Making headlines in the media is a new law passed by France recently which has been cherished by many people on the left and even the right for its fight against hunger and waste. The focus being the creation of a new law for retailers of food, that any expiring goods must be donated to a food bank or other group giving product to lower income citizens. On the first glance, it like many feel good policies does its job, make people feel good. Yet with the Now This videos, positive reactions against waste and all the joys, this law does suffer from several severe flaws where it could make people a whole lot hungrier.
Diving into the law, a little information on food and hunger as a whole.
In the United States, about a third of food is going into a claimed “waste” by analysis. Things which were capable of being eaten going ignored and thrown away. Debate on what counts as waste is still held where counter analysis shows the statistics on food waste being so high are more related to things being partially eaten or undesirables such as chicken paws, skins of animals and even things as small as seed shells being marked. Yet with that, this article isn’t an argument on that study.
In that study claiming a third of food goes to waste, about 70% of that waste is in the home and not in a supermarket or store. This spreads it so of all the food produced to be sold, about 6-8% of it can be found unused as a result of a supermarket.
This study holds very similar for France and the rest of western civilization where it normally only varies by a few percentage.
Regarding the malnourished, there is a call that people in Europe and the United States do have some minor issues with hunger or not being given healthy nutrition. While the United States and Europe thanks to capitalism are at mass historical lows where hunger and undernourishment makes only a couple percent of the population, the case for a resolution to this problem still does exist.
Moving passed that, the next stop for the argument is examining the core policy France has put through. The key is as simple as it sounds. Whatever goes unsold does go donated to a food bank or shelter where lower income citizens can obtain access towards food. In short, it’s giving to the poor and taking from the garbage “literally”. In basic principle, it sounds perfect and is the ultimate “feel good” law.
Problem? It will grossly distort supply and demand causing shortages in supply while demand holds the same.
How does this happen?
First off, the key is examining how food banks and pantries in France or the United States are not small things for the poorest of the poor to enter into. About 15% of families will at least once a year access a food pantry to obtain discounted or free food. In that, about 5% of American families will rely on a food pantry for at least two meals a month. This figure holds more or less the same for France & Europe.
The food given in pantries whether run by private groups or the government do come from purchase. Being from private individuals giving away cans of food they’ve had laying in their house donated, giving direct checks or going to directly buy food for them at a store, the food is indeed purchased and serves as proper representation of supply and demand.
With food now being donated, this food would in France represent 5-7% of what a grocery store has in inventory and food sold yearly for their country. This is more than enough to supply the 2-4% of food consumed yearly which does come from pantries or shelters which was food that was met with purchase.
What does this all mean?
The industry of food sold to pantries & shelters is DEAD. Dead are the sales to pantries or shelters, dead are the funds going to stores from donors and dead is that market. The problem…. The real demand of consumers is still around.
The end outcome of this policy will be a reduced cost of food likely ranging from 2-5%. This will have an immediate result on the need for supply in the market. The outcome could be increased purchases from homes which make up 70% of food waste, a lack of incentive to make more and an outcome where there’s less food on the shelves and less option for consumers.
With this, a feel good policy suffers the same issues held in things such as the minimum wage or progressive taxation. They feel good, but do nothing to solve the core issue and make many more problems for themselves down the road.
This post was written by Charles Peralo.
The views expressed here belong to the author and do not necessarily reflect our views and opinions.
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