The Deadweight Losses of American Food Policy

A Washington Post op-ed viciously attacked President Obama on the grounds that he does not have a comprehensive food policy in place.  Instead, the federal government is funding the Affordable Care Act while simultaneously subsidizing the agricultural components of disease-causing junk food.  For example, the federal sugar subsidies decrease the costs of soda production, a drink whose consumption is related to obesity and diabetes.  The contradictions that exist within the federal government’s approach to food policy extend further than the ACA.  Farming is one of the primary emitters of methane, a “potent greenhouse gas” but EPA rules are voluntary for agriculture.     

It appears that the author is describing the deadweight losses associated with regulatory rents that have been sought by various industries.  The author cites instances in which the Obama administration attempted to protect the public good but failed.  Such failures include trying to regulate antibiotic use in agriculture, which would reduce negative health effects but likely raise costs for farmers.  The increase cost to farmers may have prompted lobbying against such a policy.  President Obama also pursued policies to protect farmers and consumers from “agribusiness oligopolies” by using anti-trust laws, but this also failed.  It is very possible, if not likely, that farms that stood to lose from these policies lobbied against them and were able to prevent their enactment.  However, since these policies had potential public benefits, their defeat maintains the significant deadweight losses faced by citizens.