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Part III: Basis for policy interventions and research priorities

Guidelines for discussion groups

Conclusions from the meeting of discussion group I: "Marketing and monitoring systems"

Conclusions from the meeting of discussion group II: "Definition of standards"

Conclusions from the meeting of discussion group III: "Price and income policies"

Guidelines for discussion groups

The main purpose of the discussion groups was to formulate concepts that could serve as a basis for both effective policy interventions and research projects in the areas considered. Each group was asked to concentrate on:

- priority topics within the area;
- definition of policy objectives and channnels through which policies can work effectively;
- gaps in theory about the mechanisms through which policy interventions and other disturbances in the system act; and
- gaps in knowledge about the problem.

Group 1: Marketing and monitoring systems

1. How can the food marketing system be modified to reduce the food costs and generate greater food flow toward the poor? What are appropriate criteria and guidelines for discriminatory pricing schemes aimed at improving nutritional status? How can negative impacts of brand-name products and advertising be offset?

2. What are useful measures of the performance of the marketing and food delivery system over short and medium terms? How can adverse price and supply trends be detected and offset before they become serious? How does one relate economic information on food quantities and prices to measurements of nutritional status used by physicians?

Group 11: Definition of Standards

1. What sort of dietary patterns are appropriate to support acceptable performance by persons in different social, economic, and cultural contexts; are there significant differences that planners can take into account? How does one deal with different requirements of children, women, etc., and how useful for policy are "average" requirements of the FAD/WHO type?How does one formulate and use in planning the fact that nutrient requirements vary significantly among individuals, even if they are of similar biological and socio-economic status?

Group 111: Price and Income Policies

1. What criteria should be used to select among possible tax, subsidy, price control, rationing, and other interventions? How much does the selection of instruments depend on quantifiable economic parameters such as demand elasticities and consumption shares of different foods, and how much on institutional problems? What are the most important two or three factors that one should take into account in setting up a programme?

2. What are the interactions of price and income policy, in both macro- and micro contexts? How does one conceptualize and classify the social classes that these policies are likely to affect?

Conclusions from the meeting of discussion group I: "Marketing and monitoring systems"

I. Priority Topics

The Discussion Group came to the following conclusions concerning priority topics within the field of food marketing and monitoring.

1. To analyze the food marketing system, it is helpful to subdivide it into four parts: import, domestic, urban, and rural marketing.

2. A rather wide approach should be taken when the foods coming from these systems are examined, to include both staples and processed foods of greater or lesser nutritional value, and sometimes directly competing nonfoods. Special attention should be given to high-priced brand-name foods.

3. It is important to start the analysis with the consumer and identify his nutritional problems and consumption patterns, and then analyze the marketing system, particularly as it affects the vulnerable groups in low-income areas.

4. When analyzing the marketing system, all the components in the "marketing mix," including transportation, buying, selling, storage, grading, information, and pricing, have to be included.

5. It is important to detect adverse price, supply, and demand trends early, and to avoid differences between imported and locally grown products by use of some form of monitoring system; for this, policy objectives for the marketing system have to be identified. As quoted from the paper presented by Allen: "Monitoring of food supplies and prices should be seen not as a passive observation of movements in quantities and prices, but rather as a positively directed activity with clear objectives, chief among which is the formulation of policy to attain stated social, economic, nutritional, and political goals."

6. Some simple kind of surveillance of nutrition, health, availability and prices of food in selected areas should be developed.

II. Definition of Policy Objectives and Channel for Policy Actions

The Group decided the following.

1. Clear policy objectives for the marketing system have to be defined.

2. The objective is to ensure the availability of nutritious foods not only in the market place, but also in the household

3. Proper performance criteria should be developed, such as attainment of adequate levels of nutrition, especially for the poor, selection of proper target groups, adequate information for consumers, desired income effects, etc.

4. These policy objectives could be carried out either by government participation or government regulation of functions, with or without the use of subsidies.

III. Suggested Research Areas

In studying areas where knowledge about the problems is lacking, and considering intervention mechanisms, the Group suggested the following research topics.

1. Analysis of how the food marketing system affects different consumer segments, especially the poor.

2. Special development of rough indicators to measure performance both at the retail level, e.g., assortment of foods, selling techniques, price levels, etc., and at the consumer level, e.g., composition of the consumption budget, choice of sources of purchase, and selection of individual products.

3. Development of guidelines for improvement of the marketing system. Analysis of the present status of consumerism and its potential role in nutritional improvement.

4. Investigation of how aggressive, commercial marketing of various types of brand name foods and non-food products may have a negative influence on food purchases and dietary intake.

5. Identification of the impact of marketing fragmentation on food availability for retailers and householders.

6. Analysis of the experiences with various types of interventions in the marketing system, such as establishment of new retail outlets, price regulations, use of coupons, etc.

7. Explanation of differences in the price of food products in different parts of the marketing system and for different types of consumers; factors such as distance, size of market, legislation, service, level, etc.

8. Analysis and explanation of price differences for different kinds of agricultural producers (with regard to size, locations, etc.), and the development of price over time.

9. Examination of existing systems for food surveillance and development of effective techniques for monitoring and control of prices, supply, and demand.

10. Development of a methodology for surveillance of the relationship between the availability and price of food, purchasing power, and nutrition and health status.

Conclusions from the meeting of discussion group II: "Definition of standards"

Setting Standards for Basic Food Consumption

Objectives. Establishing standards for improving nutritional status means that desirable food consumption habits and basic nutritional necessities must be defined in order to create a basic food basket. Once these requirements are determined, they must be compared with the prevailing nutritional situation in order to: (a) identify availability of basic products; (b) re-orient production and price policies; (c) define target groups according to demographic and social characteristics.

Methodology. Different criteria can be used to define standards.

1. Nutritional (physiological requirements). The first step is to establish calorie, protein, and other nutrient requirements according to age, sex, level of physical activity, and physiological state. In some countries it will be necessary to take into account specific regional situations. This first step is confined to nutrients, not food products.

2. Social (consumption habits, demand tendency, etc.). In the social and economic field, one must start with foods, not with nutrients, because consumption habits pertain to foods and typical local dishes. Therefore, it is important to study consumption habits empirically and learn which social group is over counsuming and which does not consume enough.

3. Economic (prices, production conditions, social infrastructure). In the economic field, one also starts with individual foods, because each one has its own price, different inputs are required for its production, and some require more intensive labour to produce than others.

4. Political (development strategy, imports, exports, etc.). According to production capacity and the political changes desired, the maximum quantities needed must be taken into account for the production of certain foods. The effects of a policy of reduction of imports or exports must be explored in order to avoid economic surpluses that might not be good for the economy as a whole.

5. Medical (underconsumption, overconsumption). To achieve improved nutritional status, maximum and minimum levels of intake can be determined for critical foods (butter, sugar, etc.).

Techniques. There are different ways of establishing models for standards of consumption that can be based on the following.

Multi-disciplinary approach: (a) determination of physiological requirements by nutritionists; (b) a study of consumption habits by social scientists; (c) a study by economists of the economic conditions in production capacity, and of the social infrastructure; and (d) a study of political strategy and its nutritional implications by a multi-disciplinary team. Based on all of these criteria, food priorities can be set in order to accomplish the goals described above.

Linear programming techniques can be employed that would be similar to those used for national budget elaboration in some of the East European countries.

Results. It is necessary to compare the national budget with actual consumption by different groups. From this analysis, priorities can be set for political action on prices, production, distribution, and definition of target groups.

Standards and Price Policies

There are several alternatives for increasing food consumption by the poor, and/or reducing over consumption by the rich.

1. Food subsidies. First, it is desirable to define food groups that may be substituted for others within the same category. A price policy should preferably be oriented to food groups, not to isolated items. Second, it is necessary to define the place where subsidies will do the most good, whether as inputs for increased production, for labour, and/or for marketing.

2. Increased production of basic foods. Agricultural policies should respond to nutritional needs.

3. Increases in real income. At the macro-economic level, increases in production must be compatible with increases in income. It is not enough to increase the income of the poor; this must be backed up by transferring the means of production to them.

4. Differential prices. In reality, prices for the same products are different between rural and urban areas, and for the rich and the poor-an inequitable situation.

5. Reduction in the number of middlemen. Marketing costs between producers and final consumers should be lowered, not overlooking the fact that a large percentage of the population earns income from commercial activities because jobs are scarce.

6. Other actions. It is also necessary to analyze the possibilities and limitations of indirect price policies, such as increases in production for consumption (family gardens, subsistence production), rationing of basic goods, community organization devices, and other measures that may contribute to the implementation of price control policies and to the distribution and/or production of basic foods.

Proposed Priority Research Areas

It is necessary to improve the methodology used for consumption surveys and for other indicators that might be applied to different socio-economic and geographic groups, not only for diagnostic purposes, but also to evaluate the changes that occur in the context of price policy or other interventions. These studies must look for feasibility, simplicity, speed, coverage, practicality, objectivity, and specificity of the data gathered. Priority must also be given to careful review of dietary survey results, particularly regarding calorie and protein intake, because there has been some exaggeration of low calorie consumption in certain publications.

It is important to place more emphasis on setting limits for maximum consumption of certain foods such as sugar, fats, etc., as a percentage of total caloric intake, so that a price policy can be oriented toward obtaining more desirable dietary habits.

Studies are needed on the level of physical activity, actual and potential, of Third World populations so that, if necessary, the basic recommended daily intakes of calories can be suitably adjusted to actual need.

Methodologies to define target groups must be improved, including socio-economic variables as well as the physical and social damage caused by malnutrition, in order to define a price policy according to priorities.

Research must be done to assess the cost-benefit ratio of alternative forms and techniques for producing basic foods in terms of satisfying basic nutritional needs.

An evaluation of different methodologies is proposed to build a rational model of consumption. For this purpose it would be helpful to analyze: - the procedure used by INCAP to establish minimum dietary requirements; - the method used to decide on what constitutes minimum food baskets, in order to determine minimum wages in different Latin American countries; - the methodology used by the Bariloche Foundation; -the methodology used in the Soviet Union (national budget); and - similar methodologies.

These proposals conform to the suggestion by national and international agencies that new orientations are needed in the formulation of development policies to satisfy basic needs. Such models of food consumption could serve as reference points for a rational basket of goods and services, which should include not only food but also other basic necessities.

Conclusions from the meeting of discussion group III: "Price and income policies"

1. It is extremely useful to make comparisons between countries where nutritional problems arise among those who produce both for self-consumption and for the market, and countries where they arise among people without access to land (for example, a comparison between the Dominican Republic and Chile).

2. Elasticities. There are indications that in Chile, people in the lowest income strata eat fewer inferior foods than do those in the strata above them. Furthermore, there are also indications that when a largely self-sufficient rural group is integrated into the market there is a fall in its nutritional status, at least in the initial period or at the lower income levels.

3. It was suggested that individuals should be ranked according to the energy requirements of their occupations; however, it was also noted that this raises problems in the case of non-remunerated labour or labour outside the formal sector, or in the case of domestic workers. The requirements of children must also be taken into account.

4. Several participants referred to observations of the elasticity of supply in peasant economies. For example, in Mexico during a recent period of acute increases in the price of maize (70 per cent), there was little increase in production of this typically "peasant" crop. Similarly, in Costa Rica the price of beans rose dramatically while all other agricultural prices remained stable, yet the production of beans grew more slowly than that of other (non-peasant) crops. It was suggested that an initial explanation of this phenomenon might be sought in the lack of extra available land for the peasant economy, and in the fact that they had reached the limit of production possibilities for technical reasons. There remains, however, the problem of substitution, and to analyze this one would have to take into account the requirements of self-consumption that may involve the production of a variety of crops together.

5. It was noted that there is not a deficit of proteins or calories, but rather of consumption in general. If this is the case, then specific programmes are insufficient to improve the nutritional situation. Rather, what is needed is a massive programme concentrating on three or four basic foods, as well as a guaranteed animal or vegetable milk supply for children. Furthermore, some supplementary fat may be necessary for people involved in heavy work, because the two meals per day that they customarily eat are unlikely to satisfy their need for some 3,000 calories per day.

6. It was emphasized that legumes and cereals constitute the most important source of proteins and that these are much cheaper than meat.

7. It is necessary to analyze the relationship between incomes and food consumption, and between increases in the two, dividing observations not only between town and country, but also between migrants and non-migrants. Various studies indicate that it is not unusual for a migrant to become malnourished as a result of dietary changes or because of numerous new expenses encountered in the town, and to have to return to his village or community.

8. The complicated relationship between increases in home-consumption and increases in production was also noted.

9. There was a discussion concerning the instruments for obtaining an increase in agricultural production, and above all, the role of prices.

10. It was suggested that research be conducted on the relationships between types of agricultural enterprise and types of production, classifying the crops according to their protein-calorie content and according to the social classes for whose diets they form an important part, seeking a greater comprehension of the rationality governing enterprises producing for both home consumption and the market.

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