as part of the New Deal reforms, Congress passed the Commodities Exchange Act, restricting speculation in food products. In the 1990s, however, the financial industry successfully lobbied Congress to weaken these limits, leading to increased trading in agricultural products, led by Goldman Sachs.[13]
In a report published in Harper’s Magazine last July, Frederick Kaufman investigates the rise of the financialization of food commodities.[14] He concluded that the 80 per cent increase in world food prices between 2005 and 2008 suggests that investors will continue to invest in food commodities and quoted a hedge fund manager who wrote his clients that “the fundamentals argue strongly that these sectors have significant upside potential.”
Other analysts disagree. In a 2011 research report written for Deutsche Bank, Claire Schaffnit-Chatterjee concluded that deeper structural factors influencing food supply and demand were more important than speculation, which in her view generally follows rather than creates a price bubble.[15] She did note that since food has a low price correlation with other asset classes, “agricultural commodities are likely to remain an interesting instrument for portfolio diversification.”
Acknowledging this debate about the role of speculation, Olivier de Schutter, United Nations Special Rapporteur on the Right to Food, observed that volatility in food prices, viewed by market proponents as a necessary price correction, has a particularly disruptive impact on poor and food-insecure populations.[16] He argued that “reforming the global financial system should therefore be seen as part of the agenda to achieve food security, particularly within poor and food-importing countries.” By framing food security as a basic human right, he opens new avenues for the pursuit of affordable, healthy food.
In the fourth and final post on food prices and health, I will consider various strategies that have been proposed to better align food subsidies and health, reduce the adverse health consequences of food speculation and reverse the current situation in which unhealthy food is often cheaper than healthy food.
[4] Chou S-Y, Rashad I, Grossman M. 2008.”Fast-Food Restaurant Advertising on Television and Its Influence on Childhood Obesity,” Journal of Law & Economics,2008; 51(4),599-618.
[12] Ghosh J. Commodity Speculation and the Food Crisis. In Excessive Speculation in Agriculture Commodities: Selected Writings from 2008–2011, Lilliston B, Ranallo A, editors. Institute for Agriculture and Trade Policy, 2011., pp. 51-56.
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.
Rushing to buy bread as wheat runs short and food prices rise in Mozambique
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]
Fruits and Vegetables Have Led Retail Food-Price Increases
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.
Protest against high food prices in Algeria, January 2011
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.
Wheat field in Canada
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.
[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]
[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.
With half the world’s population now living in cities, public health researchers have focused new attention on the health impact of urban living and the development of new approaches to creating healthier cities. Recent reports by UN-HABITAT, the World Health Organization (WHO), the Commission on Social Determinants of Health and others have highlighted the challenges of improving the health of urban populations.
While these reports acknowledge that government, civil society and business all shape the health of urban residents, it is the first two that receive the most attention. UN HABITAT, for example, has called attention to the importance of good local and national governance in improving urban health, and Healthy Cities convened by WHO Europe emphasizes the importance of convening stakeholders in order to improve urban health. In this commentary, I examine the role of business in urban health, with a particular focus on corporations.
How Business Shapes the Health of Cities
Why this special attention to business and why the singling out of their health impact on cities?
Increasingly, it is business decisions that create the urban environments that shape health and disease. The food we eat, the air we breathe, the houses we live in, the conditions at workplaces and communities, our opportunities to meet friends and partners, and our identities as consumers and citizens—all are powerfully influenced by businesses. The choices that businesses make about what to produce, how to market, where to sell and what to charge set the stage for health behaviors, lifestyles and urban social and physical environments.
While business decisions influence the health of all people everywhere, cities are especially important arenas of influence. Cities and corporations have an intimate historical relationship; both are products of the evolution of markets and both were transformed by industrialization. Cities first emerged as agriculture produced surpluses that enabled population concentrations not directly dependent on farming. As populations grew, labor became more differentiated creating ever more specialized markets. Technological developments enabled fewer people to produce sufficient food to sustain humanity, pushing populations out of the countryside and into cities where the availability of cheap labor attracted employers, further concentrating populations. As cities became centers of production and selling, they also became nodes of trade and commerce, amplifying their economic and political position.
From their earliest days, cities were also generators of inequality, enabling some to accumulate wealth and power while large portions of the urban population lived in squalor. Today, cities are the command and control centers of global business, the headquarters of the media empires that market business products, and the dense markets that create the greatest opportunities for profit. Increasingly, the business push for more consumption shapes the physical space of cities, making them a marketing tool for tourism, shopping, eating and romance. As a result, the decisions made in corporate boardrooms often have a greater impact on health than those made by health officials or elected officials.
Why hasn’t the impact of business on urban health attracted more attention? I suggest three reasons. First, many public health professionals believe that the ways in which companies make decisions and operate is not our business. Public health is a government responsibility, they say, and our efforts to improve health have to rely on the powers and capabilities of the public sector. Second, in part as a result of an aggressive public relations effort by business to make its powers seem inevitable, many people believe that business dominance is the only possible economic and political arrangement possible. The demise of most alternative systems with the collapse of state socialism in the 1990s further reinforced the belief that another world is not possible. Finally, most public health professionals lack the knowledge and skills to understand how businesses make decisions, the pathways by which their actions shape health or the strategies we could use to modify health-damaging business practices. Fortunately, we are in control of changing that.
Food, Guns and Tobacco: The Urban Story
The development of strategies to promote health-enhancing and reduce harmful consequences of business practices on cities requires detailed empirical analysis of specific companies, products and practices in specific urban contexts. While business practices can either promote or undermine health, public health officials and advocates often direct their attention to harmful practices given their mandate to protect population health. The following examples illustrate some of the ways that business decisions affect urban health.
In 1994, after forceful advocacy by the global food industry, among others, Mexico and the United States signed the North American Free Trade Agreement, making it easier for US companies both to sell low-cost corn, processed food and other goods to Mexican citizens, and to invest US dollars in the Mexican food industry. Between 1988 and 1997, US foreign direct investment in the Mexican food processing industry increased 25-fold. Between 1988 and 1999, the total energy intake from fat in Mexico increased from 23.5% to 30.3 % with the largest increases in urban areas. Between 1992 and 2000, calories that Mexicans consumed from carbonated soft drinks increased by almost 40%. By 2002, the average Mexican was drinking more Coca Cola servings per year than US residents. In this same period, the national prevalence of overweight and obesity increased by 78%, and between 1993 and 1999, the prevalence of diabetes in Mexico increased by 30%. The increases were highest in the densely populated urban areas where targeted marketing and retail density made unhealthy food readily available. Thus, a trade agreement promoted by multinational companies led to changes in the practices of global companies, national supermarket chains and local retail outlets, which in turn contributed to epidemics of obesity and diabetes, concentrated in Mexico’s rapidly growing cities. 1
In the 1990s, small arms manufacturers in the United States produced and widely distributed cheap handguns known as Saturday night specials. Handguns accounted for 80% of gun deaths in the US and widespread availability of inexpensive guns put these weapons within reach of gang members, would-be criminals, and worried homeowners. 2Fear of crime and youth violence made cities prime markets for gun makers and these guns played a major role in the increase in urban homicides and gun injuries during this period. Most Saturday night specials were produced by several gun companies in Southern California that were created in the early 1990s to realize a new market opportunity. 3 By the mid 1990s, these companies were producing more than a million guns a year. According to tracing data from the Bureau of Alcohol, Tobacco and Firearms, guns made by these companies were 3.4 times more likely to be involved in a crime than were handguns from other major manufacturers. With supporters from the National Rifle Association and other parts of the gun lobby, these manufacturers were able to resist local, state and national efforts to regulate the sales of these weapons more strictly.
As developed countries establish stronger public health measures to control tobacco use, the tobacco industry has moved its marketing to developing nations, where billions of new potential customers can be found in the urban settlements that make efficient and targeted advertising possible. In South Africa, for example, tobacco companies have created marketing campaigns aimed at Black women, showing tobacco use as a new freedom connected to urban living and offering giveaways to encourage use. An important goal of tobacco marketing in developing world cities is to change norms so that tobacco use will be more socially acceptable and to create peer support for smoking, especially among women and adolescents.
Pathways from Business to Health
These three examples illustrate some of the ways that business decisions affect the health of urban populations. First, businesses operate at several levels of organizations and scales. On the global level, multinational companies and trade associations influence trade policies, regulatory regimes and prevailing ideology. For example, the pro-industry neoliberal agenda of deregulation, privatization and lowering of trade barriers has set the tone for global discussions on businesses and health for much of the last two decades. This ideology sets the framework in which national and local health officials propose policies to promote health. On the community level, food, alcohol and tobacco retailers decide which products to offer at what prices, influenced in part by global and national advertising that shape norms and desires and in part by the material living conditions of their customers. The power of business to shape health depends in part on its ability to operate at these multiple levels, creating synergies of impact due to horizontal and vertical integration of its operations.
Second, business has the capacity to operate in several domains, including the commercial, the political, the legal and the economic. It uses media to create and shape desires, lobbying and campaign contributions to influence politics and regulation, public relations and philanthropy to influence values and norms and campaign contributions to affect elections. Again, the ability to operate across sectors magnifies its influence.
Third, businesses have increasingly been able to construct cities to advance their goals. Whether it is the downtown development projects that attract tourists and encourage consumption, the dense markets that create niches for product diversification, the proliferating media that offer new ways to sell to more people or the extralegal and illegal markets emerging in informal urban settlements and slums, cities are places to buy and sell. While alternative urban spaces like peer networks, neighborhood associations, public meeting places and social movements still exist, everywhere they compete, often unsuccessfully, with market forces.
What can public health professionals do?
So what can public health researchers, professionals and advocates do to reduce the impact of harmful business practices on cities?
1. Develop the knowledge and skills to understand and change harmful business practices. To play a stronger role in protecting population health, health professionals will need to learn a new set of skills. Already some public health training programs have begun to take this task on, but more needs to be done. 4
2. Find allies that can magnify our influence. By itself, the public health community has limited influences on business practices. In partnership with advocacy organizations, researchers, and social movements such as the environmental justice, corporate responsibility, global justice and consumer protection movements, we have a greater potential to influence policy.
3. Partner with local government and health departments to make protecting the public against harmful business practices a public health priority. In New York City, for example, the city health department and the Mayor have strengthened public oversight of the tobacco industry, fast food companies and gun sellers. Their successes have created new opportunities for other local, state and national governments.
5. Join efforts to create a more level political playing field. As long as business interests can dominate political, electoral, legal, economic and regulatory processes, the public health community will have a limited voice in making policy decision that can modify harmful practices. To change this unfavorable climate, public health professionals can join campaigns to limit corporate influence on politics and create spaces for more equal participation by those most harmed by current practices.
6. Use the assets of cities to contest harmful corporate practices. While urban populations are often the targets of harmful corporate practices, cities also have assets that can counter these efforts. Cities are the cradles of social movements, provide ready access to local and national media, and offer options for more sustainable, democratic and healthier social arrangements. By using these urban resources, public health professionals and advocates can help to create alternatives to the status quo.
By Nicholas Freudenberg, Founder and Director of Corporations and Health Watch and Distinguished Professor of Public Health at Hunter College, City University of New York.
What do the US Food and Drug Administration, the advocacy group Corporate Accountability International, and the investigative journalism outlet ProPublica have in common? All three have used crowdsourcing, a technique for gathering information from multiple sources using a variety of new media, to monitor health-related practices of corporations. In this article, CHW reviews these efforts, and explores the advantages and challenges of using crowdsourcing to gather information about corporate practices.
The Food and Drug Administration’s Bad Ad Program
In May 2010, the Food and Drug Administration (FDA) introduced its “Bad Ad Program” in which doctors are trained to identify misleading or untruthful pharmaceutical ads, and then report them by email or phone to the FDA. Until now, FDA’s enforcement effort relied on a few dozen staffers to review hundreds of pharmaceutical ads, brochures, and presentations voluntarily submitted by companies or reported to the agency by drug industry personnel. Upon discovery of misleading or untruthful information, the FDA sends warning letters to companies, but given the burden of review and the limited staff, letters have often not been sent until long after the ad has reached its market.
“The Bad Ad Program will help health care providers recognize misleading prescription drug promotion and provide them with an easy way to report this activity to the agency,” said Thomas Abrams, director of FDA’s drug advertising division. Pharmaceutical Research and Manufacturers of America (PhaRMA), the lobbying group that includes the many of the world’s largest drug manufacturers, including Pfizer, Merck & Co. and GlaxoSmithKline, said in a statement that it supported the effort as “another step to help educate—and receive feedback from—health care providers about prescription drug advertising and promotion.”
Drug makers spend about $20 billion per year to promote their products in medical journal ads, information booths at medical conferences and multimillion dollar TV ad campaigns. About $4 billion of industry spending is used for direct-to-consumer advertisements. These campaigns have been associated, in some cases, with heavy use of what were later found to be dangerous drugs, such as Vioxx, a pain reliever, and Avandia, a drug used to control diabetes.
Corporate Accountability International’s Retire Ronald Campaign
After BP promised to create a $20 billion fund to reimburse individuals, businesses, and others damaged by its oil spill,ProPublica, the online investigative journalism outlet, decided to investigate whether BP was living up to the commitments it had made to reimburse claims quickly, fairly, and transparently. Those who had filed a claim with BP were asked to complete an online survey, widely distributed by a variety of print and online media. Later, when Ken Feinberg took over the administration of the reimbursement fund, ProPublica expanded its investigation to monitor his activities. In 2010, ProPublica received a Knight-Batten Award for Innovations in Journalism for its Distributed Reporting Project that had systemized “the process of crowdsourcing, conducting experiments, polishing their process and tasking citizens with serious assignments.” When the group created its Reporting Network in 2009, ProPublica writer Amanda Michel explained, “By collaborating directly with the public, we aim to deliver a greater range of information. E-mail, cell phones, instant messenger, ProPublica.org and social networking sites such as Facebook are our tools. Questions that hold public figures and those in power accountable are our guides.”
The Advantages and Challenges of Using Crowdsourcing
Crowdsourcing has its origins in corporate America. In 2006, Jeff Howe and Mark Robinson first wrote about crowdsourcing in Wired magazine. Howe defined it as “the act of a company or institution taking a function once performed by employees and outsourcing it to an undefined (and generally large) network of people in the form of an open call. This can take the form of peer-production (when the job is performed collaboratively), but is also often undertaken by sole individuals. The crucial prerequisite is the use of the open call format and the large network of potential laborers.” In recent years, companies have used crowdsourcing to design ad campaigns, choose winners in corporate contests, and conduct market research.
For health researchers, advocates, and regulators, crowdsourcing has some distinct advantages. For researchers, it can provide access to a wider range of sources and respondents than traditional survey or focus group research. It can also reduce participant burden by using familiar technologies and media such as the Internet, cell phones, or social media to elicit responses, and by allowing participants to respond when and how they choose. For advocates, as illustrated by the Retire Ronald campaign, crowdsourcing can help to describe a phenomenon and to mobilize people to take action. Those who reported sightings of Ronald were contacts for community action in subsequent phases of the campaign. For regulators, as the FDA’s Bad Ad Campaign shows, crowdsourcing can help to overcome limited staff and resources, and give an agency a wider sample of problem practices. Crowdsourcing allows all users to apply mapping and other techniques to analyze data. Moreover, reported data can be posted online, allowing corrections or amplifications, or triggering additional responses from those who have encountered similar problems, a digital snowball sample.
Crowdsourcing may be especially relevant to monitoring corporate practices because it can help level the playing field—adding new eyes and ears to organizations that seldom have the resources of their corporate targets. Imagine a system in which consumers who purchase faulty products, community witnesses to violations of pollution laws, or viewers of misleading or untruthful advertisements could send an email or text message, or make a phone call to a readily available site that could display all reports geographically and by topic in real time?
Like any method, crowdsourcing also poses challenges. The results can vary from a collection of anecdotes to systematic data; each has its purposes but collectors of crowdsourced information need to determine the valid uses based on the purpose and the response. In addition, some reports may come from disgruntled but not wronged customers or from businesses trying to gain an edge on their competitors by filing false charges. However, any reporting system has these perils and police and other agencies have developed strategies to assist in distinguishing between valid and bogus reports. Finally, crowdsourcing is a complement to, not a substitute for, other investigative strategies. Researchers still need to collect systematic data from a defined sample, organizers still need the face-to-face encounters that lead to political mobilization, and regulators still need full-time enforcement agents to ensure that reports of wrongdoing are investigated and prosecuted as needed. At best, crowdsourcing can become a new tool to expand and deepen other forms of investigation.
In the last few decades, multinational corporations have led the world in finding new applications for science, technology, and emerging media. Viral marketing, neurocognitive research to understand and influence consumer choices, and data mining of public databases to gain commercial insights are all examples. If public health researchers, officials, and advocates want to protect population health, they will need to master these technologies. Such mastery is a prerequisite both to regulate their use by corporations and to find new uses to advance public rather than private interests. By learning about crowdsourcing and applying it to monitor corporate practices, the public health community can fulfill its professional mandate of promoting the health of the public.
Nicholas Freudenberg is Founder and Director of Corporations and Health Watch and Distinguished Professor of Public Health at Hunter College, City University of New York.
For more than a decade, Toyota customers have reported incidents of sudden acceleration, resulting in crashes, injuries, and deaths. The company now faces charges that it intentionally hid defects from customers. Nick Freudenberg explores what role globalization may have played in accelerating Toyota’s woes, and what can be done to prevent such corporate catastrophes in the future.
About a year ago, Toyota became the world’s largest car manufacturer by sales after General Motors, the previous leader, was hit by the economic crisis. The Japanese company built its reputation and sales by emphasizing safety and quality, contrasting its products with less durable and dependable American vehicles. In the last year, however, Toyota has faced accelerating woes – declining sales, safety problems such as sticky accelerators and faulty brakes, and a spate of lawsuits, regulatory actions and unfavorable media coverage. In this report, CHW examines Toyota’s troubles, analyzes their links to broader global trends, and assesses the implications for automobile safety and public health.
Sticky accelerators and faulty brakes
For more than a decade, Toyota customers have reported incidents of sudden acceleration. At first Toyota attributed these reports to driver problems, then to problems with floor mats. Now both the company and the U.S. National Highway Traffic Safety Administration (NHSTA) have launched major investigations into sticky accelerators. By the end of March 2010, according to Reuters, Toyota had recalled about 8.5 million vehicles around the world. In early April, the New York Times reported that the U.S. Transportation Department (DOT) was seeking a $16.4 million fine against Toyota, the largest allowed, because the company had failed to promptly notify the government about potential problems with accelerator pedals. Toyota seems likely to pay rather than contest the fine.
According to Safety Research and Strategies Inc., an auto safety advocacy group, between 1999 and the end of January 2010, 2,262 cases of sudden acceleration involving Toyota vehicles were reported, resulting in 815 crashes, 341 injuries and 19 deaths. To add to Toyota’s troubles, in February, the U.S. Transportation Department opened an investigation into brake problems in the 2010 Toyota Prius, the company’s best-selling hybrid car. Shortly thereafter, Toyota recalled more than 400,000 cars. The company’s most recent problem was a Consumer Reports “no buy” warning for the Lexus GX 460 due to its rollover risk. Toyota suspended sales of its SUV the next day.
In testimony before a Congressional hearing in February, Akio Toyoda, the company’s president and grandson of its founder, apologized for the company’s missteps. “I fear the pace at which we have grown may have been too quick”, he told House members. “I regret that this has resulted in safety issues described in the recalls we face today, and I am deeply sorry for any accidents that Toyota drivers have experienced.”
Investigations and lawsuits
To determine the causes of the accelerator problems, the U.S. DOT last month asked experts from the National Administration for Space and Aeronautics (NASA) to analyze Toyota’s electronic throttles to determine if they have contributed to unintended acceleration. In an interview with Reuters, Secretary of Transportation Ray LaHood said, “We are determined to get to the bottom of unintended acceleration.” Nine NASA scientists are expected to bring expertise in electronics, electromagnetic interference and software integrity to the DOT investigation.
Key legal questions are what Toyota knew when and what they did with that information. In addition to the fine the DOT is seeking, a bevy of lawyers are pursuing these questions:
By early February, Toyota faced at least 30 lawsuits in the U.S. and Canada seeking class-action status on sudden acceleration.
In March, Orange County (CA) District Attorney Tony Rackauckas filed a civil lawsuit against Toyota, charging that the company had intentionally hid defects from consumers. “We intend to prove that Toyota ignored, omitted, obfuscated and misrepresented the evidence that was amassing for many years regarding serious safety defects in their cares,” he told reporters.
In September 2009, a former Toyota attorney told CBS News that Toyota had illegally withheld evidence in hundreds of rollover deaths and injury cases. The plaintiff, Dimitrios Biller, filed a racketeering lawsuit charging that his complaints about the company’s legal misconduct led to his firing. Company lawyers said that Biller had “breached his ethical and professional obligations…by violating attorney-client privilege.”
The inspector general of U.S. Department of Transportation is reviewing the NHTSA’s handling of the investigations into unintended acceleration, and the National Academy of Sciences is examining unintended acceleration and electronic vehicle controls throughout the auto manufacturing industry.
In addition, according to Fair Warning, an online publication on health, safety and corporate conduct, Toyota faces a federal criminal investigation and inquiries by the Securities and Exchange Commission, the Connecticut Attorney General, and a U.S. Attorney in New York.
Globalization – the fundamental cause of Toyota’s problems?
For public health researchers, Toyota’s troubles provide a case study of how global market forces can lead companies to engage in practices that threaten health.
How did this happen? First, in an effort to beat its U.S. competitors, Toyota pushed to expand production, move into new markets and dominate the growing market for smaller, more fuel-efficient cars. Although the results of current investigations will not be known for several months, it appears that Toyota cut safety corners to realize these opportunities, as CEO Toyoda tacitly admitted in his apology to Congress.
Second, the current practice of sourcing and using parts around the world means that once a defective part gets into the supply chain, it can cause global problems, a trend Christian Science Monitor reporter David Grant called the “dark side of globalization.” Toyota has blamed the accelerator problem on a faulty accelerator mechanism manufactured by Chicago Telephone Supply Company, a U.S .company founded in Chicago in 1896, now located in Elkhart, Indiana. In additional to its use in Toyota vehicles sold in the United States, the CTS part was also used in 1.8 million Toyotas sold in Europe, a Ford car produced in China and the Pontiac Vibe, formerly made by General Motors. All have now been recalled for repair. Global sourcing may make it easier for producers to lower costs but they also risk spreading dangerous products around the world, as also shown by the global spread of contaminated peanut butter manufactured by the Peanut Corporation of America in Blakely, Georgia last year and the 2007 recall of tainted pet food made in China.
Third, the growth of multinational corporations and the weakening of national regulatory agencies have made it more difficult for governments to keep an eye on big companies. At Congressional hearings on Toyota acceleration problems, NHTSA Administrator David Strickland promised that his agency would take a “hard look” at the power it has. Current authority, he said, may not be sufficient to regulate modern technology. Strickland also told the panel it was unclear whether the agency can regulate “in a way that allows the auto industry to build and sell safe products that the consumer wants to drive.” DOT Secretary La Hood has also called for more resources for regulating auto safety. The $16 million fine proposed by DOT is a drop in the bucket of profits Toyota earned in the decade since accelerator problems were first identified.
Globalization – the possible solution to Toyota’s problems?
Just as multinational company-led globalization created the problems that Toyota now faces, bottom-up globalization may suggest new solutions. The intense international media and consumer group scrutiny of Toyota and regulatory and legal action on many fronts and continents makes it harder for Toyota to ignore the problem and easier for advocates to share information and resources and to plan common strategies.
As public health authorities expand the use of global treaties to regulate tobacco, alcohol and perhaps food, might a Framework Convention on Motor Vehicle Safety follow? Such an approach might slow a race to the bottom in which big companies look for the lowest cost supplies and the quickest route to showrooms, even if such measures compromises safety. An enforceable global treaty could also protect more scrupulous manufacturers from their less responsible competitors. In 2000, a new UN treaty set in motion the development of global standards for automobile manufacturing. Such a treaty could set the stage for future harmonization for technical regulations on vehicles, ranging from pollution and fuel-use standards to anti-theft devices and windshield wipers. However, to date industry groups have dominated this process and enforceable standards are nowhere in sight.
Each year about 400,000 people around the world are estimated to die in automobile crashes and 30% of the victims are under the age of 25, making auto deaths an important cause of overall mortality and premature deaths. Many more die from exposure to automobile pollution that could be prevented by available technology. By adding their voice to the call for stronger auto safety and pollution standards and for tougher oversight of the auto industry, public health advocates can help improve the safety of cars on the road, while also increasing space in the market for safer and more sustainable forms of transportation.
By Nicholas Freudenberg, Distinguished Professor of Public Health at the CUNY School of Public Health at Hunter College and founder of Corporations and Health Watch.
Faculty and students who want to broaden their understanding of the role of corporations and business practices can use the Corporations and Health Watch website to design teaching, learning, research and practice experiences. These can expand the repertoire of public health researchers and practitioners who seek to promote social justice by tackling the social determinants of health. Listed below are 10 actions that can help your public health, nursing or medical education program to address this neglected influence on population health, health inequalities and social determinants of health.
10. Support or organize a student group to investigate business practice of campus food service, vending machine contractor or university endowment fund.
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