Do Subsidies Improve Nutrition? – Analysis

When food price subsidies are given to the poor, the assumption is that they improve both access and nutrition, but the impact these subsidies have on the quality of nutrition is hard to gauge, say experts.

Food price subsidies – whether donor or government funded – are provided through conditional cash transfers where people receive cash to purchase food, or vouchers with cash value that can be redeemed for food at selected stores. Both practices share a similar market-based approach that boosts a person’s ability to buy food.

“The volatile food prices are driving nutritious foods out of reach of the world’s poorest people and are threatening to exacerbate the global crisis of malnutrition,” said Liam Crosby, policy and research adviser on hunger at Save the Children’s office in the UK.

By the end of 2012, almost one-third of World Food Programme’s assistance will be in the form of cash and vouchers.

Nearly all urban and most rural dwellers buy food from markets, even if they grow their own food, according to the Food and Agriculture Organization (FAO).

“Poor people are already spending some 70 percent or more of their incomes on food, but their incomes are so low that even spending 70 percent does not buy enough food to meet their dietary needs,” said Sumiter Singh Broca, policy officer at FAO’s office in Bangkok.

The Asian Development Bank warned in February 2012 that even a 10 percent increase in food prices could push 30 million more Indians and four million more Bangladeshis into extreme poverty, while in Pakistan an additional 3.5 million people could drop below the US$1.25-a-day income mark.

“This means that a food subsidy will be particularly helpful to poor families as they will almost certainly buy more food,” said Broca.

But does more cash for food mean better nutrition?

Nutritious food

Not necessarily, said Crosby from Save the Children. “The causes of malnutrition are numerous and complex. People need more than simply to be able to afford enough food; they need to afford the right types of food. Governments must invest in the provision of direct nutritional interventions including education and support for correct breastfeeding practices.”

Far from being a “magic bullet” to solving hunger, consumer subsidies may actually hurt rural producers who lose income in a programme that directs business to a limited number of vendors, Crosby added.

According to an economics study published in 2011 on 1,300 households in China that received food subsidies for five months, while the surveyed ate more food, their nutrition intake changed little or worsened.

In Hunan Province, most who received the subsidies opted to buy more fish – typically expensive relative to other foods – and less rice, pulses and spinach, leading to a net decline of both calories and vitamins in their diets.

The researchers concluded “policymakers may have to be satisfied with knowing that giving wealth to the poor improves their welfare,” but not their nutrition because most households purchased “the less nutritious foods that wealthier households consume”.

Urban households in Asia spent up to half of their food budgets on cheap, low-nutrition foods, according to a 2010 FAO study. These households consumed less than half of the nutrient-dense vegetables and fruits that are recommended.

Lack of micronutrients like Vitamin A, iron, zinc and iodine is a leading cause of preventable mental disability, increases the risk of premature death and leads to chronic malnutrition, according to health experts.

In Asia more than one third of children under the age of five are “stunted” – too short for their age – while 27 percent weigh too little for their age, a sign of chronic malnutrition.

“Lack of resources, low knowledge and sub-optimal [health] behaviours all contribute to malnutrition at some level,” said Dorothy Foote, UN Children Fund’s nutrition security programme specialist for Asia. “Nearly half of pregnant women and pre-school children in Asia are anaemic, and progress in addressing this has been very slow, even though we know that anaemic adults are less productive and anaemic children are more lethargic, more prone to illness, and have more difficulties in learning.”

Anaemia is mostly due to lack of iron.

Some 13 million children in South and Southeast Asia are born every year with mental disabilities caused by lack of iodine – found in iodized table salt and naturally in shellfish and saltwater fish – while nearly half a million children under five years old die due to Vitamin A deficiency in the same period, according to the NGO Micronutrient Initiative, headquartered in Canada.

“When food becomes cheaper as a result of subsidies, people will increase their consumption of food,” said FAO’s Broca. “Does this mean that they buy more nutritious food? Maybe yes, maybe no; it is always very context specific,” he said, adding that good nutrition has many requirements, including good health care.

“A person, and this applies particularly to children, can be getting `enough’ food, but because he or she is sick frequently, may not be able to utilize the nutrients in the food. Safe drinking water, sanitation and sewage [systems], childhood vaccinations are provided by governments. If governments fail to do this, then increasing the intake of food because it has become cheaper will not necessarily result in better nutrition.”

A food revolution

The most recent FAO estimate of the number of malnourished people in the world is 870 million, or one in every eight people. The organization calls for “nutrition-sensitive” economic and agricultural growth that affords people the chance to diversify their diets, receive micronutrient supplements if needed and learn about healthy diets and best child care practices.

But diversifying diets – and what farmers plant – requires nothing short of a “revolution” Caterina Batello, a crop production and climate change specialist at FAO, told IRIN in 2010.

“A whole society must adapt, from decision-makers to producers, to processors, to customers.”

Following record-high food prices in 2008, Indonesia’s government – one of Asia’s major rice importers – launched a national campaign in 2009 to reduce rice consumption by encouraging citizens to go one day a week without rice; all 33 provinces were called on to boost non-rice crop production.

The widely consumed milled, or polished, rice has few nutrients. But as an Indonesian saying goes, “if you haven’t had rice, then you have not eaten.” Because of the public’s lacklustre response to cutting back on rice, in 2010 the government changed the message from “one day, no rice” weekly, to “one meal, no rice” daily.

But still, residents in a part of the world responsible for farming and consuming 90 percent of the world’s rice have resisted.