Tom Philpott

The Coming Threat to Your Craft Brew

| Fri Nov. 16, 2012 1:44 PM EST
These are a few of my favorite things—and I like to be able to find them on the retail shelf.

Over at Washington Monthly, Tim Heffernan has an in-depth piece on a topic dear to my heart: the stunning consolidation of the US beer industry. He points out, as I have before, that two vast, globe-spanning companies, SABMliler and Anheuser-Busch InBev, control 80 percent of the US beer market. Heffernan argues that the two companies have essentially hit a wall in getting much bigger here—consolidation is already so extreme that there just isn't much more consolidating to do without provoking the ire of antitrust authorities. To increase their profits, he shows, the companies are moving toward a vertical-integration strategy: gunning for control of the distribution and wholesaling. That way, they can grow by extracting more revenue and profit out of each dollar Americans spend on beer.

Heffernan takes an odd angle to set up his story. Hyperconsolidation of the kind seen in the beer industry drives down consumer prices, he writes, and low prices for alcohol lead to excessive drunkenness. More on that below—I think Heffernan might be off here. But what caught my eye was his discussion of the way the beer giants are squeezing suppliers and wholesalers to take control of the retail shelf—and potentially squeezing out independent craft brewers, whose wares (which I adore) have taken off in the past 20 years even as the giants consolidated.

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The 5 Unfinished Items That Will Shape Obama's Food and Ag Legacy

| Wed Nov. 14, 2012 7:03 AM EST

President Barack Obama enters his second term with a complex record on food and farm policy. Eight months into the first term, I assessed the administration's record like this:

Like a tractor driven by a drunk, the Obama administration keeps zigzagging on food/ag policy–sometimes veering in the direction of progressive change, other times whipping back toward the agrichemical status quo.

That assessment held up pretty well—the "whiplash" I was getting from the early policy zigzags has settled into a permanent state. And that's reflected in the impressive list of unfinished food and ag policy business the administration carries into its second term. On all of these issues, the administration could go either way, and there's no telling now which.

But one thing is pretty clear: The time frame for resolving them in progressive ways is limited. "The window for getting things done is about 18 months,"  said Scott Faber, vice president for governmental affairs for the progressive Environmental Working Group. After that, the political class will be engulfed in the 2014 midterm elections—and the administration will likely turn cautious, reluctant to offend interests that might fund the opposition.

Here they are:

1. The farm bill: The basic outlines of food and farm policy are set out in the once-every-five-years farm bill. Congress and the president were due to hammer one out in the 2011-12 session. The White House gave Congress very few signals of what it was looking for in the farm bill, and Congress responded with proposals that enshrined agribusiness as usual (with the tweak of replacing direct payments to corn, soy, and other commodity-crop farmers with new crop-insurance subsidies), adding a bracing dose of austerity for people who rely on government aid for food.

The Senate ended up with a farm bill version that I judged could have been worse (but was actually pretty bad); the House ag committee responded with one that preserved the worst parts of the Senate plan (sellouts to agribiz interests in the form of crop-insurance subsidies) and added deep cuts to the critical food-aid program SNAP, formerly known as food stamps. But then the bill died in the House before the election, buried in a war among GOP factions over just how deeply SNAP could be cut and whether insurance subsidies favored by Big Ag interests could be tolerated in an age of fiscal austerity.

Now the farm bill has entered a chaotic phase. The lame-duck Congress could still get it together to pass one, but Ferd Hoefner, the policy director of the Washington-based National Sustainable Agriculture Coalition, told me it's "a long shot" that the Senate and House versions will be reconciled before the clock runs down on 2012. If a deal hasn't been worked out by the holiday recess, then the farm bill process starts from scratch along with the new Congress in 2013.

If that happens, will the administration use the political capital it won in the election to push a progressive new farm bill? That's "theoretically possible," Hoefner told me; but it's "probably unlikely, given that they basically just sat and watched the process" in 2012. In other words, in the coming year, expect Obama to sign something that very much resembles what the House and Senate came up with last year.

Charts: How Big Pork Screws Small Towns

| Mon Nov. 12, 2012 7:08 AM EST

I've argued often that the food system functions like an economic sieve, draining away wealth. Imagine, say, a suburb served by a handful of fast-food chains plus a supermarket or Walmart or two. Profits from residents' food dollars go to distant shareholders; what's left behind are essentially low-skill, low-wage clerical jobs and mountains of generally low-quality, health-ruining food.

But the food system's secret scandal is that it's economically extractive in farming communities areas, too—and especially in the places where industrial agriculture is most established and intensive. I first learned about this surprising fact from the Minnesota-based community economics expert Ken Meter, specifially this 2001 study on a farm-heavy region of Minnesota. And now Food and Water Watch, working with the University of Tennessee's Agricultural Policy Analysis Center, has come out with an excellent new report documenting the food industry's effect on several ag-intense regions, with the main spotlight on the hog-centric counties of Iowa, the nation's leading hog-producing state.

The structure of Iowa's hog farming went through a dramatic change starting in the early 1980s. As this FWW chart show, first, the number of hog farms in the state declined.

All charts by Food and Water Watch. All charts by Food and Water Watch. At the same time, the total number of hogs raised in the state nearly doubled.

Accordingly, the remaining hog farms scaled up dramatically, growing by a factor of nearly 11 between 1982 and 2007:

What caused this epochal change? According FWW's analysis, it was driven by the increasing consolidation of hog packing. Packers are the companies that buy hogs from farmers, slaughter them, and cut them into chops, bacon, and the like. In the 1980s, the meatpacking industry began what economists call a consolidation wave—big companies buying smaller companies and consolidating operations into bigger and bigger processing facilities. As the pork packers got bigger and bigger, they were able to use their market weight to force down the per-pound price they paid farmers for their hogs.

To assess the level of an industry's concentration, economists use a measure they call "CR4"—the percentage of a market controlled by the four biggest companies. "In most sectors of the US economy, the four largest firms control between 40 and 45 percent of the market," FWW writes. At CR4 levels above 40 or so, the reports continues, markets start to lose competitiveness—the big firms have power to dictate terms to their suppliers, in this case, farmers. Look at how CR4 has grown nationally since 1982:

In Iowa, the situation is even more stark. CR4 levels have edged down slightly in recent years, but remain near 90 percent. That means that many hog farmers must either sell to one of the Big Four—Smithfield, Tyson, JBS, and Cargill—or exit the business altogether. As noted above, 80 percent of the farms selling hogs in Iowa in 1982 took the latter route. Most of the rest of them scaled up—and saw the prices paid them by the Big Four plunge. As the next chart shows, the real (inflation-adjusted) price farmers get for each hog fell by more than half between 1982 and 2007.

Now here's the kicker. When you look at the state as a whole, Iowa's hog farmers were bringing in more money, in inflation-adjusted terms, in 1982, when they raised 23.8 million hogs, than they did in 2007, when they raised 47.3 million hogs.

This is a great deal for the Big Four packers—they're getting nearly twice the pork, for less total money. For the farmers, it's a different story.

People who live within smelling distance of large hog farms have higher incidences of high blood pressure.

Now, Iowa's hog farming used to be widely distributed across the state—most farms raised some hogs along with corn, soy, and other crops. As farms either exited hog production altogether or scaled up dramatically, hog farming got more and more concentrated into a handful of counties. You might think that people who live in these hog-centric counties got some economic benefit from the vast scaling up of hog production. At least you'd hope so—as I learned on a 2007 trip through one of those counties, Hardin (report here), it's no fun to live in industrial-hog country. Such areas are marked by clusters of bleak hog houses, each containing as many as 2,400 animals—as well as fetid, foul-smelling manure cesspools (known as "lagoons") and horrific periodic spraying of nearby fields with liquid shit rife with antibiotic-resistant bacteria. A recent study from University of North Carolina-Chapel Hill researcher Steve Wing showed that people who live within smelling distance of industrial-scale hog farms have higher incidences of high blood pressure.

Well, Food and Water Watch found that hog-heavy Iowa counties don't do better economically than other counties—the opposite, in fact. The next chart compares real median annual household incomes in hog-heavy counties (based on the total number of hogs sold each year) with the statewide average.

Note that in '82, hog-heavy counties had slightly higher-than-average median incomes. After 25 years of scaling up, that reversed itself. Overall, the state's average median income rose by 14.5 percent over the time period, while median incomes in the state's hog-intense counties grew by just 10 percent.

Food and Water Watch also finds evidence of growing inequality in the hog counties—while real median incomes grew by 10 percent between '82 and '07, average incomes jumped by about a third. "The rise in real per capita income alongside a less robust increase in median household income suggests that earnings are being captured by a smaller portion of more well-off people in counties with high hog sales," FWW writes.

Why the dismal economic performance in the counties that house Iowa's booming pork industry? It costs money to run a big farm, and the larger the farm, the less of those farm expenditures go to local business, FWW found. Large farms buy about a third less per hog worth of goods from local businesses than small farms, the report shows. And that's a third less money circulating through local economies, building wealth and creating jobs. The study found that for the average Iowa county, the average number of nonfarm local businesses grew by about 30 percent between 1982 and 2007. For the hog-heavy counties, though, the average number of such establishments fell by more than 10 percent.

Not surprisingly, while the average Iowa county saw robust growth in total jobs over that period, for hog-heavy counties, total jobs dropped.

I would be remiss if I didn't mention the economic story for meatpacking and processing workers—the people who slaughter, cut, and package Iowa's vast annual hog crop. As Ted Genoways' blockbuster 2011 Mother Jones piece shows in graphic detail, conditions have grown quite grim on the slaughterhouse floor. The following chart looks at real annual earnings for packers (workers who slaughter live animals) and processing workers (people who turn carcasses into sellable products). This is a story of full-on immiseration—what were once middle-class jobs now pay poverty-level wages.

Here's how FWW sums the situation up:

Counties with more hog sales and larger farms tend to have lower total incomes, slower income growth, fewer Main Street businesses and less retail activity. General employment levels have suffered, wages in meatpacking have declined and farm job opportunities are more difficult to find. In spite of what Big Pork boosters have said, there is little evidence that the trends in Iowa hog production have been good for Iowa’s rural economies.

Now, in their defense, the meatpacking giants often counter that the changes described here are necessary for the provision of cheap food. To deliver you a bountiful supply of pork chops, farmers and workers must be squeezed. But here, too, FWW brings a cold slap of reality. The report finds that when hog prices rise, the pork packers tend to pass on the increase to consumers "completely and immediately"; but when they fall, as they have for much of the past 25 years, the companies tend to pocket much of the difference as profit, passing only some on to consumers.

So, in addition to all the environmental damage associated with factory-scale hog farming, it's an economic disaster, too—unless you happen to be a shareholder in one of the Big Four pork packers.

Did California Voters Defeat the Food Movement Along With Prop. 37?

| Wed Nov. 7, 2012 11:00 AM EST

"Come at the king, you best not miss," the character Omar famously observed on The Wire. Does the law of the streets apply to the politics of food? Writing in the The New York Times Magazine last month, Michael Pollan laid down the gauntlet on Prop. 37, the California ballot initiative that would have required labeling of genetically modified foods. "One of the more interesting things we will learn on Nov. 6 is whether or not there is a 'food movement' in America worthy of the name—that is, an organized force in our politics capable of demanding change in the food system," he wrote.

Pollan ended his essay by suggesting that passage of Prop. 37 would be a sure way to convince President Obama of the importance of food-system reform.

Over the last four years I’ve had occasion to speak to several people who have personally lobbied the president on various food issues, including G.M. labeling, and from what I can gather, Obama’s attitude toward the food movement has always been: What movement? I don’t see it. Show me. On Nov. 6, the voters of California will have the opportunity to do just that.

And make no mistake, Prop. 37 was the food-system equivalent to a lunge at the king. No fewer than two massive sectors of the established food economy saw it as a threat: the GMO seed/agrichemical industry, led by giant companies Monsanto, DuPont, Dow, and Bayer; and the food-processing/junk-food industries who transform GMO crops into profitable products, led by Kraft, Nestle, Coca-Cola, and their ilk. Collectively, these companies represent billions in annual profits; and they perceived a material threat to their bottom lines in the labeling requirement, as evidenced by the gusher of cash they poured into defeating it (more on that below).

Well, now the deed is done. We'll never know if Prop. 37 would have emboldened Obama, now re-elected, to change course on food policy. What does its failure mean for what Pollan calls the food movement?

What Would "President Romney" Mean for Food and Agriculture?

| Sat Nov. 3, 2012 6:03 AM EDT

The election-handicapping guru Nate Silver reckons President Obama's prospects for victory at about 80 percent. Four-to-one odds might sound like a sure thing—but would you think so in a game of Russian roulette? In other words, there is a non-trivial possibility that people will soon be addressing Mitt Romney as "Mr. President." What would a Romney/Ryan administration likely mean for food and agriculture policy?

1) Regulations, beware. When Obama was running for office in 2008, he promised to crack down on the worst environmental and social abuses of industrial-scale farming. His record, though, has been mixed at best. Under a President Romney, even the pretense of regulating Big Ag is out the window.

The Romney campaign called its October 2012 white paper on ag policy "Agricultural Prosperity: Mitt Romney’s Vision For A Vibrant Rural America." A more accurate title might have been, "Feeling Over-Regulated? I'll Fix That." In it, he promises to "freeze and review new, pending, and proposed agriculture regulations, and eliminate those that are duplicative, ineffective, or not economically justifiable"; to require Congress to "approve all new major regulations proposed by federal agencies, returning responsibility for important decisions to our elected representatives"; and "impose a regulatory cap that forces agencies to spend as much time repealing and streamlining old regulations as they spend advancing new ones."

Among the regulatory efforts that would likely be blocked under such a regime is the FDA's tentative, voluntary proposed plan to reduce routine antibiotic use on livestock farms. Tentative and voluntary beats little or nothing, and that's what Romney is promising on the regulatory front.

A Geneticist's Take on California's Prop 37

| Fri Nov. 2, 2012 6:08 AM EDT

Editor's note: This is a guest post by geneticist and author Belinda Martineau, who was a principal scientist at Calgene Inc., where she helped commercialize the world's first genetically engineered whole food, the Flavr Savr tomato.

Genetically engineered (GE) sweet corn is being sold at a Walmart near you. And because that company has said it sees "no scientifically validated safety reasons to implement restrictions on this product," and because US regulations don't require it, it isn't labeled "GE."

Developed by Monsanto, this GE sweet corn is beautiful by fresh corn standards—not a worm hole in sight—since it contains not one, not two, but three insecticides engineered into each cell of every kernel. Having the corn make its own insecticides means that farmers don't have to spray those chemicals out in the environment. The end result is that no earworms or European corn borers will have anything to do with this good-looking GE sweet corn. But, you may be wondering: should I?

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Why I Disagree With Kevin Drum on California's GMO Labeling Proposition

| Thu Nov. 1, 2012 1:34 PM EDT
A rally in favor of Proposition 37 at Los Angeles City Hall in October.

In his recent "Guide to California's Ballot Mayhem," my colleague the prominent political blogger Kevin Drum came out against Prop. 37, which would require that all foods containing genetically modified (GM) ingredients be labeled.

In general, Drum says, he opposes the propositions that appear on his home state's ballots unless he sees a clear case for them. For him, Prop. 37 fails that test. "'l confess to mixed feelings about this," he writes. "But I'm afraid mixed feelings mean a No vote." Kevin is agnostic on the merits of compulsory labeling of GM foods. "I respect the desire to know where your food comes from, regardless of whether you want to know different things than I do, but on a substantive level I'm not convinced that GM foods pose enough of a genuine hazard to rate detailed labeling laws that are etched in stone forever."

It's technical issues push that Kevin to the "no" side. He writes: "as with so many initiatives, [it's] sloppily written; it can't be changed after it's passed; and it imposes expensive state labeling burdens on interstate commerce, something that I'm increasingly leery of."

I've written a lot about the hazards, potential and realized, that GM crops bring to bear: the complete domination of them by a handful of large companies, the accelerating pesticide treadmill on which they've placed farmers, and the still-little-tested potential health risks. For all of these reasons, I avoid GMOs, and would vote to require their labeling if I had a chance.

For now, I'd like to set those aside and respond to Kevin's technical concerns. I agree that California's ballot initiatives tend to be blunt instruments called upon to do delicate work. It seems to me that the state's meta-problem—the reason its public schools are a mess, the reason it keeps hacking away at its glorious public-university system—can be tied to the infamous, 1978 Prop. 13, still limiting property taxes and squeezing civic institutions a quarter century after its passage.

Is the Junk Food Industry Buying the WHO?

| Thu Nov. 1, 2012 6:03 AM EDT

The US Food and Drug Administration is notorious for bowing to food-industry interests at the expense of public health. Consider the case of trans fats—whose damaging effects the FDA ignored for decades under industry pressure before finally taking action in 2006, a story I told here. Then there's the barrage of added sweeteners that have entered the US diet over the last two decades, while the FDA whistled. This week, Cristin Kearns Couzens and Gary Taubes, who has been writing hard-hitting pieces on the dangers of excess sweetener consumption for a while, have a blockbuster Mother Jones story documenting how the FDA rolled over for the food industry on added sweeteners.

As evidence of harm piles up, the industry is only accelerating its effort to keep government action at bay. Back in April, a Reuters investigative report found that the food industry had "more than doubled" its annual lobbying spending under Obama and had successfully pursued a strategy of "pledging voluntary action while defeating government proposals aimed at changing the nation's diet."

But the food industry isn't satisfied with just keeping the US safe for its junk products. As a new Reuters report shows, the industry is also actively seeking influence at the global level by cozying up to the World Health Organization, the public-health arm of the United Nations. The WHO is most known for its efforts to fight communicable diseases like malaria and AIDS. But the UN has recently charged it with focusing on chronic, diet-related ailments like heart disease and type 2 diabetes.

Can Farms Bounce Back from Superstorms Like Sandy?

| Wed Oct. 31, 2012 6:03 AM EDT

Farmers have always lived with what the novelist Henry James called the "imagination of disaster"—the keen sense that there's always something, anything, that can go wrong. In that long interval between sowing tiny seeds and reaping valuable crops, droughts, floods, plagues of pests, tumbling trees, ravaging beasts—all threaten your livelihood and haunt your dreams. But the last seven years have been ridiculous.

In 2005, the sixth-most powerful hurricane ever recorded blitzed into the Mississippi River Delta region, flattening $900 million worth of crops. Just two years after Katrina, a "500-year flood" visited the Midwestern corn belt—which, as the US Geological Survey pointed out at the time, marked the second "500-year flood" in 15 years. In 2011, Texas suffered the most severe 12-month drought in its recorded history, resulting in a stunning $5.2 billion in crop and livestock losses, eclipsing the state's previous record high in crop losses set just five years earlier. Then came last August's Hurricane Irene, which deluged farmlands and destroyed crops from Puerto Rico to Canada, taking a particular toll on farmers in Vermont and New York State. This summer, farmers in the Midwest suffered the worst drought in a generation—which cut into crop yields and sparked yet another global hunger crisis. And now comes unprecedented "superstorm" Sandy.

What We Can Learn from the Greek-Island Diet—and What We Already Know

| Fri Oct. 26, 2012 7:03 AM EDT

In Sunday's New York Times Magazine, there's an extremely evocative article on life on the Greek island of Ikaria, pop. 10,000, whose "jagged ridge of scrub-covered mountains rises steeply out of the Aegean Sea." The focus is on the unusual longevity and good health of the people who live there. The author, National Geographic writer Dan Buettner, specializes in reporting on what he calls "blue zones"—pockets where populations manage to avoid succumbing to debilitating modern health scourges like Type 2 diabetes, heart disease, and cancer.

Buettner assembled a team of academic researchers to look hard at the island's demographics. They concluded that Ikarians are "reaching the age of 90 at two and a half times the rate Americans do." The situation for men is even more extreme: Ikarian men in particular are nearly four times as likely as their American counterparts to reach 90, often in better health. Buettner continues:

But more than that, Ikarians were also living about 8 to 10 years longer before succumbing to cancers and cardiovascular disease, and they suffered less depression and about a quarter the rate of dementia. Almost half of Americans 85 and older show signs of Alzheimer’s. (The Alzheimer's Association estimates that dementia cost Americans some $200 billion in 2012.) On Ikaria, however, people have been managing to stay sharp to the end.

Genetics can't explain the phenomenon, Buettner argues. On the next island over, he writes, people "with the same genetic background eat yogurt, drink wine, breathe the same air, fish from the same sea as their neighbors on Ikaria," but "live no longer than average Greeks." So, the obvious question here is, what are the Ikarians doing differently? The typical American impulse would be to identify some wonder substance driving the Ikarians' good health, concentrate it (if not synthesize it in a lab first), stick it in a pill, market it heavily—and then find out the wonder substance is all but worthless. We've learned that isolating nutrients, stripping away the context of their presence in whole foods, is not a recipe for health, as Michael Pollan showed in his In Defense of Food. Consuming beta carotene in the context of a carrot is good for you; gulping down a beta carotene pill, it turns out, not so much.