Some of you may know that the Department of Justice has been holding agriculture antitrust workshops over the past year, culminating with the final workshop this past week in Washington, DC. You can catch some of it on C-Span, including what I am writing about here. I am going to leave aside things from this panel like what farmers make in relation to prices charged for food, and focus on one of the panelists, because listening to his patter you’d think we were living in a Golden Age here in the US.
Erik Leiberman, the panelist representing the Food Marketing Institute for the “Food Chain Supply Competition” portion of the workshops, rattled off some impressive-sounding statistics about how much Americans spend–or rather, don’t spend–on food. Statistics that I decided to check out. Since the FMI is an Corporate Ag entity, I was surprised at how uninformed and unprepared Mr. Lieberman seemed, and I was also surprised at the lack of research that went into his spiel. Sadly, it seemed like another example of agribusiness not taking concerns seriously. Apparently, a Department of Justice panel wasn’t important enough for them to take time to at least prep their representative on rhetoric and sincerity. Michele Simon, author of Appetite for Profit: How the Food Industry Undermines Our Health and How to Fight Back, was at the panels: “I expected to hear an industry shill parrot the corporate line, but this guy couldn’t even be bothered to sound convincing. He kept looking down at his notes to read from his talking points, which didn’t exactly endear him to the already skeptical audience. This was in contrast to others who came better prepared and in the case of actual farmers, spoke from the heart.”
I get that corporation have to make money. We all have to make a living. Really, though, there should be some expectation of doing it in an ethical, informed, and responsible manner. This would entail knowing what you’re talking about when you speak about your business, especially when you speak in hard numbers. Mr. Lieberman not only lacked empathy or apparently emotional connection to a subject so many at the panels (and around the US) were passionate about, he also either lacked the staff to collect appropriate date or the data itself is intentionally misrepresented. I don’t expect everyone to know every detail about every facet of the business they’re in, especially if it’s a large business and they’re not the CEO; but, I do expect that if they give numbers and make correlations using those numbers that they at least 1) have the right numbers and 2) have some idea what those numbers actually mean.
During the hour-and-a-half panel discussion, Lieberman kept coming back to his assertion that the “True cost of food declined consistently over…many decades. This is despite the USDA’s price index showing steady increases of 2-6% or more a year. Some items increased even more dramatically: ” In 2007, retail milk prices rose 11.6 percent, and egg prices were up 29.2 percent, while vegetable oil and bread prices are expected to increase 9 percent or more in 2008.” Yet, upon questioning by other members of the panel, Mr. Lieberman continued to insist prices were falling steadily. If I can find these statistics online with a quick google search on the USDA website, I’m not quite sure why Mr. Lieberman couldn’t, too.
He also asserted that US consumers spend only 9% of their disposable (after-tax) family income on food: 5.5% at home, he other 4% eating out (yes, I realize that doesn’t equal 9%). His statistics directly conflict with government agency statistics regarding how people spend money. According to the US Department of labor, in 2009, Americans spent 12.99% of their family income on food (7.56% at home, the rest eating out), up from 12% in 2008. According to the USDA, Americans spent 9.9% of their disposable income on food way back in 2005. Percentage of household income spent on food has actually risen in recent years, not decreased, as have prices.
Another bit of information not mentioned is that “average” isn’t really indicative of much. The poor and lower-class spend a far larger amount of their income, about 25%, on food. The upper-middle class and wealthy significantly less. As Forbes says: “The more Americans make, the less they spend on food.”
And, many people spent essentially nothing at all, because they are on government nutrition assistance programs such as SNAP or WIC, and that doesn’t count in these statistics as a percentage of disposable income spent. Since many people using SNAP do have an income, their income is counted into the numbers used to get these statistics, but the amount spent on food using food stamps is not. Since 2008, the number of people on these assistance programs has increased dramatically. According to new USDA statistics just out (thank you Marion Nestle for pointing me to these), the number of people receiving SNAP benefits rose from 28.2M in 2008 to 40.3M in2010. That’s an increase of 12M people, and approximately 31 BILLION dollars, that is being spent on food but not tallied into Mr. Lieberman’s impressive-sounding statistics.
All this leads back to Mr. Lieberman’s continued and repeated assertion was that food prices have dropped, and that spending less of our national household income on food ” has “raised quality of life in our country.” He compares what we spend to France and Spain, who he says spend about 15% of family income on food. “You can see how that raises quality of life in our nation,” says Mr. Lieberman. (I haven’t found the French and Spain stats for myself yet, largely because I don’t speak French or Spanish–please let me know if anyone out there has these stats.)
Let’s do some basic comparison, shall we? I’ll use Mr. Lieberman’s spending statistics, just for fun.
Issue US France Spain
Food spending 9% 15% 15%
Overweight adults 60% 9% 13.4%
Overweight Children 33% 13-15% 25%
Type 2 Diabetes, Adult 25.9% 3.5% 10%
Heart disease Death* 106.5 39.8 53.8
*per 100,000 people
I think you get the idea here. I have no idea why Mr. Lieberman thinks that paying less for food has anything at all to do with quality of life. Diabetes, obesity, coronary disease…these have all increased dramatically as we decrease what we spend in food. I can’t speak for all Americans, of course, but I suspect that the majority would agree with me that “increased quality of life” is measured by health and well-being as well as dollars and cents. Looking at the statistics above, even if Mr. Lieberman’s 9% was accurate, it wouldn’t follow that the reduction in spending on food equals a better life.
For me, at least, increased quality of life doesn’t mean being sick and fat, even if it means I only have to spend 9% of my disposable income to get that way.
Despite Higher Food Prices, Percent of U.S. Income Spent on Food Remains Constant., Annette Clauson. http://www.ers.usda.gov/AmberWaves/September08/Findings/PercentofIncome.htm
How The Average US Consumer Spends Their Paycheck, VisualEconomics.com. http://www.visualeconomics.com/how-the-average-us-consumer-spends-their-paycheck/
Americans Spend Less Than 10 Percent of Disposable Income on Food, Winston-Salem News. http://www.salem-news.com/articles/july192006/food_prices_71906.php
OECD Health Data, 2010. http://www.oecd.org/document/16/0,2340,en_2649_34631_2085200_1_1_1_1,00.html