Cutting Costs and Improving Health: Federal Food Policy Reforms Could Save Billions

The Physicians Committee
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Cutting Costs and Improving Health: Federal Food Policy Reforms Could Save Billions

A Report from the Physicians Committee for Responsible Medicine
July 28, 2011

The U.S. Government is currently searching for solutions to serious ongoing financial problems. A large portion of the nation’s economic challenges is attributable to escalating health care costs, which are driven by worsening epidemics of obesity, diabetes, and other health problems.

However, a measure of the responsibility for these health problems rests with the federal government itself. Over the past several decades, specific federal agriculture and food programs, which are expensive in and of themselves, have had the unintended effect of eroding the nation’s health.

Federal nutrition guidance emphasizes healthful vegetables, fruits, and whole grains. However, federal direct and indirect subsidies have favored meat, dairy products, and sugar, despite the fact that abundant scientific evidence shows that increasing consumption of animal products is associated with obesity, diabetes, cardiovascular disease, hypertension, and certain forms of cancer, among other health problems.1-3

Government programs subsidize feed grains for livestock, buy up hundreds of millions of dollars worth of cheese and meat and dump them in school meal programs in order to stabilize agricultural prices, cover much of the cost of environmental clean-up related to livestock feeding operations, and put candy, soda, and fatty cheese on the same financial footing as healthy vegetables and fruits in the Supplemental Nutrition Assistance Program (SNAP). These and other programs encourage the intake of animal fat, cholesterol, and excessive calories and put healthier choices—the vegetables, fruits, whole grains, and legumes that provide fiber and important vitamins—at a comparative disadvantage.

The following plan reduces subsidies for unhealthful food products and prioritizes healthful foods in food assistance programs. It is designed to put the nation on a more stable economic footing, while also helping to solve vexing health problems that have plagued our nation for decades and that imperil our future.

The total savings are estimated at $383 billion over a 10-year period. The following is a breakdown of the estimated short-term savings in each program area to be described below:

Policy Change

Savings (over 10 years)

Elimination of direct payments

$50 billion
Crop insurance privatization                       $70 billion
Clean-up program privatization             $9 billion
SNAP reform                                                   $240 billion
Commodity reform                                            $14 billion
Total short-term savings:  $383 billion  

However, the long-term potential benefits are much greater. Savings related to the indirect costs of disease, such as the loss of tax revenue due to disability, absenteeism, and premature death, are likely to be larger than the direct costs considered here.

This proposal includes two steps: eliminate subsidies for unhealthful products and prioritize healthful foods in food assistance programs.