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Workshop on impact of food-price policies on nutrition: political framework for nutrition policies

The World Hunger Programme of the United Nations University organized a workshop on the Impact of Food-Price Policies on Nutrition as a preliminary discussion of a largely unexplored subject. Some twenty persons participated: economists from the United States, Latin America, the Caribbean, and Europe; nutritionists from Latin America, and one or two sociologists. As a distinguished nutritionist from Venezuela said: "Having recognized the inefficacy of special programmes to compensate for vitamin, calorie, or protein deficiencies, and that in no way can the problem of malnutrition be reduced to one of dietary education, nutritionists now look to economists in the hope of a more global solution."

1. Economic Considerations

The economists, of course, have no better solutions to the over-all problem of malnutrition in developing countries than anyone else, but they are able to point to some of the less intuitively obvious implications of programmes to maintain or improve nutritional standards. Professor Lance Taylor of the Massachusetts Institute of Technology presented a very useful paper which, with the help of a simple model, showed that government policies to improve food production (for example, by subsidizing the price of fertilizers) may have unforeseen and undesirable effects on the peasant producers' consumption Patterns. On the other hand (again, for example), subsidies for the consumption of food may lead to improvement in farmer incomes and consumption-though also to spiralling inflation if the subsidies are not skillfully managed.

At the heart of these discussions lie controversies about the price and income elasticities of food demand and production, and much economic analysis of the subject will depend on one's assumptions concerning these issues. Thus, if it is assumed that the price elasticity of demand for food is low, then one will claim that a decline in food prices will lead not to increased consumption of food, but to increased consumption of other articles with the money thus saved. It is extremely difficult to provide clear evidence for this in poor and highly unequal countries, because such responses may depend on the level and type of income (if any) that individuals or households receive.

Similar debates occur in the context of production, where the elasticities of response of peasant producers (who feed themselves and also sell and buy food and other products on the market) may be low. That is, a rise in food prices to the producer may give a peasant household the welcome opportunity to reduce drudgery while obtaining the same or even a higher income. The only evidence on these matters presented concerned the case of Chile, where it appears that in the early 1970s the elasticity of demand for food was remarkably high among the poor sectors of the urban population. When real wages rose and food prices were held down, demand for basic foods rose dramatically within these strata.

2. Political Process

The discussion of policies was conducted on two levels. The political framework was discussed, and it was repeatedly pointed out that policies are made within a political process. This means that it is extremely difficult to hope for nutrition policies of the required magnitude when so many countries have a political system that excludes those in need from the decision-making process, and that heavily sanctions any attempts on their part to influence it.

As far as specific policies and interventions are concerned, there remains much confusion. For some, the food problem is a problem of income, and the only way to improve the nutrition status of the poorest strata in poor countries is by achieving an improvement in their incomes-whether by redistribution, by economic growth, or by some combination of the two. For others, it is a problem of the nature of the capitalist system in developing countries, which creates increasing inequalities of income and devotes vast resources to persuading those who do join the mass-consumer society either to eat the wrong type of food (in Venezuela obesity is already becoming a problem in the upper and middle classes) or to purchase consumer durables instead. In this connexion, it is worth pointing out that in an inflationary situation, poor people with unstable opportunities for earning may quite rationally choose to store their savings in a TV set or a refrigerator-less for the immediate satisfaction these may offer than for the fact that they are easily resaleable and preserve some of their value against inflation.

3. Agricultural Programmes

Some participants spoke of specific programmes, but these were presented in the context of economic policy in general. At least for the participants in this meeting, special programmes unsupported by macro-economic policies are a waste of resources-as shown by Giorgio Solimano's study of the various milk supplementation programmes in Chile over the years.

Where everyone did seem to agree is on the point that the "food problem" in the world and in many individual countries is not a problem of production. Indeed, the pattern of expansion of agricultural production in some parts of Latin America {Brazil, Ecuador) is such that the increases do not contribute to an improvement in the diets of the poor, partly because the increases are in products for export or for consumption by the middle and upper classes. Another reason is that the expansion of capitalist farming and ranching often removes peasants from their land or reduces employment opportunities for the rural landless, who are usually already among the poorest groups in society.

A second interesting point that arose at the conference concerned the dangers of closely targeted administrative programmes. While these may be excellent in conception, they may face such enormous obstacles through bureaucratic confusion and corruption that it is preferable to use the "price mechanism"-even if this spreads benefits to others than only those in the most extreme need; the bureaucracy may in fact channel resources in the wrong direction to a far greater extent.

My impression, as a non-expert, is that the nutritionists are in despair and look to the economists for a "solution" -while in the meantime both groups discover that the problem is as much political as it is technical.

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