A social cost-benefit analysis of meat taxation and a fruit and vegetables subsidy for a healthy and sustainable food consumption in the Netherlands

Abstract

Background: Implementation of food taxes or subsidies may promote healthier and a more sustainable diet in a society. This study estimates the effects of a tax (15% or 30%) on meat and a subsidy (10%) on fruit and vegetables (F&V) consumption in the Netherlands using a social cost-benefit analysis with a 30-year time horizon. Methods: Calculations with the representative Dutch National Food Consumption Survey (2012-2014) served as the reference. Price elasticities were applied to calculate changes in consumption and consumer surplus. Future food consumption and health effects were estimated using the DYNAMO-HIA model and environmental impacts were estimated using Life Cycle Analysis. The time horizon of all calculations is 30 year. All effects were monetarized and discounted to 2018 euros. Results: Over 30-years, a 15% or 30% meat tax or 10% F&V subsidy could result in reduced healthcare costs, increased quality of life, and higher productivity levels. Benefits to the environment of a meat tax are an estimated €3400 million or €6300 million in the 15% or 30% scenario respectively, whereas the increased F&V consumption could result in €100 million costs for the environment. While consumers benefit from a subsidy, a consumer surplus of €10,000 million, the tax scenarios demonstrate large experienced costs of respectively €21,000 and €41,000 million. Overall, a 15% or 30% price increase in meat could lead to a net benefit for society between €3100-7400 million or €4100-12,300 million over 30 years respectively. A 10% F&V subsidy could lead to a net benefit to society of €1800-3300 million. Sensitivity analyses did not change the main findings. Conclusions: The studied meat taxes and F&V subsidy showed net total welfare benefits for the Dutch society over a 30-year time horizon.