World Bank Reprint Series: Number Forty-seven

Shlomo Reutlinger

Malnutrition: A Povertyor a Food. Problem?

Reprinted from World Developmient 5 (1977)

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The most recent editions of Catalog of Puiblicationis, describing the full range ofWorld Bank publications, and Worldi Bank Researchl Progran n, describing each of thecontinuing research programs of the Bank, are available without charge from:The WVorld Bank, Publications Unit, 1818 H Street, NNW., Washington, D.C. 20433U.S.A.

WORLD BANK BOOKS ABOUT DEVELOPMENT

Research Publications

linternzatioinal Comiparisons of Real Prodtuct and Puirchinsing Power by Irving B. Kravis, AlanHeston, and Robert Summers, published by The Johns Hopkins University Press,1978

Experiments in Family Plannin i g: Lessons from the Developing World by Roberto Cuca andCatherine S. Pierce, published by The Johns Hopkins University Press, 1978

Income Distribution Policy in the Developing Countitries: A Case Stundy of Korea by IrmaAdelman and Sherman Robinson, published by Stanford University Press (in theCommonwealth, Oxford University Press), 1978

Interdependence in Planning: 1\1 ultilevel Progranmming Stuidies of the Ivory Coast by Louis M.Goreux, published by The Johns Hopkins University Press, 1977

The Mfining Industry and the Developing Countries by Rex Bosson and Bension Varon,published by Oxford University Press, 1977

Patterns in Household Demand and Saving by Constantino Lluch, Alan Powell, and RossWilliams, published by Oxford University Press, 1977

Unskilled Labor for Developmient: Its Economic Cost by Orville NIcDiarmid, published byThe Johns Hopkins University Press, 1977

Electricity Economnics: Essays and Case Stuidies by Ralph Turvey and Dennis Anderson,published by The Johns Hopkins University Press, 1977

Housing for Low-income Urban Famiilies: Economics and Policy in the Developing World byOrville F. Grimes, Jr., published by The Johns Hopkins University Press, 1976

Village Water Supply: Economiics and Policil in the Dcveloping World by Robert Saundersand Jeremy Warford, published by The Johns Hopkins University Press, 1976

Economnic Ana lysis of Projects by Lyn Squire and Herman G. van der Tak, published byThe Johns Hopkins University Press, 1975

The Design of Rural Developtment: Lessons f-oir Africa by Uma Lele, published by TheJohns Hopkins University Press, 1975

Economy-Wide Models and Developmient Plantnling edited by Charles R. Blitzer, Peter B.Clark, and Lance Taylor, published by Oxford University Press, 1975

Pattertns of Developmnent, 1950-1970 by Hollis C(henery and Moises Syrquin wvith HazelElkington, published by Oxfordi University Press, 1975

A Systemn of Initernsatioinal Comtipar ison1s of Gross Product and Putrchasing Power by Irving B.Kravis, Zoltan Kenessey, Alan Heston, and Robert Summers, published by The JohnsHopkins University Press, 1975

Country Economic Reports

COMno10n17Vealth Caribbican: The Intc1gration Experience by Sidney E. Chernick and otlhers,published by The Johns Hopkins University Press, 1978

Ivory Coast: The Clhalleinge of Sii L.cess by Bastiaan den Tuinder and others, puLblished byThe Johns Hopkins University Press, 1978

Kenzya: Into the Second Decade by John Burrows and others, published by The JohnsHopkins University Press, 1975

(continued on inside back cover)

World Developmnent, 1977, Vol. 5, No. 8, pp. 715- 724. Perguniul-i Press. Printed in Great Britain.

Malnutrition: A Povertyor a Food Problem?

SHLOMO REUTLINGER*

The World Bank

Summary. - The author discusses malnutrition as the 'silent' food problem - a povertyproblem - separate from the 'overt' food problem of scarcities of food in markets. Thedimension of malnutrition which is treated here is the important calorie deficit problem - aproblem which is often not revealed by aggregate food consumption data. The author presentsdat4 estimating the orders of magnitude of calorie undernutrition and then discusses numerousoptions as direct approaches to reduce malnutrition in market economies: (a) consumereducation, (b) food market intervention, (c) incorne earning oprortunities for the poor, (d)income redistribution, and (e) target group oriented food distribution measures. The optionsare evaluated with regard to their cost-effectiveness. lie concludes that the costs of (a-d) areprohibitively high and therefore, (e) .- a programme along tlle lines of a food stamp programme- is the option most likely to eliminate malnutrition.

The coincidence of a world-wide scarcity of with Professor D. Gale Johnson's excellentfood several years ago and a growing awareness evaluation of the problem presented in 1975.1and new perceptions about the nature of World-wide, there is no perceptible danger thatwidespread malnutrit on in developing food supplies would not keep pace with grow-countries have given birth to a new myth, that ing food market demand at reasonable prices, atthe two problems - the 'overt' food problem, least not for the next 25 years. Events sincei.e. scarcities of food in markets, and the 'silent' two years ago have dealt kindly with Professorfood problem, i.e. malnutrition - are one and Johnson and unkindly with the conventionalthe same. Widespread malnutrition and scarcity wisdom which prevailed at that time. Fewof food in the marketplace have elements in believe today that the scarcities experienced incommon, but their origin and remedies are the early 1970s foreshadowed the beginning ofmore different than alike. In this paper I intend an imminent trend. On the other hand, all theto highlight the major differences, because only concern expressed over the international dimen-through a sharper perception about the nature sion of the food problem by Professor Johnsonof these related problems can we expect to deal two years ago remains valid today. Unless thewith them in a realistic and effective way. rate of economic development, agricultural, and

other-,ise, can be accelerated in the developingcountries, the poo;est and most densely popu-

WHAT IS THE 'OVERT' FOOD PROBLEM? lated among them might be faced with declin-ing per capita food cornsumption and much

The overt food problem is all about total or higher internal food prices.average food consumption, production and Many battles still have to be won in this raceprices. The central concern is whether the between growth in food demand and generalglobal food supply will keep pace with the and agricultuiral development in the mostgrowth in demand caused by population and populated countries of the world. But I feelincome growth, and whether developingcountries, where most of the increase in .Shlomo Reutlinger is a Senior Economist at thedemand is taking place, can develop their World Bank. This paper was originally presented as theagriculture and their capacity to import food at Fourth Annual M. Brooks Jamnes Memorial Lecture onan adequate pace. 24 March 1977 at North Carolina State tlniversity.

I will not comment much here about the Responsibility for the views expressed is to be'overt' food problem, basically because I agree attributed solely to the author.

715

716 WORLD DE'VILOPMW.NT

optimistic about the outcome because I believe mation about the magnitudes of calorie under-that the problem is now generally perceived for nutrition in most low-income countries aroundiwhat it is - a problem of economic under- the world. The problem has been gaugeddevelopment, and not a problem of an irre- sometimes by recording the number ofmovable food supply constrainit, National and countries or groups of countries in which perinternational attention has been drawn to the capita calorie consumption ialls shlort of perneed to accelerate investment in agricultural capita calorie requirements for nutritionaldevelopment and to control population growth. adequacy. But such estiiates inspire little

Also, there is a growing awareness of the need confidence and could be nmisleading, given whatfor holding food stocks as insurance against we know about the unequal distribution ofunusually bad harvests. All these measures give food in market economies. For instance, we dosome confidence that severe food scarcities know from extensive household surveys con-such as we have experienced in the early 1970s ducted in the 1960s in Brazil, that per capitaneed not be repeated. calorie consumption in that country wvas in

excess of requirements. But 40%> of the popula-tion had calorie deficient diets and the aggre-

WHAT IS THE 'SILENT' FOOD PROBLENM? gate amount of that deficit was the equivalentof 7% of the country's total calorie consump-

But what I really want to discuss here is the tion.point that the problem of malnutrition can and Put ancther way, a country may have ashould be addressed independently of the horrendous malnutrition problem, which is notquestion of pessimism or optimism about the revealed by aggragate food consumption data.global food supply problem. I would like to Moreover, aggregate calorie consumption dataconvey some evidence for my belief that solving always underestimate the nutritional caloriethe 'overt' food problem is not sufficient deficit because they make no allowance for the(unfortunately!) nor necessary (fortunately!) to obvious fact that nutritional surpluses c)n-reduce malnutrition in any reasonable period of sumed in some countries and by some incomnetime. groups do not compensate for deficits in otlter

The 'silent' food problem is the chronic countries and other income groups. Besides,malnutrition of the poor. Regardless of whether they tell we nothing about the characteristics offood markets register shortages or surpluses, the undernourished population and their where-malnutrition causes millions of deaths each abouts.yL ir. In some societies, 40% of the children Yet, it is possible, I believe, to make a goodborn die before they reach the age of 5, mostly guess at the orders of magnitude of caloriefrom nutrition related causes. Approximately undernuitrition with existing, though admit-40% of the survivors suffer learning, behaviour, tedly less than adequate, data. My colleague,and work capacity handicaps due to inadequate Marcelo Selowsky and I have ventured to do so.diet and recurring illness. In short, malnutrition Our results and the methodology are describedreduces the productivity potential of indivi- in our book Malnutrition and Poverty, pub-duals and societies and impairs human capacity lished recently by the World Bank.2

to enjoy the costless satisfactions a healthy and I will not elaborate much on the technicalvigorous life can afford. aspects of the methodology we used, except to

Mtalnutrition can be wholly or partly caused note that our global assessnment represents toby poor quality of nutrition or poor health my knowledge a first attempt to take explicitstatus of the afflicted population. However, in account of the unequal distribution of foodrecent years nutrition scientists have reached consumption among different income groups insome measure of agreement that many millions the population. Our basic strategy consisted ofof people, adults and children, in developing first allocating the total kinown amounlt ofcountries suffer from nmalnutrition, not because calories consumed in four major regions anmongthey do not know what to eat or not even eight income groups. Then we calculated thebecause they cannot obtain the right kind of calorie deficit for the income groups whosefood, but because they do not have the means consumntion is less than adequate.to obtain enough of their accustomed diets. Figure 1 illustrates the results obtained from

Although this is by no means the only this kind of analysis for the Latin Americadimension of malnutrition, it is this important Region. The height of each bar in the histogramcalorie deficit problem to which I will devote measures daily per capita calorie consumptionmy attention. of each group in the population. The width of

Unfortunately, we have little direct infor- each bar is proportional to the share of each

MALNUTRITION: A POVERTY OR A 1:OOL) PRO3IILE.NI' 717

3,500 - body maintenance and moderate activity ofadults and desirable rates of growth in children.

30 I have heard nutrition experts say that theLPect 3,X0u -- WHO/FAO recomnmended calorie levels are too

o JPercamqurwm1) high. But others have said they are too low. WeL0 , I also do not know whether calorie requirementsv: 47 -- ----- /----. .,---

for the low-income population are lower orhigher than average requirements. At least in

2,000 the short run, low incomes are indicative ofunderemployment and lower than average bodyweights. This would suggest lower calorie

Q. .00 j requirements. But if underemployment iscaused by low productivity potential and not

'ooo 7 16 13 -197 2only by lack of employment opportuinities,7 t6 ota 11p9l7iSn3 people should not be left caught up in that low

nutritional eqtuilibrium trap. Furthermore, low-Fig. 1 Latin America, calorie consumption by income income groups may have higher than average

groups, 1965. calorie requirements, because they usually doincome group in the Region's population, Note more strenous physical work and because theythat daily per capita calorie consumption for have a hiigher incidence of diseases of a kindthe total population in the Region exceeded which reduces their digestive efficiency.recommended daily calorie r .quirements. But Our results stand up by way of generalthe population in the four lowest income orders of magnitude despite the wide range ofgroups, comprising 47% of the total population potential error in the data and parameters. Forconsumed less than recommended. The shaded instance, we examined the consequences of aarea in the graph indicates the extent of the range of plausible assumptions about changes oftotal calorie deficit, calorie consumption in respoilse to changes in

Before presenting the results from this kind income. We observed that our sedtprminatin ofof analysis, let me comment briefly about the the size of the undernotlrished populationbasic data and assumptions. remained fairly invariant However, per capita

Regional income distributions were esti- calorie deficits, and hence the total caloriemated on the basis of income distribution data deficit, are quite sensitive to the assumedof 30 countries compiled at the World Bank. relationship between consuimption and income.

The regional per capita calorie consumptiondata, presented in Table 1, are weightedaverages of per capita consumption in each MALNUTRITION: A POVFRTY ORcountry of the region. The country data were A FOOD PROBI,FNI?estimated by FAO on the basis of food balancesheets averaged over three years, 1964-66, the Table 2 (overleaf) gives ihe extent of calorielatest published data at the time we conducted malnutrition in a normal year in the mid-l 960s.our study. Accepting WHO/FAO recommended regional

The calorie requirements have been also calorie requirements, approximately 1100estimated by FAO on the basis of demographic million people, or 74% of the total populationdata for each region and WHO/FAO nutrition of the developing Ctoutliries in 1965, consumedexpert committee recomm,endations. These less than recommended calories. The totalrecommended requirements are consistent with implied deficit is on the order of 350 billion

calories a day, or the equivalent of about 40Table l.Actual daily calorie consumption million tons of foodgrain annually. Abot, t 82%9.and requiremetnts bJy developing countries of the undernourished population resides in

bjy mwor regions, 1965 Asia and Africa.T able 3 (oi'crleaf) gives the dimension of the

Daily per capita calories calorie malnLutrition problem if requirementsRegion Consumption Requirements were set at 250 calories less than the WHO/FAO

_______--______- recommendations. The affected populationLatin America 2,471 2,390 would be somewhat reduced to approximatelyAsia and Far East 1,984 2,210 855 million people, or 55% of the total popula-Africa 2,154 2,350 tion. But the implied food deficit would be re-

A duced very substantially to an equivalent of 11

718 WORLD DITVFLOPMENT

million tons of footlgrains, annutally. cost could be in excess of 5% of their GNP.What cani we conclude from observing these The second conclusion is that the direct

magnitudes? The first and most significant con- total calorie deficit implied by all this inalnLitri-clusion must be that malnutrition is basically a tion is small in terms of global food suppliesproblem arising from the maldistribution of and economic resources. The equivalent foodfood consumption within and between nations. requirements are in the range of 11 to 40

Fven if we were satisfied withl meeting million tons of foodgrains or a mere 1 to 3', ofminimal rather than recommended levels of current world production. Clearly, the problemcalorie requirements, about 50'," of the popula- does not arise from a scarcity of food andtion in the dleveloping countries go wtnder- insufficient agricultural supply potential. Thenourishedl in an average year. economic cost of this calorie gan is in the range

Also, as Table 4 illustrates, malnutrition is a of 2 to 8 billion dollars, which is aboutserious problem for developing countries collec- one-tenth of one percent of the world's annualtively. To satisfy the WIO/FAO recommended gross product or the equivalent of New Yorkcalorie requirement levels these countries in the City's welfare budget. Clearly, malnutrition isfour regions would have to supply their afflic- also not an economic imperative.ted population ainually with additional food People may honestly hold pessimistic orequivalent to 5 to 13% of present calories optimistic views about the population/foodconsumed. It must be nioted that this 'nutrition problem in the year 2100. Yet common sensegap' is over and above the usually cited 'food and a few calculations like the ones I have justgap' (the difference between consumption and described should convince us all, if we are notdomestic production), which is already quite convinced already, that contemporary malnutri-high and expected to grow if present trends tion is not a question of pessimism or optinlisnmcontinue. The cost of this 'nutrition gap' is also about the race between population and foodvery high when compared to total GNP. For supply.individual countries the equivalent annual food Needless to say that I regard 'triage'-type

Table 2. Numbier of people consuming less thtan FA1 0/ktfl0 calorie requirenments and caloriedeficits by regions in developing countries. 1965

Population Percent Average daily Total daily(million of popu- calorie calorie deficitpeople) lation def icit (billion)

Latin America 113 46 283 32

Asia and Far East 736 82 306 225

Middle East 91 63 352 32

Africa 190 77 317 61

Total 1130 74 350

Table 3. Vumber of people consuming less than 250 calories below FAQ/WHO calorierequirements and calorie deficits by regions ini develo ping corunitries. 1965

Population Percent Average daily Total daly(million of popu- calorie calorie (Jelicit

Regiion people) lation deficit (billion,l)

Latin Amnerica 55 22 200 11

Asia 563 63 114 64

Middle East 73 52 157 12

Africa 151 61 130 20

Total 844 55 107

NMALNUT'RITION: A POVERTY OR A FOOD PROBLANI? 719

solutions, which suggest that a few hundred 2,800-million people should be left to starve in order I: meve thoc7ne sthat the remainder should have enough food to r-P cpa wth aveft oflive, utter and complete nonsense. Such solu- 2,4E. l I Aessr1an750cdorws

tions are rooted in a misconceived perceptionabout the nature and the size of the malnutri-tion problem. Malnutrition is not the conse-c2000quence of global food scarcity. 00 '

I regard as equally deceptive the optiniistic -perception which would have us believe thatthe malnutrition problem will disappear in the 9 1,600-iormal course of development. Current rates of °growth in per capita income and per capitafood supply, coupled with the prevailing pat- 1,200-terns of income distribution and other polioies -Echaracteristic of market economies, are too low z ito eliminate malnutrition. E

Figure 2 illustrates projected changes in the 800'

size of the .undernourished population underthree scenarios of general rates of developmentthrough 1990. Under Scenario A per capita 400 o '

income in all income groups would grcw at A S :approximately the curfent rate of growth in per .> >fcapita income in each of the world's major -' - i EA1 6 C A 8 Cregions, and per capita food supply would grow t965 1975 1990just enough to meet the demand generated by Year and projectinthat growth of income. Our projections indicate Fig. 2 Estimated undernouried population and totalthat the number of malnourished people by population, 1965, and three alternative projections,1990 would be higher than today. 1975 and 1990.

Scenario B assumes that there would beabout double the current growth rates of percapita income and enough growth in per capita have a major positive impact. Although the sizefood supply to meet the demand generated by of the undernourished population remains high,that higher income. Scenario C assumes a more their average daily calorie deficit would berapid growth in per capita food supply, provid- substantially reduced. But note that even toing for increased per capita consumption and achieve marginally positive nutrition effectslower food prices. Clearly, accelerated aggregate from accelerated general development it wouldincome growth and greater food availability can require that the income of the poorest groups

Table 4. Calorie deficit in relation to regionalconsumption and GNP, 1965

Calorie deficit as a percentage of Cost of calorieTotal calorie Total cereal * deficit as aconsumption consumption percentage of GNPt

Latin America 5 12 0.5

Asia 13 18 4.2

Middle East 10 13 1.6

Africa 11 19 3.9

*Annual cereal consurnption is 28, 128, 26 and 33 million metric tons in, respectively,Latin America, Asia, the Middle East and Africa. (I.AO, Agricultural C(ominodiryProjections, 1970-80 (Rome: 1971).)

tThis cost estimate assumes that the calorie deficit would be made up by cereals at aretail cost of $200 a metric ton.

720 WORLD D1:VF.LO1P11:N'I

in the population should rise at the same rate as Republic of China explicitly recognize thatper capita income. Past development experience developnmei-at must encompass satisfaction ofshows that this is an overly optimistic expecta- basic needs, including minimally adequatetion for many countries. nutrition, for the entire populatioi. Also, the

There are, of course, good reasons why attention to alleviation of unemployment andgeneral and agricultural development should be involvemenit of large numbers of snmall farmersadvocated also as a solution to the nmalnutrition in internationally-assisted development projectsproblem There are no solutions which are are indications of a positive comnlmitment to the

pi)litically less controversial than for national alleviation of poverty and inalnutitritioni.governments and international aid agencies to Moreover, there is growing awvareness thatadvocate more of everything for everybody. I reducing nmalnuitrition is not only a moral anddo not think it is realistic to expect that general political imperative. It is increasingly believedand agricultural development in the developing that mninimally adequate nutrition, like educa-countries will proceed at the pace whih woultld tion, is a sound and necessary investment forbe required to reduce malnutrition substantially future growtlh of the national product. Fcono-within the next 20 years. If we are at all mists, notalbly thirough the intellectual leader-concemed with the problem, it is necessary to ship of Professo,r T. W. Schultz, long ago

ask what more could be done. developed the relevant human capital theory.Unfortunately, it is extremely difficult to makeempirical estimates of the effect better infant

miI('cr APPROACHFS TO REDUCF nutritior today in India would have on theMALN!UTRITION growth of its national product in the distant

future. While we should strive to get suchI believe there are available a number of pertinent estimates from researclh, I believe that

activist approaches which could be employed to few would qu1estion the need to proceed witheliminate malnutrition if the will is there and reducing calorie malnutrition wimllout knlvw-the costs are judged acceptable. ledge of the precise productivity benefits.

Persistence of malnulrition is a human The main challenge then is to seek outbehaviour problem -- the conisequence of cost-effective measures to deal with the prob-choices made by individuals, national govern- lem, Let me suggest some relevanit considera-ments and international agencies acting on their tions. I wiLl restrict my discussion to policybehalf. The undernourishied population could options which are relevant to market economiesreallocate a larger share of their meagre incomes only.to the purchase of nutritionally essential food, I know of no way by which to compareGovernment could institute policies to in- costs in societies which are constituited onfluence household decisions through incentives widely differfnt philosophies, It is believed thatand education. Finally, government and inter- China has managed to substantially reduce, if

national aid programmes could reorientate not eliminate, malnutrition. But little is knownpriorities accorded to different categories of about the costs involved, nor do we knowpublic expenditures. conceptually how costs should be inputed in a

It is difficult to judge the level of national society which is constituted on radically dif-and intermational commitmert to the goal of ferent values. Moreover, given political realities,reducirng malnutrition. But there are positive I do consider it uLnrealistic and tinnecessary tosigns. advocate a change in the fundamental strructure

I believe that the mention of malnutrition in of a society just for the sake of reducingalmost every discussion of the food problem is malnutrition.an expression of genuine concern, AIthiouigh the A market econonmy strives implicitly tooften implied notion that an increased food satisfy many humiianl needs. While subjectivesupply would take care of the malnutrition choices have to be made by eaclh scteiety, costproblem is in my view incorrect, the rhetoric comiiparisons of differelnt policies to aclhieve aimplies some measure of good will, desired effect cani be extremely helpful to the

There is also a growing awareness by many process of policy decision-making. The options,

governments of developing countries and their I will co.isider in some detail are (a) consumer

international advisors, that growth of the education, (b) food market intervention, (c)

national product per se has done very little to income earning opportunities for the poor, (d)

alleviate misery among the masses of poor income redistribuition, and (e) target grolup

people in the world. Countries as far apart in oriented food distribution measures, If youl

political and social philosophy as Brazil and the leave aside the pessinmists or the optimists

MALNUTRITION: A POVERTY OR A FOOL) PROL-LI NM? 721

(those who think it either futile or unnecessary governments already spend large sums ofto do something specifically to combat malnu- money on subsidizing a spread between thetrition), you will find people often advocating supply price of food and the price at whichpolicies more or less in that order of preference. food is sold to the consumer. The cost of

Basic to any discussion of cost-effectiveness reducing malnutrition through such a policy isconsiderations is a common perception about outright prohibitive.the size of what economists call the marginal From demand theory we know that con-propensity of the undernourished population to sumers tend to increase their consumption of aspend additional income on calories. I believe commodity in response to a reduction in itsthere is evidence that this marginal propensity price for two reasons. A reduction in the priceis low, somewhere on the order of 7 calories per of food on which they spend a goodly portionday or 2600 calories per year for a dollar of their income is tantamount with an increaseincrease in annual income. Given that the cost in their effective income, and as we notedof 1000 calories when obtained from cereals is earlier consumers will consume more food asabout 7 cents, it implies that even low-income their income rises. The second reason is thatconsumers spend only about 18 cents out of consumers normally increase their consumptioneach added dollar of income for calories. This is of a cominodity whose price has been lowereda much lower figure than observed marginal by more than the implied income effect. This ispropensities to spend on food. But I believe called the substitution effect.there is no inconsistency. People purchase food, Without further studies of the income andnot calories. When they obtain additional in- substitution effects from a food price reductioncome above their long accustomed bare subsis- we will not know precisely by how much foodtence requirements, they purchase a little meat, would need to be subsidized in order tofish, vegetables or fruits. The cost per calorie increase calorie consumption of the under-obtained through these foods is often two to nourished population. There is, however,four or more tirnes the cost per calorie obtained evidence that the income effect dominates thefrom cereals. substitution effect for low-income consumers,

Now let us consider the various policy and we can venture guesses at some orders ofoptions. magnitude.

I estimate that it would take an increase ofincome of roughly 35 dollars per capita to

(a) Consumer education increase per capita consumption by 250 caloriesper day. For one billion people, this amounts to

Economists of the liberal classical persuasion 35 billion dollars. If lowering the price of foodusually advocate consumer education as the also induces higher consumption through thepreferred solution. It costs so little and it substitution effect, the cost might be reducedminimizes interference in the economic and to 25 to 30 billion dollars. However, this is notsocial system. The trouble is that it does not all of the cost. A general price subsidy whichwork. Families who already spend most of their does not discriminate between the under-income on least costly calories cannot be nourished and the adequately nourished popu-expected to do much better. It is difficult to lation could imply a government subsidy severalpersuade them to spend additional income on times as high, depending on the amount ofmore of the same food. People who have long subsidized food consumed by the adequatelyexperience on getting along with the food t.hey nourished population, Besides the large fiscalneed for basic subsistence seem to have a high cost involved, the general food price subsidypropensity to spend additional income first on policy induces a very substantial increase inthe better things in life - a bottle of coke, an food consumption by the adequately nourishedorange, or a transistor radio. You can't blame population as well soietLhing a food deficitthem for not heeding nutritional education, country can ill afford.when educated and sophisticated consumers do A variant of this policy is to hold down thenot live by what they know to be nutritionally domestic supply price. The subsidy cost isright. transferred from the taxpayers to fanners. But

this policy curtails domestic food production,increases food imnport requirements, and

(b) Food market intervention reduces employment and income earningopportunities of the low-income rural popula-

Another often advocated remedy for malnu- tion. On balance, this population may be worsetrition is the cheap food price policy. Some off nutritionally than without the programme.

712 WORLD DIIvTOPlINl NT

A cheap food pi ice policy across the board tive of self-help, it would do no violence to themay be preferred, of course, for other mnacro- poor's consumer sovereignty. As I have notedeconomic objectives, like holding down wages already the cost would be on the order of 35or stimulating general demand, and such a billion dollars in order to induce an increase ofpolicy may be administratively or politically 250 daily calorie consumption in the under-preferred. But can poor countries afford a niouirislhed population. Except for perhaps theIhigh-cost solution to achieve the (desired nutri- most advance-d developing countries, it is not ation objective? They clearly cannot. Food realistic opltion. ln the most seriously affecte(prices are rarely kept low eniough thrcu gi sub- counitries, there just is not enough incomne tosidies or price controls to have a significant distribute, nor is an international annualnutrition effect. inmonme distributioni of such magnitude in the

I believe that cost-effective solutions must cards. In any case, it is not a c(ost-eflectivebe soughlt out amoniog policies whicvl selectively solution.lead to increased food purch.lse rower among A variant of straight incomne transfers some-the uindlernourished target p,,pulal.on. tilmes suggested is the s,ale of food to the target

popnUltion on concesiornary terms. But as Ihiave noted earlier, the low-income consumer's

(c) In1on e earning oppv)rtu'mith , t'r the poor response to a price change is dominated by itsimiiplied inctonie effect. (oncessionary sales of

The most often advocated solution is to food will therefore have almost the same effectprovide full eniployvnent with adequate wages. as a straight income transfer, and the cost ofConsumer sovereignty, son much clherished by increasing calorie consumption through the saleneo-classical econonfimLts.. wotuld be fully pre- Ot iooLI on concessionary terms wiLl be nearlyserved. The taret pompulaftion vol,i1 not ;nly as high as it would be by a straight incomnleobtain adequate nutritimn, but also the prsy hlot- tinsfterlogical satisfaction of being prodictlive and incontrol of their own lives. B3ut how realistic is itto expect that any tinme "oon a few hunidred te) Fsood. tarznpryp prera in n . I'vrmillion jobs could be created or upjigraded toprovide the undernoureihed population of one We have seen that all the Policies discussedbilion people with enough additional income so far are cost ineffective. \ny realistic assess-to intcrease their daily calorie conusumption by ment of the likely resouirces to become avail-250 calories? As noted before, on the basis of able *hould c1omnpel us to seek out much moremy estimate of the marginal propensity to cost-vitective mneasures. Fortunately, a foodincrease calorie consumption, the under- stanmp type progranme. has the potential fornourished popiulation wovuld need an additional mneeting this objective. In principle, such ainconme of 35 dollars per capita, which for a pirogrammeit aims at channeling a dollar's worthbillion people aggregates to 35 billion dollars. of public expenditure into a dollar's worth ofEven if it would take only 2 doilars to genernte increase(d consumption of the desired food byaddlitional income of one dollar, it would the undernourished populatiosn. In practice, it isretluire an investinent of 70 billion dollars. Tnis much more difficult to design and implementsum comes close to the total present (N41' of all ost-effective programnmes, but the potentialthe cotuntries where most of the worldv s nudlnki- so)h1tion, I lbelieve, lies in this (lirection.tritioi i% coincntratedl. Aside frorn the co*st 'Ito ithe extent that a food stanmp prograinmmesuch a paolity presumes vast structural changes could be implemented with 1 U0" erficiency,in distribution of assets, I lllmd ttenolrt llnd credit. the eost to increase daily coinisrmption by 250ObvioLAsly, new and more remunemrative jobs , ties for onle billion pteople cou ildi be hleld toThould be created and not mnlv for the .al.x of a total of approximately S billion dollars. If mIVCradficaiting imalnutitritioini. But if inalntitrititi is es.tirnate of the mnarginal propensity of thleto be reductd in the rIe,mt nime, mnire cost- target population to spenid additional inconleeffective solutions must be found. on calories is nearly correct, the cost of

attaining the samie effect througlh any of theother pOlli6ies w.uld be at least nearly fiveftild

(d) inJcome redivtribution this cost.An Offective food stamp programme has a

Inceome redistribultion thr,tigh a kind oft a purirlase requirement of food stami.ps eqLuiva-negative inconme tax is also orten advocated as a lent to the value of food purchases by thesolution. Wlhile it would not satisfy thie j^jec- participant before the programTine. 'he ex-

MALNUTRITION: A POVk-RrY OR A 10()1) PROt111I I? 723

change value of the food stamps for the tion of incremental income gains into increaseddesignated food would need to be set high food consumption. This might be best achievedenough to provide the participant with a by promoting more food production for honlenutritionally adequate diet. With an effective consumption. Alternatively, if expandingprogramme, the cost is just equivalent to the production for sale can be shown to be clearlyvalue of the food needed to fill the nutritional more advantageous, special measures might begap. Any diversion of food stamp benefits to taken to induce farmers to use their inconeother uses, either at the store or outside, would gains for the purchase of calorie efficient foods.obviotxsly decrease the cost effectiveness of theprogramme.

Food stamps were first proposed in 1936 by SOIME FINAL POLICY (CONS1 ) RA1l INSDr. Fred Waugh, an economist working for theUS Secretary of Agriculture, Henry Wallace. I Let me now sum up and make a few moream familiar with all the criticisms levelled at the remarks about relevant international policyfood stamp programme as it evolved over the considerations. To leave no misunderstanding, Iyears in the United States. But I believe that did not intend to imply that chronic under-with all the imperfections, there is still good nutrition is the only food and nuitritionevidence that from a nutritional point of view problem requiring public intervention. Invest-the food stamp programme is more cost- ment in agricultural growth in food deficit andeffective than an equivalent inconme transfer. surplus countries alike, food stocks as insuranceThe existing programme in the US deliberately against bad harvests and many aspects oftrades off nutritional benefits for greater qualitative mnalnutrition involving speciticgeneral welfare benefits, reflecting, correctly in nutrient deficiencies and target groups are realmy view, the belief that the United States can and inmportant problemns deservinig equal atten-afford to provide its low-income population not tion.only with better nutrition but also with the I have concentrated on the distributionalmeans for satisfying other basic wants. How- dimension of the food problem and how itever, given the dimension of the malnutrition affects malnutrition, hecauise I believe this to beproblem, world-wide, the design of a more pure one of the least understood and documlentedform of a food stamp programme, which aspects of public policy. By any measure,channels income transfers into consumption of calorie undernutrition affects the lives ofcalorie efficient foods, may be a clear necessity. hundreds of millions of people in the develop-

It must be recognized, of course, that a food ing couintries. The severity of the problemstamp type programme is implementable only oscillates from year to year with the fortunes ofto the extent that undernourished people global and nationial food supplies and economicactually purchase their food. This is a much performance, but it is a chronic problemn,larger proportion of the total undernourished irrespective of good or bad harvests.population than is generally believed. There is Clearly malnutrition is not inevitable. Theoften an incorrect presumption that the low- incremental amount of food needed to elimi-income population in rural areas consists nate calorie undernutrition is small relative tomostly of small farmers. The precise statistics existing and potential global food Supplies, andare unknown, but I believe that families owning the cost of the calorie deficit is small relative tofarms which are large enough to potentially the size of the world's econonmie resources.supply themn with enough food, but not too But malnutrition is not likely to g(o awaylarge to supply them already enough food, without extraordinary efforts reqtuiring theconstitute no more than 50% of the under- commitment and resources of the seriousl)nourished rural population. Given that at least affected couintries and the internationlal coin-30C of the undernourished live in urban areas, munity. It is primarily, a prol'lelnT of llnsamtis-it is reasonable to assurne therefore that 65 to factoryr income dlistributionl within and3 bet ween70,, a clear majority of all undernourislhed countries. fven the most ardent proponents ofpeople, acquire their food through purchases in laissez faire would not contend that eco,nomiccthe market. progress will of itself provide for alleviation of

For the minority of the undernourished poverty and nmalnutrition in any foreseeablepopuilation, the small farm families who largely fu ture.consume the food which they produce, a food Policies to expedite general economic andstamp programme is not feasible. But cost- agricultuiral development anl conmmioditystahili-effective solutions for this group must also seek zation, justifiablc on economic efficiencyout interventions which clhannel a large propor- groundls, should of course be imlplemlente(d to

724 WORLD DVIFLOIPMFNT

the fullest extent. Progress along these lines will maintaining an adequate rate of growth of foodhave direct benefits for the undernourished productiotn in proportion to the growth ofpopulation and will provide the resources to market demand for food. They cannot beaugment the inadequate food purchasing power expected to bear the fiscal and foreign ex-of low-income groups through. special publicly- change cost of aiding a large proportion of theirfinanced schemes. population to augment their inadequate food

I have presented some evidence that the purchases.usual palliatives suggested to reduce malnutri- With aid from the rich coLuntries, it istion through redistribution schemes -con- possible, however, to rid the world of the worstsumer education, subsidizing general expansion manifestations of mnalnutrition and poverty.of food production, cheap food price policies, Provided that the countries in whose horder';creating more income opportunities for the the undernourished population lives are willing,undernourished population, and income distri- to initiate cost-effective programnmes, I believebution - are not cost-effective policies for it is realistic to expect that additional foreignreducing malnutrition. Even if some or all of aid for this specific purpose could be mobilized.these policies were justifiable on other than Food aid has an important place in thisnutrition considerations their costs are prohibi- malnuitrition eradication task. in food deficittively high. It is therefore unrealistic to expect countries, filling the nutrition gap wvithoucthat these policies could be implemented to the additional food imports wotuld he impossibleextent requi-red to reduce malnutrition effec- withlout raising local food nriCL Suchtively in the foreseeable future. I believe that a countries could benefit from food aid wit;houjt.programnme which embodies the principles of a any fear whatsoever of reducing incentives tofood stamp programme, i.e. a programmile which dlomiestic food production prioided that thechannels all or nearly all public expendittires food aid is channeled into added consutmptiondesignated to the reduction of malnutrition by the uindernouirislied popldation.into higher food consumption by the under- If I had to sum up mty persp(ectivV in onenourished population, can be cost-effective and sentence, I would say that the man;11lutrition is ashould be pursued until such time that poverty poverty problenm which can he effectivelywill have been eliminated in fact, not just in tackled, if solutiions are based on a realistictheory. assessment of food consum)ptioin ii.Ltterns of the

But even the most cost-effective programmei undernourished poptllation and the financialto combat malnutrition is far too costly to be and economic costs of public intervention. Theimplementable by the developing countries left ULnited States alone is currently spiendinig ')to their own resources. The most cost-effective billiotn dollars for (domiiestic food consumptionprogramme would require a budgetary cost on supplementation programmnies. Shloultl not thethe order of 5 billion dollars per year to internlationial comlmunity promote and financealleviate the problem. We further noted that on a commensurate scale cost-effective foodabout 70% of the problem is concentrated in assistance programmes to eliminate the nutri-the poorest countries. Countries like India and tional hunger transcending national boundLaries?Bang..-desh already have a difficult time in

No I I S

1. 1), Gale Jolhnson, florld Food Probleins in Per- 2. Slliointi Reudtinrvr andMarcelo ScI,x ky, 1lfaInu*spective, Institute of Nutrition, University of North rrilion and J'twieriv. Ifagnit:iulc antd PolicY Opftons.Carolina, Occasional Papers, Vol. 1, No. 6 (May 1975). World Bank Staff Occasional PziprS,, N,. 23 (Johns

hTopkins. 1976).

Korea: Problems and Issues in a Rapidly Growoing Economy by Parvez^ Hasan, published byThe Johns Hopkins University Press, 1976

Lesothlo: A Developmnent Cliallenige by Willem Maane, distributed by The Johns HopkinsUniversity Press, 1975

Nigeria: Options for Long-Term Development by Wouter Tims and others, published byThe Johns Hopkins University Press, 1974

Papua New Guinea: Its Economic Situation and PAo5sperts for Development by GeorgeBaldwin and others, distributed by The Johns Hopkins University Press, 1978

The Philippines: Priorities and Prospects for Developmient by Russell Cheetham, EdwardHawkins, and others, distributed by The Johns Hopkins University Press, 1976

Turkey: Prospects and Problems of an Expanding Economy by Edmond Asfour and others,distributed by The Johns Hopkins University Press, 1975

Yugoslavia: Development with Decentralization by Vinod Dubey and others, published byThe Johns Hopkins University Press, 1975

World Bank Staff Occasional PapersA Model for Income Distribution, Employmient, and Growth: A Case Study of Indonesia by

Syamaprasad Gupta, published by The Johns Hopkins lUniversity Press, 1977Coffee, Tea, and Cocoa: Market Prospects and Development Lending by Shamsher Singh and

others, published by The Johns Hopkins University Press, 1977Malnuttrition and Poverty: Magnitude and Policy Options by Shlomo Reutlinger and.

Marcelo Selowsky, published by The Johns Hopkins University Press, 1976Economic Evaluation of Vocational Training Programs by Manuel Zymelman, published

by The Johns Hopkins University Press, 1976A DevelopmentModel for the Agricultur-al Sector of Portugal by Alvin C. Egbert and Hyung

M. Kim, published by The Johns Hopkins University Press, 1975

Other Publications

Agrariani Reform as Unzfiniish'ed Business: Thie Selected Papers of Wolf Ladejiinsky edited byLouis J. Walinsky, published by Oxford University Press, 1977

Twenty-five Years of Economic Development: 1950-1975 by David Morawetz, distributedby The Johns Hopkins University Press, 1977

World Tables 1976, published by The Johns Hopkins University Press, 1976The Tropics and Economnic Development: A Provocative Iniquiiry inito the Poverty of Nationsby

Andrew Kamarck, published by The Johns Hopkins University Press, 1976Size Distribuitioni of Income: A Compilation of Data by Shail Jain, distributed by The Johns

Hopkins University Press, 1975Redistribution with Growth by Hollis Chenery, Montek S. Ahluwalia, C. L. G. Bell, John

H. Duloy, and Richard Jolly, published by Oxford University Press, 1974

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No. 31. Constantino Lluch and Ross Williams, "Cross Country Demand and Savings Pat-terns: An Application of the Extended Linear Expeniditure System," TheReview of Econopnics; anid Statistics

No. 32. Marcelo Selowsky, "A Note on Preschool-Age Investment in Human Capital inDeveloping Countries," Econiomic Developinent and Cultutral Change

No. 33. Shankar Acharya, "Fiscal Financial Intervention, Factor Prices and Factor Propo-sitions: A Review of Tssues," Bangladesli Developmnent Stildies

No. 34. Shlomo Reutlinger, "A Simulation Model for Evalutating Worldwide BufferStocks of Wheat," Americani Jouirinal of Agrieiltitiral Econonnics

No. 35. John Simmons, "Retention of Cognitive Skills Acquired in Primary School," Coin-parative Eduication Review

No. 36. Montek S. Ablu.walia, "Inequality, Poverty, and Development," Journial of Devel-opinent Econonmics

No. 37. P. B. R. Hazell and P. L. Scandizzo, "Farmers' Expectationls, Risk Aversion, andMarket Equilibrium under Risk," A inerican Jourinal of Agricit Ifiral Economlics

No. 38. Graham Pyatt, "On the Interpretation and Disaggregation of Gini Coefficients,"The Economnic Journal

No. 39. Shamsher Singh, "The International Dialogue on Commodities," Resouirces Policy

No. 40. Gary Kutcher and P. L. Scandizzo, "A Partial Analysis of the Sharetenancy Rela-tionships of Northeast Brazil," Jouirinal of Developlmnent Eco0nomics

No. 41. Bela Balassa, "The Income Distributional Parameter in Project Appraisal," Eco-nornic Progrcss, Private Values anid Public Policiy (Nortl-Holland)

NoA42. Dipak Mazumdar, "The Rural-Urban Wage Gap, Migration, and the ShadowWage," Oxford Econon ic Paliers

No. 43. Dipak Mazumdar, "The Urban Informal Sector," 1,'orld Develoliniiti

No. 44. Carmel t!llman Ch,iswick, "OCi Estimating Earnings Functionis for LDCs,' Journalof Developmnent Econontnics

No, 4F, Clive Bell and Pinhlas Zusman, "A Bargaining Theoretic Approach to Cropslhar-ing Contracts," The Aninerican Economnic Review

No. 46. Kenji Takeuchi, Gerhard E, Thiebach, and Joseph Hilmy, "Investment Require-ments in the Non-fuel Mineral Sector in the Developing Countries," NaturalResouirces Foruimti

No. 47. Shlonio Reutlinger, "lMlalnutrition: A Poverty or a Food Problem?" World Deve7lop?-111ien I