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Our Tax Dollars Subsidize Unhealthy Foods

Written by: Michael Greger M.D. on June 25th, 2015

Why do food companies sell junk? Because unhealthy commodities are highly profitable. This is in part because of their “low production cost, long shelf-life, and high retail value,” which create perverse incentives for industries to market and sell more junk. In a study highlighted in my video, Taxpayer Subsidies for Unhealthy Foods, researchers at the University of Cambridge stated, “Coca-Cola’s net profit margins, for example, are about a quarter of the retail price, making soft drink production, alongside tobacco production, among the most profitable industrial activities in the world.” One of the reasons production costs are so low is that we tax-payers subsidize them.

Distinguished UNC Professor of Nutrition, Barry Popkin, writes:

“For more than a century, Western governments have invested heavily in lowering the costs of animal products and some basic cash crops [such as sugar]. Accordingly, Western diets have shifted during the past century, especially after World War II, to include more animal sourced foods—meat, poultry, dairy, seafood, and eggs [as well as more sugar and corn syrup]. During this same period, however, we have begun to realize that a healthy diet actually requires fewer animal products and empty calories, and more vegetables, fruits, beans, and whole grains. Redressing this balance is a complex task requiring not only a shift in agricultural investment and policy, but also changes in social preferences that have developed over decades, in part due to dollar menu meat.”

Why is chicken so cheap? In the nine years that followed the passage of the ‘96 Farm Bill, corn and soy were subsidized below the cost of production to make cheap animal feed. So, U.S. tax-payers effectively handed the chicken and pork industry around $10 billion dollars each.

What if we instead subsidized healthy foods? Or taxed harmful ones? Every dollar spent taxing processed foods or milk would net an estimated $2 in healthcare cost savings. Every dollar spent making vegetables cheaper would net $3, and subsidizing whole grains could net over a one thousand percent return on our investment.

Unfortunately, we can’t count on Big Broccoli. The produce sector lacks the extensive funding that went to create the National Dairy Council, the National Cattlemen’s Beef Association, the National Pork Producers Council, and the American Egg Board.

Even if we removed the hundreds of billions of dollars in annual subsidies for animal products, it might not be sufficient to tip the balance in favor of healthier diets. According to Professor Popkin, “We have created societies in the West that value and consume meat, dairy, poultry, fish and seafood. Over several generations, a particular way of life has been promoted that has shifted expectations about diet to include large amounts of animal-sourced foods”—the concept that a meal centers around some hunk of meat.

The idea that animal products should form the basis of our diet has been scientifically debunked, but remains the social aspiration of billions of people. As we in the West slowly come to accept that our diets and eating habits are not healthy, it is to be hoped that this will change policies not only here, but throughout the world.

-Michael Greger, M.D.