You may pay $2 for your loaf of bread or $1 per pound of red potatoes. You pay your taxes, where some of your tax dollars go to subsidies issued by the government in the Farm Bill. But food cost is more than just money!
More money goes into food than your personal money. For example, all of our money helps keep farmers growing food for us to eat, as well as plants for us to wear (like cotton) and fuel our cars (like corn for ethanol).
The US agriculture business receives subsidies to help farmers reduce the risk of crop loss from bad weather, recessions, and change in market for demand of certain foods. Billions are paid annually in farm subsidies, with a large chunk of the money going to the largest farms and producers of commodities like corn, wheat, soy, and rice.
About $8 billion per year in recent years has been paid out for crop insurance, which is available for 100+ crops (however corn, soybeans, wheat, and cotton are main ones).
About $3.7 billion was paid out in Agriculture Risk Coverage in 2017, but this fluctuates year to year. A farmer can receive money for ARC if their revenue per acre falls below a guaranteed level (or benchmark). This program covers 20+ crops.
$3.2 billion in payments were made in 2017 for Price Loss Coverage subsidies. A reference price is set by Congress and if the national average price if a crop falls below the reference price, the difference is paid out to the farmer from this subsidy.
Over $5 billion a year is designated to pay farmers for Conservation Programs, to improve land that is being used actively for agriculture or to let land rest and not be used for agriculture that season. This helps prevent excess food production that may end up as food loss and waste.
Varying amounts of billions of dollars are also paid in farm subsidies for disaster aid, marketing, and agriculture and food research on behalf of the USDA.
But what is the true cost of food…beyond our paper money?
Water – the fresh water supply is dwindling. Some countries already face severe shortages. The US has seen drastic losses of some natural water sources, like rivers, lakes, and aquifers.
Fertilizers – nitrogen, phosphorus, potassium… they’re all added to soil in conventional farming in the form of synthetic fertilizers. Phosphorus and potassium require mining and there isn’t an unlimited supply of these crucial minerals needed for maximum produce food growth and production.
Labor – have you ever given a go at gardening? It requires hard labor, lots of time, planning, good weather, special tools, knowledge, healthy soil… imagine that one a much larger scale. This is the life of farming! We have a lot of people to thank for putting in the work that ends up on our dinner plates. #thankafarmer
Energy resources – we don’t farm like we used to. Big tractors and other machinery used in agriculture uses gas and oil. Transport of foods from farms to your store (plus possible processing of foods) do too. Do you see food growing around you locally? Food may be traveling hundreds or thousands of miles from farmland to your belly. Farm machinery and vehicles for transport use nonrenewable energy sources like oil and gas and are known to cause pollution.
Pesticides – these ward off pests that may be eating up crops before we ever get the chance. In turn, they also harm the bee and butterfly population as much needed pollinators, even farm workers who apply them.
Land – land can provide natural habitats for wild animals to promote ongoing biodiversity, urban areas for people to live in, parks or other recreational areas, or endless other options. Dedicating land to food production is very important! But it is a cost of food and takes a toll on the soil if not done with utmost care.
Unfair wages – not all food that is sold and eaten in the US is grown in the US. If we are importing food, like coffee beans and bananas for example, who is to say those farmers and farm workers were paid fairly or treated fairly? Did they work 14-hour days, 7 days a week with so little pay that they barely get by and can’t afford for their kids to go to school? Being unfairly paid is also being unfairly treated. Another potential cost of food is our pleasure at the expense of others’ livelihood.
Special equipment – watering systems, shovels, seeds and equipment related to seeding, materials for spraying chemicals (fertilizers, pesticides, fungicides, herbicides), big machinery, and so much more each require resources to make. These things also contribute to the true cost of food as most of this equipment is very costly and made from metals.
Storage – some produce (like leafy greens) need refrigeration which uses energy. In transport, these foods may require refrigeration also.
Knowledge – without a hella good green thumb, you won’t grow much except for weeds. Education and continuing education are needed in today’s food production system, especially with a rapidly growing human population and climate change challenges. This includes scientific research which is very costly.
Climate change and pollution – it sounds drastic but our current food system is affecting our world’s atmosphere, waters, and land (however, there are benefits to some forms of agriculture with special practices like organic farming or regenerative grazing! But these are not mainstream)
Packaging – most commonly plastic, many foods are pre-packaged before heading to your supermarket or tossed into plastic bags before you leave the store. Some items may be double- or triple-wrapped, for example pre-packaged small bags of carrots packaged together in big bags that was also previously packaged in boxes on pallets. Packaging can help keep food fresh and protected from damage, but it’s not always necessary and things can be done on our part to reduce any extra packaging (like bring our own bags).
Cooking – cooking may use electricity or gas, even wood or coals. Just a few more resources used before food is ready for consumption. This part is necessary for many foods! But doing our part to eat these prepared foods is important to avoid loss of resources if they spoil and have to be thrown out.
1. Congressional Budget Office, “Options to Reduce the Budgetary Costs of the Federal Crop Insurance Program,” December 2017, page 6.
2. U.S. Department of Agriculture, Farm Income and Wealth Statistics, Government Payments by Program,” February 7, 2018, http://www.ers.usda.gov/data-products/farm-household-income-and-characteristics.aspx.
3. Vincent H. Smith, Joseph W. Glauber, Barry K. Goodwin, and Daniel A. Sumner, “Agricultural Policy in Disarray: Reforming the Farm Bill — An Overview,” American Enterprise Institute, October 2017, page 5. ffff