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Influence of agricultural trade and food policies on diets

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Veröffentlicht am

Bhavani Shankar, SOAS
Expert consultation on trade and nutrition
15-16 November 2016, FAO Headquarters, Rome
http://www.fao.org/economic/est/est-events-new/tradenutrition/en/

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Influence of agricultural trade and food policies on diets

  1. 1. Influence of agricultural, trade and food policies on diets Bhavani Shankar
  2. 2. This presentation • Overview of dietary implications of agri-food policies not explicitly targeted at nutrition. • Agricultural policy, trade policy and consumer policy. • Focus mostly on LMICs. • Particularly important or interesting aspects – not comprehensive.
  3. 3. Conceptual framework
  4. 4. Price policies systematic review
  5. 5. Agri-food policy and diets: Nature of available evidence • Preponderance of analysis of trends, anecdotal evidence. • Surprising relative lack of research involving economists. • Some conventional wisdom does not stand up to closer scrutiny.
  6. 6. Ag. Policy: Producer support and diets • Public health narrative: Producer support in high income countries led to worsening diets and health outcomes. • Closer examination by economists finds little support for this: oSupport usually acted as a tax on consumers. oIn any case, price transmission and impact on final consumers low. oThus policy reform may have actually worsened diets slightly. • Support levels in LMICs have historically been much lower and there is little evidence on dietary impacts.
  7. 7. Ag. Policy: Ag. investments & diets Do green revolution investments and other rural public expenditures improve diets? • Headey and Hoddinott (2016): o Rice yield growth in Bangladesh associated with earlier introduction of complementary child feeding and child weight gain. o But rice yield growth has done little for dietary diversity. • Tak and Shankar (ongoing): oMarket infrastructure and production diversity (but not road infrastructure) improve dietary diversity in India. o Work ongoing on associations between rural public expenditures (agri. R&D, infrastructure expenditures, irrigation expenditures, etc. and dietary diversity).
  8. 8. Trade Policy: Trade liberalization & diets What has been the impact of GATT/WTO/RTAs induced liberalization on diets? • Modelling efforts have seldom focused explicitly on consumption and diets. • Apart from raising incomes, liberalization tends to raise commodity prices. • Modest commodity price increases + low price elasticities + low transmission suggest minor effects on diets. However…
  9. 9. Trade policy: Food availability and multinationals Thesis: liberalization has facilitated FDI particularly in ultra-processed food (UPF) UPF and multinationals: • Economies of scale • Branding and marketing • High margins Baker et al (2015): Apart from lowering tariff and non-tariff barriers, trade agreements reduce the “policy space” – freedom, scope and instruments to introduce health-oriented domestic food policy.
  10. 10. Trade policy: Food availability and multinationals • Stuckler et al. (2012): oMain determinants of UPF sales, such as income and urbanisation, are less important in countries with high penetration of multinationals. oHaving a trade agreement with the US is associated with a 63% higher soft drink consumption per capita. • Observations on literature: oIndividual commodity rather than whole diet perspective, mostly. oMuch less attention to trade and healthy food intake, eg. fruit and veg. oInvolvement of economists still low!
  11. 11. Trade liberalization & habit formation: Let them not eat cake?! Atkin (2013): • Too often trade theory assumes identical preferences. • But tastes in autarky correlated to local endowments. • Habit formation: tastes change slowly.
  12. 12. Trade liberalization & habit formation: Let them not eat cake?! (contd.) • Liberalization raises relative prices of these preferred local foods. • Since preferences sticky, preferred food more expensive and consumption gains from trade reduced in short run. • Long run: food tastes adapt and consumption gains from liberalization finally achieved. • Food price crisis: oStandard model: Transfer income from exporters, allow consumers to substitute into relatively cheap foods. oHabit formation: A bit more sympathy for export bans as a way of reducing hunger among the poor!
  13. 13. Consumer policy: food subsidies Jensen and Miller: • Do staple subsidies necessarily improve nutrition? • Wealth and substitution effects of subsidies. • Where wealth effect is large and ‘non-nutritional attributes’ are preferred, subsidies need not improve nutrition. • RCT with food vouchers for staples (rice and wheat flour) in two provinces of China • Results: no evidence of improved nutrition as a result of subsidy. • In one province, households reduced all items in main meal (rice, tofu, spinach, oil) to increase fish consumption.
  14. 14. Consumer policy: India’s Public Distribution System • India’s PDS is world’s largest food policy – subsidised rice and wheat to 0.5 billion people per year. • Massive inefficiencies  increased targeting from 1997, but targeting poor in practice. • 2000s - some states have embarked on a ‘new PDS’ – more inclusive and more generous subsidies. • Kishore & Chakrabarti (2015): rice price subsidy increased rice consumption, but also pulses, vegetables, oil (but not meat/eggs/dairy). • Rahman (2015): Comparing targeted versus new universal programme, universal PDS improves nutrient intakes across the board compared to targeted. • Positive implications for quasi-universal PDS plans under India’s new National Food Security act.

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