Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter.
Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.
Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.
OCR for page 83
7
Reflecting on the Path Forward
T
hroughout the workshop, individual participants reflected on the
presentations and discussions and shared key considerations for
strategies going forward. This chapter is a compilation summary of
all the open discussions, organized into five major themes:
1. The concept of externality and whether externalities are the best way
to frame a full-scale accounting of the cost of food
2. The importance of recognizing trade-offs among costs and benefits,
for example, the trade-offs associated with large- versus small-scale
production
3. The challenge of quantifying effects and the level of uncertainty
around many estimates
4. Opportunities for more data and research, but also concerns that
sufficient data in some areas are being overlooked
5. The daunting challenge of measuring a single “true cost” of food
ARE EXTERNALITIES THE BEST WAY TO FRAME THE PROBLEM?
Participants expressed some disagreement about whether certain effects
should be included in a full-scale accounting of the cost of food. Some par-
ticipants argued that even though the external cost of diet-related cardio-
vascular disease may be internalized through health insurance premiums,
cardiovascular disease nonetheless imposes a cost to society that exceeds,
or is different than, its internalized value. For example, during his presenta-
tion, Steven Wing argued that many external costs of the food system are
83
OCR for page 84
84 EXPLORING HEALTH AND ENVIRONMENTAL COSTS OF FOOD
strongly related to health inequalities, with certain populations bearing a
disproportionate amount of those costs. That unequal distribution is not ac-
counted for in a model based on externalities. Some participants wondered
if there is another model or approach that could be used that accounts for
distribution. The implications of building a framework based on a broader
view of costs are unclear.
James Hammitt offered an explanation. The concept of externality falls
under the purview of welfare economics, which is an attempt to quantify
the well-being of people. When quantifying the costs and benefits associated
with an activity, welfare economists quantify in dollar amounts those costs
and benefits as perceived by the individuals actually benefiting or being
harmed and then add those quantities across society. If some policy action
is expected to have society-level benefits that exceed society-level costs, in
principle those people who gain from the policy could “transfer” some of
their gains to those who are harmed so that everyone would be better off
after the transfer is made. In other words, Hammitt said, “you can think of
it as expanding the size of the social pie.” If externalities can be corrected
through policy, that is, if they can be internalized, then “we can make the
pie bigger.” But how that pie is divided across people is a separate ques-
tion. He said, “If we don’t like the distributional effects of that, we can
redistribute using other mechanisms. Rather than foregoing the opportunity
to increase the size of the social pie, we should go ahead and increase it,
and then redistribute it.” Not implementing a policy that imposes costs on
a subset of the subpopulation while providing benefits that exceed costs
overall is, in his opinion, an “extreme position.” There are more efficient
ways to redistribute well-being than to not implement a policy because it
will increase the cost to a subset of the population. In the case of a food
policy that increases overall well-being but increases the cost of food to
poor people, he said, “It is much better to deal with the poverty directly.”
Anna Alberini added that, although economists are primarily concerned
with the size of the pie, few agencies conduct cost-benefit analyses without
also conducting regulatory impact analyses to deal with those distributional
issues. She said, “Considerations of this kind do indeed take place.”
Still, some participants wondered whether there might be other eco-
nomic strategies, such as ecological economic models, that could provide
other ways to frame the discussion. Helen Jensen responded that, yes, there
are other approaches, but none of those approaches take away from the ba-
sic understanding of externality. Jayson Lusk warned, “If we are not going
to use the externality argument, there needs to be some rational argument
for what the basis is of some policy recommendation.” He explained that
externalities represent an opportunity for interventions that allow people
to benefit by their own account. The alternative is paternalism. He said,
“With children, most people are more open to using paternalism as a jus-
OCR for page 85
REFLECTING ON THE PATH FORWARD 85
tification for public policy. People like myself are a little less willing to use
that justification on the average population.”
Lusk’s response triggered some comments about choice and how be-
havior in the real world differs from behavior in economic models. For
example, Aaron Wernham expressed concern that the policy environment
might drive choice as much as the market does. Also, earlier during the
workshop, there had been a question about whether lack of choice in food
deserts (i.e., areas without access to food) can be factored into a model
based on externalities and responding remarks about how lack of access to
food is a social issue, not a market issue, and therefore cannot be analyzed
within the context of externalities. (See the summary of James Hammitt’s
presentation on public health effects in Chapter 3 for more thoughts on the
challenge of analyzing effects impacted by “real-world” behavior.)
TRADE-OFFS1 ASSOCIATED WITH DIFFERENT
SCALES OF ANIMAL PRODUCTION
The importance of trade-offs was a major overarching theme of the
workshop discussion, from keynote speaker Katherine Smith’s admonition
that “everything is relative” onward. Smith cautioned that a cost is only
a cost relative to something else. Most subsequent discussion of trade-offs
revolved around those associated with large- versus small-scale production.
An audience member remarked that agriculture in the United States has
undergone a major transformation over the past century from many small
independent producers to a small number of large, sometimes global, cor-
porations controlling sectors of the food system. At the same time, accord-
ing to Michael Doyle, there has also been a recent drive in the United States
and across Europe toward a small-scale way of farming food animals. These
trends raise the questions: What are the costs and benefits of large- versus
small-scale animal production? What are the implications for food safety,
water and air quality, and manure management? How are local communi-
ties impacted? What are the costs and benefits to the farmers themselves?
In some experts’ opinion, arguably one of the greatest benefits of large-
scale production is its economy of scale, with large-scale production being
more efficient and more cost-efficient. However, one audience member
remarked that the economy of scale afforded by large-scale production
may shift at a certain “tipping point,” beyond which further production
actually creates greater costs than benefits. For example, there may be a
point at which raising too many pigs turns manure from a commodity into
1 Atrade-off is defined here as an exchange of one effect for another when a different deci-
sion, policy, or practice is implemented.
OCR for page 86
86 EXPLORING HEALTH AND ENVIRONMENTAL COSTS OF FOOD
a toxic problem. The participant wondered how that “tipping point” could
be factored into a true-cost accounting of the food system.
A challenge brought up in regard to meat production was how to de-
sign a different system that would produce the amount of meat equivalent
to that produced by concentrated operations and in a safe manner. Presum-
ably, the costs to the environment of a small animal production system
versus a concentrated production system would be similar as long as the
total amount of animals produced is the same. In this respect, a participant
remarked one of the goals should be to raise fewer total animals. He said,
“The epidemiological evidence is overwhelming that our high meat diet is
unhealthy.”
John Antle identified loss of farmer income as a cost of small-scale
animal production. Much of what is driving the trend toward large-scale
farming, he said, is the desire to generate household incomes that are com-
parable to those earned by professionals in nonagricultural sectors. For
example, a wheat farmer in Montana cannot generate an income greater
than about $30,000-$40,000 a year without more than 3,000-4,000 acres
of land. He said, “you have got to keep those factors in mind. . . . There
are fundamental economics driving what we see in terms of the scale of
production.” Some audience members agreed that economics are driving
the trend toward large-scale production, that any policy changes aimed at
reducing some of the external costs associated with large-scale production
would need to be done very carefully, and that choices about trade-offs
would be paramount.
An audience member observed that the export of finished meat prod-
ucts is another factor driving the trend toward large-scale production, and
that the cost of global trade also needs to be considered when evaluating
the trade-offs associated with small- versus large-scale production.
UNCERTAINTY ABOUT THE MAGNITUDE OF SOME EFFECTS
Another major overarching theme of the open discussions was the chal-
lenge of quantifying effects. Throughout the workshop, participants consid-
ered a range of methodologies for quantifying health, environmental, and
other impacts. Some methodologies seem especially well suited for certain
effects. For example, participants in one of the working groups described
LCA as the tool of choice for examining GHG emissions. But for other ef-
fects, like the cost of antimicrobial use in food animals, varying opinions
were expressed on whether risk assessment would be a feasible strategy for
covering all antibiotics across every animal species. Some workshop partici-
pants opined that the greater challenge is not quantifying effects, rather it
is quantifying them with certainty. Many participants noted that the level
OCR for page 87
REFLECTING ON THE PATH FORWARD 87
of certainty about the magnitude of effect varies tremendously, with some
effects being very clearly associated with sources and others not. Indeed,
some effects cannot be quantified at all. Hammitt mentioned that costs in
the NRC (2010) energy report were calculated with uncertainty ranges (see
Table 5-1 in Chapter 5).
Several factors contribute to this uncertainty, not the least of which
is the heterogeneous nature of the food landscape. Several participants
commented at numerous times on the tremendous variation in production
that exists across both space and time, which creates both analytical and
data challenges. Another contributing factor is the complexity of the food
system and the challenge of teasing apart pathways. As just one example,
while almost the entire workshop discussion was on food products, an
audience member pointed out that the same systems that produce animal
food products also produce nonfood by-products (e.g., hides, fats, phar-
maceutical products). He asked how costs and benefits should be allocated
between food products versus nonfood by-products. Hammitt replied that
there is “no non-arbitrary way” to allocate external costs (and benefits)
associated with raising animals across all of the various products. Rather
than considering total costs and how to allocate those costs, he suggested
considering marginal changes that would occur if animals were raised in
a different way. John Antle opined that if externalities were addressed at
the production level (e.g., by taxing or otherwise imposing measures that
impact industry decisions about production), they would be appropriately
valued into the system at that level and reflected in the cost of product and
by-product production. Marty Heller agreed with Antle that the problem
could be approached from that sort of “system expansion perspective,”
whereby all of those other components (i.e., by-product production path-
ways) are incorporated into the analytical model, but cautioned that an
analysis of impacts of the food system in particular may still require some
sort of allocation of costs among food versus nonfood products.
OPPORTUNITIES FOR MORE DATA AND RESEARCH
For some effects, lack of sufficient data may also contribute to uncer-
tainty about the magnitude of those effects. There were many calls through-
out the workshop for more data and research. For example, there was a call
during the public health effects break-out group for more research on the
health effects of exposure to hormones in animal food products. As another
example, during her presentation Anna Alberini listed four understudied ar-
eas that she thinks represent fertile ground for new research on food-related
valuation: (1) willingness to pay (WTP) to reduce dietary cardiovascular
and diabetes risks; (2) WTP to reduce endocrine disruption risks (i.e., which
OCR for page 88
88 EXPLORING HEALTH AND ENVIRONMENTAL COSTS OF FOOD
have been linked to certain pesticides); (3) WTP to reduce effects on the
reproductive system; and (4) WTP to reduce antibiotic resistance.
For some phenomena, it is not clear whether more data are needed or
whether existing data need to be more thoroughly analyzed or interpreted.
For example, one participant asked whether more research is needed on
populations that tend to be excluded from research studies. Steven Wing
responded that, in some cases, “we have a lot of data, but we are not paying
attention to the data that we have.” The greater challenge, in his opinion,
is the question(s) being asked. He mentioned a long history of research on
questions that are of economic interest to producers and a short history
of research on questions related to the health and environmental impacts
of production systems. “So do we need more [data]? Maybe we do,” he
said. But the lack of information is also a result of “who is at the table.”
As another example, a participant questioned the call for more scientific
evidence on the association between antimicrobial use in food animals and
antimicrobial resistance in humans. He implored that scientists have known
about the cost of antimicrobial resistance for decades, since the 1969 Swann
Committee report (Swann et al., 1969). Yet, the demand for more data
persists. Why? He called for more discussion on the political nature of the
debate about antimicrobial use in food animals.
THE DAUNTING CHALLENGE OF
MEASURING “THE” COST OF FOOD
Early on during the workshop, an audience member commented on
the complexity of the food system and its wide range of effects and asked
whether there was a way to ensure that all costs and benefits have actu-
ally been measured. He said, “What if I miss something? . . . The ultimate
answer would be just wrong.” Even if the focus is on marginal costs, not
total costs, still the dimensions of that margin need to be known. “To some
extent,” he said, “I have sort of despaired listening to this conversation.”
John Antle expressed similar concern about the wide range of effects, not-
ing that policies that fail to consider important consequences “really mess
things up.”
Given what she characterized as “squishiness” from a lack of data and
problems with analyzing those data, Katherine Smith questioned the inten-
tion of tallying up all costs and benefits to derive an estimate of the total
“true” cost of food. She suggested evaluating the effect of public policy on
one “dimension” or on the trade-offs between a couple of dimensions of
the food system, instead of calculating total cost. Jayson Lusk and others
agreed that analyzing the costs and benefits of specific interventions might
be a more feasible research strategy than estimating the “true” cost of food.
OCR for page 89
REFLECTING ON THE PATH FORWARD 89
WRAP-UP
There is no obvious best research strategy for conducting a full-scale
accounting of the external costs and benefits of the food system. Activities
at all stages of the food life cycle have tremendously far-reaching and wide-
ranging consequences for the environment, human health, the economy, and
society at large. Workshop participants considered a range of methodolo-
gies to consider, from LCA to HIA, yet many questions remain about how
to quantify effects with an acceptable level of certainty and how to analyze
effects that cannot be quantified. Measuring and valuing the “true” cost(s)
of food is made all the more difficult by widely divergent expert opinions
about how to even frame the challenge—within the context of economic
thinking about externalities, or otherwise. The participants had differences
of opinion on whether focusing on externalities in the strict economic sense
(see Box 1-1) is too limiting.
While the goal of the workshop was not to reach any conclusions or
make any recommendations, some personal opinions were expressed about
how to move forward. There were a couple of calls for conducting a more
systematic and comprehensive consideration of potential effects, method-
ologies for measuring those effects, and limitations of the methodologies.
While the small group break-out session was a valuable exploratory exer-
cise, the opportunity for even more work persists. For example, one group
opted not to work with the matrix because it would have been too time-
consuming given how much is known about GHG emissions and energy
use. Another group did not have enough expertise at the table to consider
some issues.
In addition to more thoroughly considering potential effects and meth-
odologies for quantifying and valuing those effects, there were many calls
for a reconsideration of the intention of a full-scale accounting of the “true”
cost of food. Several participants questioned not just the feasibility, but also
the applicability, of assembling a list, or matrix, of all potential costs and
benefits and trade-offs, and suggested instead a more selective examination
of the food system from a policy perspective. That is, examine a policy or
intervention and its potential impact on costs and benefits rather than the
costs and benefits of the food system as it is.
While a full-scale accounting of the external costs and benefits of the
food system will undoubtedly be a challenging endeavor, this information-
gathering workshop was an important first step in showcasing the range
of expertise, methodologies, and information sources that could be used
to pursue that endeavor. Although the U.S. food system provides multiple
benefits, those benefits could be expanded even further with a better un-
derstanding of how decisions made along the entire course of the food life
OCR for page 90
90 EXPLORING HEALTH AND ENVIRONMENTAL COSTS OF FOOD
cycle adversely impact the environment, public health, and community
economic development.
REFERENCES
NRC (National Research Council). 2010. Hidden costs of energy: Unpriced consequences of
energy production and use. Washington, DC: The National Academies Press.
Swann, M. M., et al. 1969. Report of the Joint Committee on the Use of Antibiotics in Animal
Husbandry and Veterinary Medicine. London: Her Majesty’s Stationery Office.
