Saturday, August 28, 2010

Subsidies and Nutrition: an upcoming study reports and tries to get at the, well, one root of the problem:
In a 15-month experiment, a new federal initiative will offer some Massachusetts food stamps recipients a discount on fresh fruits and vegetables.... Beginning next fall, several thousand participants in the food stamp program, or Supplemental Nutrition Assistance Program (SNAP), living in Western Massachusetts will receive 30 cents off each dollar spent on fresh produce. The plan is part of a $20 million initiative outlined in the U.S. Department of Agriculture's (USDA) 2008 Farm Bill. Researchers will track shoppers' habits, controlling for other factors including income, race, and age, according to the Boston Globe....
Junk foods aren't actually cheap; our government just pays for them at the growing end in the form of enormous subsidies to large farms. The USDA spent $15 billion in subsidies to peanut, cotton, wheat, rice and corn farmers last year alone and spent less than one percent on produce farmers (the USDA recently announced it will stop reporting its subsidy data.)
What both of them are missing are the previous research on income and substitution effects.

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