Costs, Effectiveness and Impact on Obesity
Julian M. Alston
This study examines the economic efficiency and health effects of the many US food and nutrition programs. The highlights include:
1) A total of 15 different US food and nutrition programs (FANPs) serve about one out of every four Americans at a current annual cost of close to $100 billion: The three major FANPs are the Supplemental Nutrition Assistance Program (SNAP); the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC); and the National School Lunch Program (NSLP), which together make up 91 percent of total spending on FANPs.
2) These programs are successful in ensuring adequate nutrition for many of the children and adults they target, but they may not all be economically efficient: SNAP carries the lowest administrative overhead costs at about 6 percent of the total program. Other programs like the WIC and NSLP are much more costly to manage, with administrative overheads reaching as much as 28 percent.
3) FANPs face a modern paradox: Poor people are struggling with both low food security and high obesity: Many people are urging state and federal governments to respond to the public health problem of obesity, but the benefits from intervention must exceed the cost to merit such a response. Many proposed policy reforms—such as limiting food stamps to healthy foods, taxing foods according to fat or sugar content and eliminating farm subsidies—would be ineffective or inefficient and would disproportionally harm the poor. Policymakers can find better programs for reducing the social costs of obesity.
4) Farm programs are not nutrition programs: Current farm programs are targeted at increasing farm incomes, not food consumption, and many raise prices instead of lowering them. On balance, they have almost no effects on the nutritional status of the poor or obesity.
5) Research and development can increase the economic efficiency of FANPs: Public investments in agricultural R&D do increase the availability and lower the price of food in the long run and are a major vehicle for improving food consumption among the poor.