Exploring the True Cost of Food:
Overview of Workshop
H EL EN H J EN SEN , IO WA STAT E U N IVER SIT Y
PR ESEN TAT IO N TO IO M , N R C C O M M ITT EE
J U LY 1 6 , 2 0 1 3
Workshop Planning Committee
Statement of Task
“…public information-gathering workshop to examine the challenges inherent in estimating the costs
of the U.S. food system not reflected in retail prices and to consider the kind of research strategy
that would be needed to approach such a full scale accounting. The workshop will identify the types
of information sources and methodologies required to recognize and estimate the costs and benefits
of externalities and unintended public health consequences associated with the U.S. food system.”
- How to account for externalities and unintended public health consequences in general
- Meat as a case study to explore how to approach the measurement…
- Workshop to frame the problem of:
- Categories of externalities and unintended public health consequences
- Appropriate metrics for quantification
- Limitations and knowledge gaps
- Modeling and other analytical approaches needed to establish value of these costs and benefits
“Environmental and unintended
public health consequences”
Externality:
◦ “An externality, which can be positive or negative, is an activity of one agent …that
affects the well-being of another agent and occurs outside the market mechanism”
NRC (2010) The Hidden Costs of Energy (cited by J Hammitt)
Broader concept adopted: “Environmental and unintended public health consequences”
Other issues:
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scientific evidence and causation
risk and uncertainty
“outside the market mechanism” (including social values)
complex systems and linkages
Other concepts related to information
Information asymmetry
◦ Occurs when some parties know more than others about the (economic) variables
that are relevant for the choices they face. If not corrected, this can lead to market
failures.
Moral hazard
◦ A special case …may occur if a party that is insulated from risk has more information
about its actions and intentions than the party paying for the negative consequences
of the risk.
◦ More broadly, moral hazard occurs when the party with more information about its
actions or intentions has a tendency or incentive to behave inappropriately from the
perspective of the party with less information.
Workshop Planning
Goals:
1. Discuss the environmental and public health effects and trade-offs of the
practices that occur at all life cycle stages for all foods in the US food system
2. Identify types of information sources and methodologies required to recognize
and estimate costs and benefits
3. Discuss potential issues and challenges to estimation and quantification
4. Consider the kind of research strategy and feasibility of conducting fullaccounting
Participants (academic, industry, public health, etc.)
Output:
Matrix list of environmental and public health effects and trade-offs
Workshop Summary of “opportunities and challenges”
Overview of 2012 Workshop
Keynote: The Economics of Food Prices and Considerations for Valuing Food
Methods and Strategies for Estimating (External) Environmental and Health Impacts of Food
• Life cycle analysis (LCA)
• Health Impact Analysis (HIA)
• Environmental and Public Health Consequences
• Multidimensional impact assessment and modeling
• Cost-benefit analysis
• Risk assessment
Broader Effects: Social and Ecological Dimensions of the Food Supply
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Ecological services
Health inequalities
Accessibility to food
Animal welfare
Overview of 2012 Workshop
(continued)
Four Working Groups
• Energy and GHG emissions
• Soil, water, and other environmental consequences
• Consequences of antimicrobial use in agriculture
• Other public health consequences
Costs and Benefits in Food System:
Source and Measurement (Metrics)
• Each working group discussed topic, methods and metrics
Use of a “Matrix” worksheet to identify elements in framework and linkages:
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Source of the effect
Type of effect (environmental, public health, other)
Methodologies to measure the effect; limitations; measurement challenges
Trade-offs associated with the practice that cause the effect (measurement,
limitations) (e.g., large scale vs. “small” production practices)
◦ Life Cycle Stage during which the effect occurs (resource origin, production,
processing/distribution, preparation/consumption)
Some issues raised in working
groups
• Energy and GHG emissions
• Approach through Life Cycle Analysis (LCA)
• Key issues: uncertainty of effects, heterogeneity in production methods (sites, soils, scale)
• How to define a benchmark: What is “conventional practice”?
• Soil, water, and other environmental consequences
• Key issues: Heterogeneity in production environment and sites
• Non-monetized effects like “quality of life”, “open space”
Some issues raised in working
groups
• Consequences of antimicrobial use in agriculture
• Severe data limitations due to complexity of evidence on emerging resistance
• Public health impact includes potential for untreatable disease (creation of reservoir of
antibiotic resistant genes)
• Tradeoffs important: e.g., productivity vs. environmental effects and waste; animal welfare;
(uncertain) public health
• Other public health consequences (e.g., cardiovascular disease)
• Both costs and benefits of food system to consider
• Challenge: evidence of causality
• To what extent are effects “internalized”
Challenges and Cautions
•Need to develop a “workable” framework…
•Everything is relative – cost relative to what? (K Smith, 2011 workshop)
•Heterogeneity of production environment and practices – risk of simplifying
• The “average” (producer, consumer, geography) can mask underlying variability (K Smith)
• Heterogeneity (large vs. small; geography) has implications for collecting and analyzing
data (Antle)
•Need to account for economic (market) and non-market factors that influence
choices (Hammit)
•Scientific uncertainty exists (e.g., health consequences and evidence of causality)
•May be difficult to determine the “system boundaries”
Moving forward – issues to consider
1. Defining and delineating an approach useful in framing the issue of the health,
environmental and social effects of the food system
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Market and non-market issues (including distribution)
Identifying boundaries and linkages
May be useful to conduct a systematic review of existing methods
Consider more selective examination (e.g., food sector, policy)
2. Tradeoffs
◦ Scale of production: Large scale production may reduce overall production costs but raise other costs
3. Uncertainty about the magnitude of some effects
◦ Heterogeneity about landscape, scale and scope
4. Complexity of food system – and tracking the linkages
◦ There may be significant problems of “missing something”