Social costs
Health problems
This section will begin in what might be a seemingly odd place – government corn subsidies. Over the past decade, the Federal Government has given the corn industry more than $50 billion1. These payments have helped artificially lower corn prices, all the while leading to an overproduction of the crop. Overproduction has, in turn, deflated prices even further. Rather than curtailing production until corn prices rise due to demand, farmers tend to further expand production so their cash flows remain in the black. This never ending process of deflating prices and increasing production has led to a massive spike in the U.S. corn production – from 4 billion to 10 billion bushels since the 1970s2.
So, what happens to all of this excess corn? Some of it ends up in ethanol but most of it is processed and makes its way into other foods – primarily as additives, especially high fructose corn syrup. This is then added as an ingredient – or the main ingredient – in numerous foods, including ketchup, salad dressing, soda, cookies, and chips. Not surprisingly, these traditionally ‘unhealthy’ foods are some of the cheapest available, due to their extremely cheap ingredients. Calorie for calorie, these energy-packed, nutrient-poor foods are cheaper than fruits and vegetables3.
Unhealthy foods continue to fall in price
Unfortunately, these are the foods that we are eating more and more of. About 70% of the carbon in our bodies is derived from corn and the products made from it4. Between 1970 and 2000, the average daily calorie intake increased by about 530 calories – an increase of 24.5%. About 40% of that increase has come from grains (i.e. corn) – primarily refined grain products5.
This caloric increase, however, has not coincided with an increase in exercise or other energy-burning activities, and today more people are overweight and obese than ever before. 33.8% of the population is obese. Combined with those that are overweight, this proportion rises to 68%6. Between 1998 and 2006, the prevalence of obesity rose by 37%7. Disturbingly, 16.9% of children and adolescents aged 2-19 are obese8.
Obesity rates across the U.S.
The medical costs associated with obesity total around $147 billion each year7. Interestingly, on an individual basis, each year it costs near $5000 to be obese as a woman and about $2500 to be obese as a man. This takes into account health bills, loss of productivity, and increased gasoline usage. The discrepancy between men and women appears to be due to the idea that larger women earn less than skinny women, whereas size had no effect on how much money men made9.
Before concluding this section, it is worthy to mention that rising cancer rates, especially amongst children in heavy agricultural areas, possibly suggests that heavy pesticide use is leading to an increase in incidence of the disease10.
The collapse of the American farmer
As the consolidation of farms and food corporations occurs and economies of scale are achieved, the long idealized American farmer – symbols of freedom and self-reliance – is suffering and disappearing. This is probably best demonstrated by the plight of the modern chicken farmer.
Tyson Foods is the world’s largest chicken processor11. It is a vertically integrated company that breeds, slaughters, and processes chicken. However, it leaves the riskiest venture – the task of raising them, and the expenditures and risks that go along with that – to ‘independent contractors,’ the chicken farmers. Tyson sends its growers one-day-old chicks, feed, veterinary services, and technical services. It will continue to own the chickens and dictate exactly how they should be raised the 7 weeks they are on the grower’s property12.
Inside a chicken house
The chicken grower provides the land, the labor, the chicken houses, and the fuel – all requiring large amounts of capital. Most growers must borrow this money13. The typical grower owns about 3 houses, remains deeply in debt, and earns about $12,000 a year. About half of the chicken growers either sell out or lose everything after just 3 years14.
Chicken growers have little prospect of improving these conditions. Their contracts are short-term, can be terminated at any time, and leave little room for bargaining with the company15. Growers typically concede to the corporation’s demands and strict terms, afraid of losing their land and the massive amounts of debt they will be unable to pay off if they lose their contracts.
A similar story can be told in the other agricultural industries as well. The plight of the American farmer can probably be summed up with one disturbing statistic – the suicide rate among ranchers and farmers in the United States is now about three times higher than the national average16.