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In order to understand the relevance of income distribution and the nature of expenditures, it is essential to analyze the structure of the basic food basket and its nutritional contribution.
Even though food is unequally distributed, there is enough available to feed most of the population moderately well. However, severe nutrition problems exist in the lowest income group in both the Dominican Republic and Chile, although in the latter the nutritional level of the lowest income bracket is a little bit better (Table 8). As the table shows, consumption of calories and proteins is similar in both countries if only the weighted averages are considered, but they differ in structure. In Chile, nutrient consumption is more even among the different income levels. In the Dominican
Republic, there are large disparities, especially between the low- and high-inconie Ievels. In this case, calorie intake for the lowest level is only 44.7 per cent of that con. sumed by the weil-to-do. In Chile, the proportion rises to 60.2 per cent.
The fact that in Chile there is more even food distribution among the middle-income groups has been used to calculate the weight of goods to arrive at the consumer price index. The right-hand column in table 9 shows the percentages of income spent by a family with income derived from four to six minimum wages. In considering absolute levels of goods consumption by income level, it is apparent in both countries that the poorest families never reach the consumption level of richer families, especially for items essential for balanced, adequate nutrition. In the Dominican Republic, the poorest families consumed larger amounts of products of low nutritional value (yucca, potato, and ffame). Similarly, in Chile, the poorest families consumed greater amounts of items like fat and onions and slightly larger amounts of beans and lentils than consumed by the richer families (Table 10; 7).
The difference between food consumption habits in the Dominican Republic and Chile is noteworthy, notwithstanding the fact that their average intake levels are quite similar. Generally, except for meat, tubers, roots, and fruit, the level of consumption of cereals and green vegetables is higher in Chile (Tables 11, 12). Greater consumption of tubers and fruit in the Dominican Republic compensates somewhat for the lack of cereals and green vegetables. Fruits include plantains, mangos, avocados, and bananas, but especially plantains, which provide more calories all year, in contrast to the seasonal variation in supplies of avocados and mangos.
The difference in meat and seafood consumption between the two countries is explained by a high use of codfish and herring in the Dominican Republic. To indicate the caloric and protein value of codfish and herring, suffice it to say that in 1970 they represented about 16.7 per cent of the total calorie contribution and 32.3 per cent of the protein intake in the Dominican Republic. At present, because a pound of codfish is more expensive than one of beef, cod consumption has decreased to insignificant levels. In measuring the value of protein and calories of food in general, there is no doubt that the difference in calorie and protein intake between the two countries is revealed by a comparison of their basic dietary items (Table 13).
As can be seen in table 13, vegetable and cereal consumption is important for the caloric intake, and for protein intake as well, at any income level in both countries. In Chile, particularly, potatoes provide a major proportion of calories. They represent the same proportion of the diet that fruit does in the Dominican Republic.
When comparing Chile and the Dominican Republic, it is interesting to note the effects that massive income redistribution had in Chile on food consumption patterns and on availability of goods and prices. In the Dominican Republic, assuming the adoption of a policy of improved nutritional status, it will be important to analyze the impact of income distribution and agricultural production. In this way, the presentation of data for each country will be complementary and will have more relevance.
The income redistribution undertaken in Chile during the first year of the Unidad Popular resulted in an immediate increase in overall spending, and a reduction in indebtedness margin (Table 14). The general tendency toward an increase in total spending of a smaller proportion of income allowed families to reduce the indebtedness margin they had experienced in the past. Otherwise, the pressure on the availability of goods and services would have largely surpassed the system's capacity for import and export, as had happened before. Naturally, at that time other factors such as external forces, the reduction in investments, and the appearance of a parallel economy with an abundance of cash in circulation began to act together.
The real spending on food rose and thereby produced an improvement in the nutritional status of families. In table 15, only the aggregated data are presented. For more detail, the work already cited can be used as a reference (7). As mentioned before, the income redistribution in 1971 caused a real increase of 16.4 per cent in the average income, and an increase in spending of 13.5 per cent. This means that for each unit increase of income, only 82.3 per cent was destined for spending. Otherwise, the indebtedness margin could not have been reduced.
The increase in food consumption was 62.8 per cent compared to income, and 76.3 per cent compared to overall spending. The impact of this increase in real spending on food consumption, with all its implications, deserves deeper analysis. First of all, the orientation of the demand for food has to be determined. Second, the size of the demand must be compared with agricultural production. Finally, nutritional impact in relation to income redistribution has to be assessed.
According to the data in table 1 5, it is obvious that consumption is weighted toward foods rich in protein. On average, the consumption of beef increased by 20 per cent, and that of chicken by 19.2 per cent. For the poorest families, consumption of chicken rose by 38.3 per cent, of milk 23.2 per cent, and of boneless beef 27.1 per cent. On the other hand, the consumption of bread, as measured by the wheat used, rose only 8.5 per cent, while rice consumption rose 8.1 per cent, and potatoes, 4.2 per cent. The tendency toward greater meat consumption derives from the belief that the basic nutritional problem is more one of protein than calorie deficiency. In Chile, the data would seem to prove exactly the opposite, as shown in table 16. The average calorie deficit, according to recommended levels, reached 21.8 per cent in 1970, while protein intake exceeded recommendations by 4.1 per cent. Among the poorest families, the calorie deficit amounted to 33.4 per cent, and protein deficiency was 16.1 per cent compared to recommended allowances.
As an additional comment, it is important to note that the protein level consumed in Chile depends heavily on cereal grain and vegetable consumption, which represents 50 per cent of the total. This will be useful in explaining the situation in the Dominican Republic. Therefore, it is suggested that the poorest families have an urgent need for foods containing both calories and proteins to take care of both deficits simultaneously.
The impact of such an income redistribution must also be measured in terms of the agricultural economy. It is obvious that the response of farmers to the situation has been less than hoped for. In the first place, the agricultural sector had structural characteristics that made production rates very low. Second, the reformed sector was in too precarious a condition to be able to respond dynamically to the economy. Finally, because of the acceleration of the land reform process itself, and because the traditional owners were the new Government's enemies, the middle class and the agricultural industry boycotted agricultural production. This was in spite of having received significant credit backing. In brief, the agricultural sector retained its structural rigidity and low productivity.
A sector of production that had had in the past growth rates of only 2 per cent could obviously not meet the increase in demand created by the redistribution of income. Had it not been for the import capacity of the country at that time, the pressure on prices would have been felt quickly and the Government's redistribution policy would have been discredited.
Table 17 shows the increment in food availability required by the increase in consumption. This is compared to the level of food availability in the previous year (7, 10).
Land reform in Chile had just been accelerated when the economic policy described was implemented. During that year, a total of 16,000 families benefited (10). They represented 72.7 per cent of all the farmers included in land reform since 1967. Moreover, the total land surface that benefited these families amounted to about 51.2 per cent of the total land affected by the reform begun in 1967.
Similarly, during 1971, the land area awarded to producers was 45 per cent greater than awarded in 1970. According to the land reform law, agricultural surface must be measured in Basic Watering Hectares (Hectares de Riego Basico), or HRBs. Each unit is a homogeneous function of economic and ecologic factors. Thus, for example, 10 hectares are equivalent to one hectare from the central valley, the richest agricultural region. The averages awarded by the reform act are therefore more relevant.
In 1971, the average amount of land owned was 2.031 HRBs per family, while it had been 0.957 HRBs in 1967, 1.357 in 1968,1.203 in 1969, and 1.395 in 1970.
The 37,000 families, curiously similar in number to the total benefited by land reform in the Dominican Republic, did not represent more than 25 per cent of the total number of families living in the country. The important point is how producers in the reformed sector responded to a significant increase in the demand for food.
There are two revealing indicators. First, the credit awarded to the reformed sector was, unfortunately, poorly administered. It was so small that it did not allow planting on more than 40 to 50 per cent of the land available. It was even worse in 1967, because in that year only 30 per cent could be cultivated. Second, because of the paternalistic attitude toward producers in the reformed sector, they refused to pay their credit debts. As no one forced them to do so, this practice provided them an additional income of between 3 and 6.6 times the salary they were being paid in addition to what they earned from selling their produce. The credit thus became a subsidy, but the farmers' efforts had little to do with the stimuli to production. This was true in 1971 and during subsequent years as well
Last, in spite of the land reform process, the private sector was in a better position to produce more food. Otherwise, there would be no justification for the fact that in 1971, it had 58.8 per cent of the credit from the Government, not counting that from the banks.
Even though the producers initially responded favourably to the increased demand, later they were reacting to the political process and exploiting it. Despite the fact that in 1972 they still retained 58.8 per cent of the total credit awarded by the public sector, their reaction was political, not economic. The generalized boycotting system that began by making goods scarcer also attracted the private agricultural producers. They began speculating by converting their production of cereal into meat. This product was one of the hardest to find, and was most readily found in the black market. A large portion of the cereals produced was used for animal feed, doubling the price of wheat. Farmers also changed their crops. Half of all land previously planted in beets was used to grow corn. Because beets were uncontrolled by the Government for producing sugar as an export crop, the conversion to corn went unnoticed. Furthermore, it was simple to feed corn to chickens or pigs for meat production because it was impossible to control the sales of these items.
The exhaustion of the already idle industrial capacity and of foreign currency reserves, and the inflexibility of agricultural practices, added to the internal and external economic boycotts suffered by the Chilean economy and caused total economic stagnation. This process turned into an inflationary spiral with disastrous results (Table 18).
If the Dominican Republic truly desires to improve the nutritional status of its population, especially in the poorest sector, the only way to do so is by redistribution of land and income. In the Dominican Republic, the majority of the families who are suffering from malnutrition are in the rural sector. Even though they are efficient producers, the amount of land they have to cultivate is so small that they cannot grow enough to provide themselves an adequate income. For this reason, the land area used for agriculture must be expanded, or the small producers and agricultural workers must be trained to earn their living in another occupation. Otherwise, they cannot earn enough to procure even minimum dietary necessities (Table 19).
According to studies carried out by the Ministry of Agriculture in the Dominican Republic, agricultural production contributes 39 per cent of the total income. However, only 73 per cent of this income stays in the rural areas (8); the rest constitutes a net transfer to the urban areas. These studies also reveal that 75 per cent of the total population with incomes of less than 50 pesos per month are rural workers, and they comprise 61 per cent of those with incomes between 50 and 100 pesos.
As already noted, even assuming a greater efficiency, many farmers would still need a larger land area to subsist at moderate nutritional levels. These are basically farmers who own less than 1.2 hectares, or 3.1 hectares if they own grass land. About 142,000 small producers, who represent 47 per cent of the total, are in this predicament. For this group to have sufficient land, according to the Dominican Government, about 294,000 hectares would have to be transferred to them. This is no small figure because it would amount to 30 per cent of all agricultural land in the country, excluding grass lands and cattle-grazing lands,
The Government has estimated what the impact of such a measure would be, considering also the relative increase in income that would occur if the land transfer took place, and if the necessary technological improvements were made. It concluded that the national average income would increase, and that 75 per cent of the population previously receiving 29 per cent of the total income would increase its share to 48 per cent. This does not mean that the remaining 25 per cent of the population would have a reduced income. On the contrary, the fact that the medium or large producers would have to become more efficient would increase thelr income. Currently, 25 per cent of the population, including the rural industrialists, obtain 71 per cent of the overall income. If land reform were carried out, this portion of the population would receive 52 per cent of the total income.
Income distribution is not the only problem, however. Agricultural production has constraints in both Chile and the Dominican Republic. In order to make agricultural production meet nutritional needs, nutritional requirements must be considered in terms of both agricultural output and dietary composition. Here, the Dominican Republic differs from Chile. First, the recommended daily calorie allowance is 2,324 per person in the Dominican Republic compared to 2,390 in Chile, and the recommended intake for protein is 59.64 grams per day compared to 46 grams in Chile. Second, the composition of the Chilean basic food basket is different, as consumption patterns tend to be more compatible with biological needs (Table 20).
One of the most serious limitations that arose when the medium-term plan was conceived was agricultural production. As I do not intend to discuss this subject in detail, I shall present only the most basic aspects that serve as elements for analysis. The agricultural economy in the Dominican Republic, although it is stagnating at present, could respond up to a certain point. It has been estimated that it could possibly achieve a 6 per cent annual, cumulative growth rate. However, it is important to note that this rate, which would have to be maintained for five consecutive years, would only partially solve nutritional problems (Table 21).
If we compare the required levels with possible goals, given a growth rate as high as 6 per cent, the nutritional deficit would still be significant. That is, even if the predicted increases are achieved for the poorest families, there is still a very serious distribution problem.
The conclusions drawn in this paper lead to two additional points. First, we must be more concerned with the effort demanded by a massive food policy, which involves social transformation, increased agricultural production, land reform, and price policy. Second, it is important to realize that malnutrition is a consequence, not a cause, of underdevelopment. In other words, the current production pattern allows accumulation of wealth by a few, while the vast majority suffer from hunger. Therefore, growth based on modernization, or on the expansion of the public sector, will be meaningless if, in the end, only a few concentrate the surplus for their own benefit. For this reason, we must think of the problem of hunger as a social, political, and economic one. It is surely not, as many would like to consider it, a welfare problem that can be solved by donated food or supplementation programmes.