Do Agricultural Subsidies Foster Poor Health?

This past summer the movie Food, Inc. was released in the United States. The movie analyzes the impact of the industrialization of the food supply, with some very interesting conclusions.

One point made in the film is that government subsidies to the agricultural sector, specifically to corn and soybean producers, may be linked to the growing problem of obesity and diabetes in the United States (and elsewhere presumably).

Below is a link to an article that discusses the possible connection between agricultural subsidies and poor health. There are also counterarguments presented. This material is very much linked to what we have studied so far about supply and demand, the pros and cons of government intervention in markets, and elasticity of demand and supply.

So what do you think? Is there a strong connection between government intervention in agricultural markets and health problems?

I would recommend that you take a few notes as you read, perhaps in two columns (arguments that say intervention is connected with poor health, and arguments that say intervention is not connected with poor health). This will help you put the big picture together at the end. Remember, your comment should be 10 sentences or less. Reply by November 4 for a second chance, or by November 8 as a final deadline.

http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1247588/

China's government intervention in the energy market

Below is a link to a commentary by a Reuters journalist about China's intervention in the energy market.

http://blogs.reuters.com/columns/2009/10/20/beijings-great-power-comes-with-little-foresight/

As an alternative to the post on milk below, you can write a comment directly to the Reuters site, responding to the journalist's opinion piece. The same rules of engagement apply - 10 sentences or less and use what you know about economics to discuss.

Should governments intervene in the market for milk?

In recent months, milk farmers in Europe have been loudly complaining about the low price they receive for their milk. The problem is a combination of oversupply, fostered in part by years of government support for the milk industry, and the power of the small number of milk processors and grocery stores who buy the milk from farmers and put a great deal of downward pressure on farm-gate milk prices.

Just this week the EU agreed to a new set of payments to farmers to help them survive this period of low prices, but is this the right solution? Farmers would like to see a reduction in quotas, to reduce supply. Is this a better solution? Or should we let the invisible hand of the market reduce supply on its own?

How much and what kind of intervention is right in the EU (or any government's) milk industry? Should there be any intervention at all?

When, if ever, are price controls justified?

Below are links to several articles about the use of price controls in the Philippines.

The first article from Reuters is about specific price controls on certain drugs that began last summer.

http://www.reuters.com/article/latestCrisis/idUSMAN479215

This is a press release by the Philippine Information Agency about price controls that were imposed by the government after the devastating typhoon that hit the country earlier this month.

http://www.pia.gov.ph/?m=12&r=&y=&mo=&fi=p091008.htm&no=83

And here is a news article about those same emergency price controls.

http://www.philstar.com/Article.aspx?articleId=510779&publicationSubCategoryId=63

We have spent a lot of time criticizing the use of price controls, like the price ceilings used here. But are there times when they are justified?

Use what you know about economics to comment on these price ceilings in 10 sentences or less. Remember, discussing in depth is preferable to breadth!