* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.
What happens when foods crucial for nutrition are expensive while sugar-rich foods are cheap
Derek Headey is a senior research fellow in the Poverty, Health and Nutrition division of the International Food Policy Research Institute, Washington D.C.
Would you pay more for a dozen eggs in Washington DC or Addis Ababa? And what about a soft drink, a chocolate bar or potato chips? And is it possible that international price differences for healthy and unhealthy foods can explain why so many African and Asian children are badly malnourished, and why so many North Americans and Europeans are obese?
These are the kinds of questions we grapple with in a recent study published in The Journal of Nutrition.
While no one should ignore the roles that culture, education or advertising play in shaping diets, as economists we had a strong suspicion that the prices of different sources of calories would be a major influence on the food choices of the world’s poor. Poor people in both Washington and Addis Ababa care a lot about calories just for basic survival, so it’s always likely the poor will spend their limited food budgets on cheaper sources of energy, as previous studies have shown for European and US populations.
However, our study did something more ambitious. We used prices for 657 different foods in 176 countries to construct a simple yet powerful new metric: a relative caloric price that measures the caloric cost from any given food relative to the caloric cost of the staple foods of each country, like bread or rice. This metric captures the costs of diversifying calorie sources away from staple foods, and whether consumers would find it cheaper to diversify into healthy foods like eggs or unhealthy foods like soft drinks.
What do we find? Bad news, I’m afraid.
In poor countries most healthy sources of calories are expensive. Eggs might be the single most multi-nutrient dense food there is, while milk is especially effective at reducing child stunting (an indicator of sluggish growth). But in Ethiopia, eggs and fresh milk are 10 times as expensive as staple foods (see Figure). In fact, in another recent study of the poorest Ethiopian villages we find that these super-foods are even more expensive than they are in cities. And the high cost of nutrition in these countries evidently takes its toll: countries with higher milk prices have much more child stunting. Tragically, the poorest people live in the poorest food systems.
In rich countries, highly sophisticated food systems are much better at providing healthy foods cheaply. American cows are much more productive than Ethiopian cows, so milk calories in the US are only 1.6 times as expensive as staples. But those sophisticated food systems are even better at delivering unhealthy calories cheaply. As basic inputs into processed foods, raw sugars and oils are cheap sources of calories and are full of flavor. As a result, food manufacturers love them. Soft drinks in the US are just 1.9 times as expensive as staples, roughly the same price as milk and much cheaper than fruits or vegetables. But cheap processed foods have also infected the developing world: soft drinks in Mexico are even cheaper than in the US! Moreover, we show that wherever sugar-rich foods are cheaper, obesity is more widespread.
Fixing the global food system so it delivers better nutrition won’t be easy. The high prices of nutrient-dense foods in world’s poorest countries largely stems from low agricultural productivity. Agricultural R&D systems - like the CGIAR – need to invest more in nutrient-dense foods, and governments need to tear away the countless policy biases that favor starchy staples.
Governments also to start taking the obesity epidemic seriously. I’m pessimistic that moderate sugar or fat taxes will have much impact because our data reveal just how cost-effectively sugars and fats are as inputs into processed foods. At the very least, aggressive taxation needs to be backed up with equally aggressive food labelling. But perhaps the greatest promise lies in nutrition education for children and parents, including in poorer countries where obesity not yet reached epidemic proportions. If the history of the rich world’s largely unsuccessful efforts to combat obesity is anything to go by, prevention is preferable to cure.