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CAP killer?

We’re used to the arguments that the CAP’s subsidies and tariffs are very bad for many desperately poor farmers in the developing world, with some going as far as to say that the EU has blood on its hands but now comes a piece of medical research which suggests that EU farm subsidies are responsible for more than ten thousand diet-related deaths among European citizens.

By stimulating the production (and consumption) of foods that are high in fat and cholesterol, researchers based at Liverpool University in the UK have concluded that “The cardiovascular disease burden attributable to CAP appears substantial”. The research focusses on subsidies for full fat milk and butter and use the hypothesis that without CAP subsidies for dairy products, per capita saturated fat consumption would be 1 per cent lower and that consumption of poly- and monounsaturated fats would be 0.5 per cent higher. The results show that there are approximately 9800 additional deaths by coronary heart disease and 3000 additional deaths by stroke each year because of the CAP in the EU-15. The researchers stress that this was a very conservative estimate. The countries worst affected are France, Germany, Italy, Spain and the UK.

The research points to the case study of Poland in the years 1990 to 2002 where farm subsidies that stimulated the production of fatty and high cholesterol foods were reduced:

“Recent evidence of the potentially powerful impact of reducing dietary saturated fats is graphically illustrated by the recent large falls in CHD mortality in Poland, between 1990 and 2002 (by 38% in men and 42% in women). This reduction across socioeconomic groups was attributed to the abolition of national food subsidies for saturated fats and the emergence of new, competitive markets, greatly increasing consumption of polyunsaturated vegetable oils. Ironically, this beneficial decline could now be threatened as Poland implements CAP after joining the EU in 2004.”

There can be no doubt that the CAP directs its support to exactly the wrong kinds of food for a healthy diet – milk, butter, cheese and red meat. Support for arable crops also benefits the livestock sector, by making feed cheaper and let’s not mention the EU’s substantial subsidies for ‘booze and fags’. The Single Farm Payment specifically excludes land used to cultivate fruit and vegetables. Until recently the EU was spending hundreds of millions on the disposal of surplus fruit and vegetables in landfill as a way of keeping prices high.

Estimating the cardiovascular mortality burden attributable to the European Common Agricultural Policy on dietary saturated fats. Ffion Lloyd-Williams, Martin O’Flaherty, Modi Mwatsama, Christopher Birt, Robin Ireland, Simon Capewell. Bulletin of the World Health Organization. Volume 86, Number 7, July 2008, 497-576

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5 Replies to “CAP killer?”

  1. Jack, I’ve always been suspicious of medical types who turn to economics and end up putting the cart before the horse, and if you are interpreting them correctly they are making a serious error.

    Focusing on CAP subsidies to production misses the point that food consumption is a function of price, and because the CAP keeps the prices of harmful foods (particularly sugar and fatty foods like beef) much higher than they would otherwise be, the one thing which cannot be laid at its door is additional deaths from coronary disease and strokes! True, it also maintains protection against imports of fruits and vegetables which discourages consumption of these desirable products from a health point of view (though going on the views of our medical colleagues, the higher the protection the better, because this would then stimulate domestic EU production – leave aside that it makes fruit and veg even more unaffordable to low-income families). But relatively, protection is much higher for sugar and beef.

    However, what the good doctors appear to be attacking is not the CAP itself but the consumer subsidies which help to get rid of the surpluses created by the over-production incentives. This actually does make sense from a health point of view, but it means those of us in favour of reducing CAP protection need to think about the ill-effects on health which would accompany this.

  2. This study was only looking at dairy fats and making the comparison with vegetable fats, which are said to be lower in cholesterol and saturated fats. They single out the free school milk programmes for criticism. When I was working at the Ministry of Agriculture in the UK almost ten years ago now there was an almighty interdepartmental row about free school milk. Department of Health was dead against, on the advice of the Chief Medical Officer. MAFF was in favour, as was the tabloid press, the farmers and ultimately, 10 Downing Street.

    Interestingly in the US, there has been some research done comparing the health impacts of sugar versus high fructose corn syrup. HFCS is used as an alternative to sugar which is kept out of the US market by a high tariff. HCFS is apparently even more bad for you than sugar in terms of obesity.

    I think there can be no denying that in the long-term the various premia, price guarantees and the like have shifted the mix of EU food production towards less healthy foods like red meat and dairy. There is only so much land behind the tariff wall, and if subsidies stimulate artificially high production of certain (unhealthy) foods, there is less land available for other foods.

    There is also some evidence that pasture-raised meat is better for health than intensively raised meat, fed on corn, soya etc. Same for milk. This could have implications for global trade as it is my understanding that meat and dairy from the global south are more extensively farmed.

  3. It is unclear which CAP subsidies the report covers. In constructing the hypothesis on the impact of CAP subsidies on mortality, it refers only to the removal of subsidies for dairy products. However, in the conclusions the report states that it is the first study to quantify the impact of the CAP subsidies for dairy and meat commodities on cardiovascular mortality.

    This is not the only confusing aspect of the report. The hypothesis – that in the absence of CAP subsidies for dairy products, per capita saturated fat consumption would be one per cent lower (combined with a 0.5 % compensatory increase in vegetable oils) – is based on the reductions made in consumption of saturated fats in Finland (by 5 %) and Poland (by 7 %) prior to their accession to the EU. In Poland the cut in national subsidies for dairy as well as other animal fats contributed to the reductions but in Finland the reductions were achieved in spite of subsidies through a successful information campaign, focusing on lifestyle changes, combined with improved health care services. Consequently it is difficult to comprehend how these reductions, which are based on a range of measures in quite specific cultural circumstances, can be used as the basis for the impact that the removal of CAP subsidies would have in EU-15.

    Still, the report is of interest in assessing the impact on mortality of a one per cent reduction in the consumption of saturated fats in EU-15, and this may be of value for future research efforts. With respect to the link with the CAP, further research could explore the causality linking CAP subsidies with those factors influencing consumption and resulting health impacts. Based on this report alone, the link is highly dubious. So to continue the use of metaphor, this report illustrates rather less a case of putting the cart before the horse, but rather more highlights the need to replace the knackered horse.

  4. This debate has been taking place in France for a while. Some economists (P. Dubois from INRA Toulouse) have targeted negative externalities of butter and sugar and have even suggested to tax them (see a paper by Dubois on the excellent website http://www.voxeu.org in 2006). V. Requillart (also from INRA Toulouse) has published a few chronicles saying that the recent CAP reforms that led to a lower price for sugar and dairy (i.e. butter) were going the wrong way for that reason (he could have added the fact that the Commission’s only solution for the Fruits and Veg common market organization, which is to strengthen the market power of producers’s organizations, and therefore increase the price, is unlikely to help).

    However, the work of F. Etilé (from INRA Ivry) who has done some very serious statistical studies on the determinants of food consumption suggests that this argument of CAP inducing bad food habits is not very convincing. In one of his paper (in French) published in Le Monde 08/10/2007 he stresses the social/sociological determinants of the bad food consumption and the very small price elasticity of sugar and butter demand. Etilé is a first class econometrician, and I am enclined to believe him.

    The school milk debate reminds me a bit of the “milk is bad” campaign that appeared in several women’s magazine 2 or 3 years ago (claiming that milk and cheese were dangerous because they were too fat and, in addition, that milk consumption generated osteoporosis). In such cases you generally find out a few years later that some lobby (margarine?) was funding it. Remember that Heather Mills campaigned for dairy to be banned from the nation’s diet… For me that is enough for sticking to cheese as a major source of proteins (provided that you have it with enough red wine, nothing to be feared).

  5. I remain sceptical on CAP expenditures published by the study : “EU support for the dairy industry exceeds €16 billion, including €500 million per year on domestic consumption aid for butter alone.” Which year, five years ago ?

    I found some figures from the European commission when I participated in the milk advisory group. In 2007 : €84 million for disposal butter, and €65 million for school milk.

    The EU Dairy budget was €773 million in 2007, given that the dairy premium is included in the single payment.

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