Health, Food, Agriculture and Environment

The debate on the obesity epidemic and its relationship to the food choices made by consumers has been high on the public agenda over recent weeks.
Much of the problem (but not all of it!) can be attributed to food choices that we make. This include choices about types of food we buy, quantities that we buy and consume, the health attributes of food (e.g. sugar, fat, salt content), and where we purchase food .
It seems that the problem lies in a ‘market failure’ in the food supply chain where prices of food do not reflect the possible private and public health costs associated with certain food choices. Some people might be making food choices that are largely driven by disposable income considerations and the prices of those foods, ignoring the possible long-term negative health consequences of those choices. Those particular food choices maybe harming the health of those who choose them, but the food prices do not reflect that harm. This is the basis of the argument for imposing a tax on potentially unhealthy food attributes such as sugars, fats and salts.
Of course, there are many counterarguments to unhealthy food taxation (even though they do not seem very convincing when they come from the Head of the Australian Beverage Council!). At any rate, the focus of this post is not on the ways society could address this market failure problem, but rather on the implications for agriculture and environment.
Agriculture is at the source of the food supply chain, and it carries a lot of responsibility for the types and healthiness of the food that is being offered to consumers. Given that foods with high sugar contents have been pointed out as some of the key culprits for the obesity epidemic it is perhaps interesting to look at the sugar crops agricultural sector. It is one of the agricultural sectors most subject to protectionism throughout the world. This is true in the US, the EU and in Australia. It is also one of the agricultural sectors with the highest environmental footprint, which has been especially significant in Australia, given the effects from sugar cane farming on the Great Barrier Reef.
So, one may imagine that dropping the protectionist policies would result in producing a bit less of the sugar crops, which would be a good thing for the health of the population, and for the environment. It will raise the price of sugar, which should discourage manufacturing of high sugar content foods and drinks, as well as their consumption.
But beyond the sugar crops sector, the long-term implications of the obesity debate for agriculture are that we will need to come up with ways of producing less crops that are high in sugar and starch content, and switch to crops with greater protein, and minerals and vitamin contents. Currently the key crops being grown globally are all sugary and starchy in nature: take rice, wheat, and corn as examples (and combine them with sugar cane and sugar beet to get the top five crops globally by tonnage harvested!). Perhaps it is no wonder that we are having the obesity epidemic given that our agriculture is so much biased towards growing crops that are high in sugar and starch content! In addition, the environmental effects associated with some of these crops are very significant.
In summary, something will have to be done about the obesity epidemic. It will more then likely involve implementing policies that will address the ‘market failure’ in the food supply chain, so that the prices that we pay for food better reflect the healthy or unhealthy attributes of that food. This will likely put in train significant changes to the global agricultural industry, steering it away from starchy and sugary crops, which have been its mainstay for too long. It will be a good outcome for human and environmental health!

Author: Tiho Ancev

Tiho Ancev is a Professor of Agricultural and Resource Economics in the School of Economics, University of Sydney. His main research areas are agricultural, environmental, natural resource and energy economics. Tiho’s main contributions have been in water economics and policy, economics of energy, economics of air pollution and climate change policies, and economics of precision agriculture and agricultural input use. He has published widely on these topics in top international peer reviewed journals. Tiho has led and contributed to national and international research projects in these research areas. He is currently the Managing Editor-in-Chief of the Australian Journal of Agricultural and Resource Economics.