That is the topic of my latest Bloomberg column, here is on excerpt:
The most striking feature of her team’s plan, called “Leveling the Playing Field for America’s Family Farmers,” is what it doesn’t call for: namely, an abolition of farm subsidies, a reform favored by virtually all economists. Those payments often run more than $20 billion a year, and are typically considered an inefficient form of crony capitalism.
Warren’s document asserts that “food prices aren’t going down.” That’s true but misleading. When the Federal Reserve is targeting near 2 percent inflation, most prices in the economy will rise steadily over time. The link behind that claim, to a U.S. Department of Agriculture report, offers some recent data, but it is hardly damning: In 2018, it notes, retail food prices rose 0.4 percent. “This was the first increase in 3 years, but the rate was still below the 20-year historical annual average of 2.0 percent.” Or how terrible are these numbers, from the same report: “In 2019, price growth may continue to remain low at the grocery store. Food-at-home prices are expected to rise between 0.5 and 1.5 percent, as potentially the fourth year in a row with deflating or lower-than-average inflating retail food prices.”
A look at the longer-term historical data also shows slow, steady inflation in the food and beverage sector, rather than a recent crisis of price spikes. Food price inflation does become higher after 1973, but that is probably due to higher energy prices and the more general productivity slowdown that has plagued the U.S. economy.
In this context, Warren’s lengthy complaints about monopoly and market power in the food sector just don’t seem that persuasive. Furthermore, America’s food sector has been remarkably innovative in terms of product choice and rising diversity of options.
Warren also calls for greater agricultural protectionism and the banning of foreign investment in American farmland. And she is supposed to be the leading policy thinker in the race? People, this is not good, and furthermore it is the same tiresome “tested by social media let’s bash the corporate villains” set of cliches. My close:
If American voters want to be inspired, then opposing seed-company mergers won’t be nearly enough.