How States Can Solve the Failed Farm Bill

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Issue Areas

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Americans subsidize ultra-processed foods pumped full of harmful, non-nutritive additives that do nothing to support our bodies and inflate healthcare costs.

The most recent Farm Bill has a projected cost of $1.5 trillion over 10 years. Of this, 82 percent (or $1.223 trillion) goes into “food security.” The crop insurance and assistance programs total $166.7 billion and focus on commodities (corn, soybeans, wheat, rice, dairy, and sugar) rather than nutrient-dense crops.

Given the subsidies and shelf life, the cost per calorie for ultra-processed foods (UPFs) is significantly lower than other food categories. Farm Bill subsidies prioritizing commodities over nutrient-dense crops widen this gap. The approximate cost per 100kcal for unprocessed food is $1.45. The approximate cost for UPFs is $0.55 per 100kcal. That cost discrepancy means that low-income Americans have artificially elevated purchasing power to buy junk foods that make them sick, rather than natural, healthy options.

This impact is especially apparent for Americans receiving another Farm Bill subsidy—the Supplemental Nutritional Assistance Program (SNAP, commonly known as food stamps), who are 28% more likely to be obese than matched income-eligible non-recipients of SNAP funds.

The Farm Bill isn’t a food security policy; it’s a healthcare inflation tax. We should call it what it is.

The poor state of America’s food supply and public health is common knowledge—it is even joked about worldwide. But it does not have to be this way. Prudent state policy can incentivize change in the food supply.

America is perfectly aware of the joke–and has been for some time. Take, for example, the 1989 movie “National Lampoon’s Christmas Vacation” and its main character, Clark Griswold. In an early scene, his co-worker says to him, “I hear you are up for food additive designer of the year.” Clark chuckles, responding, “Ooh, the Crunch Enhancer? Yeah, it’s a non-nutritive (emphasis added) cereal varnish. It’s semi-permeable, it’s not osmotic, what it does is it coats and seals the flake and prevents the milk from penetrating it.”

Though “non-nutritive” is the punchline of a movie joke, the effects of such food ingredients are no laughing matter.

Such enhancers lack nutritional value (even Clark says so!), encourage overconsumption, and introduce potential health risks. Other countries around the world ban non-nutritional additives meant to addict consumers. Despite the harms, the food flavor and enhancer market is valued at $8.73 billion and is projected to grow at 6.2 percent annually through 2032. And food flavor enhancers represent just one category of harmful ingredients found in ultra-processed foods.

Ultra-processed foods are linked to obesity, cardiovascular diseases, type 2 diabetes, and certain cancers–all of which require expensive medical treatments. For example, the CDC estimates that the annual medical cost of obesity in America is $173 billion per year. Treating type 2 diabetes costs the U.S. approximately $327 billion in medical and related indirect costs annually, with diet as a significant causal factor. Diets high in UPFs are associated with increased rates of depression and anxiety, leading to additional costs for mental health care.

Americans bear the financial and human cost of these foods—not only in terms of their health effects but also by subsidizing UPFs.

Since the Federal government will not solve this, how can states lead?

1. States should eliminate any taxes they have on whole foods, if any. Though states do not tax food purchased through SNAP, this would increase consumer purchasing power of whole foods for everyone.

2. Additionally, states could tier their sales taxes based on a food classification system such as NOVA. These consist of 1) unprocessed or minimally processed food, 2) processed culinary ingredients, 3) processed foods, and 4) ultra-processed foods.

Eliminating or tiering burdensome taxes on whole foods raises the purchasing power of everyday Americans for whole foods. With improved access to healthier foods, chronic conditions caused by dietary lapses will decrease—reducing both demand and costs in the healthcare system. States can spur a health revolution by targeting the root problem: nutrition.  National Lampoon satirized this issue more than 35 years ago. At one point in the movie, as Clark is lamenting not receiving his Christmas bonus, viewers can spot air-grade marine epoxy and solvent sitting on his shelf next to the cereal. It is safe to say that Clark would not have received a bonus if not for the Farm Bill. States should adopt tax policies encouraging Americans to eat whole foods—not Clark’s non-nutritive cereal varnish. The crunch isn’t worth it.