Linkages Between Greater Fruit and Vegetable Consumption and Agriculture

Abstract

This study will estimate the benefits to fruit and vegetable industries and consumers should people in the U.S. meet the USDA minimum dietary guidelines. Specifically the objectives of the study are to 1) estimate the benefits to fruit and vegetable industries and consumers should people eat the general and subgroup 7-a-day and 9-a-day recommendation; 2) estimate the benefits should smaller increases of only 10 percent or 25 percent be achieved; and 3) determine how agricultural inputs, including land and labor, would be affected by the increase in demand for fruits and vegetables. To protect against the incidence of chronic diseases such as diabetes, cardiovascular disease and cancer the 2005 USDA dietary guidelines recommend the consumption of 3 to 4 fruit servings and 4 to 5 vegetable servings a day. They also provide recommendations on the composition of fruit and vegetable consumption as well as the level. For example, almost one serving of dark leafy vegetables is recommended per day. Depite the known health benefits, many people do not eat the amounts recommended in the USDA dietary guidelines and low income consumers (those whose median household income is less than $25,000 a year) eat fewer servings. Based on the NHANES4 (National health and nutrition examination survey) and NHANES5, average consumption of fruit by low-income consumers would need to increase by at least 83 percent at meet the 3 a day recommendation and 39 percent in order to meet the 4 a day recommendation. People in higher-income households only need to increase consumption by only 60 percent for fruit and 30 percent for vegetables. The proportional increases in consumption assume that people no longer eat potato chips or french fries in order to meet dietary guidelines on fat consumption. A shift in consumption patterns to the recommended levels would cause the demand for fruits and vegetables to rise significantly, leading to higher prices and increased production, shifting the use of agricultural resources (such as land, labor, and water) into the production of those commodities, and benefiting the entire agricultural sector. Despite the potential gains to agriculture, these values have been ignored in previous studies of improved nutrient intake. Such a benefit to producers might justify additional public sector investment in promoting healthier diets. The changes in prices, agricultural production, agricultural input usage, and trade will be simulated using an equilibrium displacement model. The dual approach used in this analysis lays out basic demand and supply equations from demand and cost functions to show how equilibrium conditions change in response to shocks, such as an increase in the demand for fruits and vegetables. The functions characterize the final market, allow for substitutability between marketing and non-marketing inputs in the marketing sector, includes the farm sector, and changes in input use resulting from changes in crop mix and substitutability in land, labor and other inputs. Equilibrium displacement models have been widely used to estimate the benefits of agricultural research agricultural policies and the benefits to the dairy industry of a social marketing program to middle school children. The model is parameterized with farm, market and consumption data. The increase in fruit and vegetable consumption is modeled as a shift in the demand curve with the shift equal to the percentage increase needed to meet the USDA dietary guidelines. Producer surplus is estimated from the changes in grower prices and agricultural production, less changes in the cost of inputs. Consumer surplus for people living in low-income households (less than $25,000 a year median income) and higher income households is estimated from the changes in retail prices and final market quantities consumed by each income group.