How trade policies starve healthy diets

Published: October 2, 2019 2:08:07 AM

It is important to step away from the reactive and interventionist domestic and international trade policies aimed at alleviating short-term price fluctuations.

This lack of diet diversity and consumption of unhealthy calories is a compelling enough reason to back a concerted move towards getting the Indian diets right.

By Devesh Roy & Manika Sharma

A recent Lancet study regards dietary factors to be amongst the biggest risk factors for death and disability in India. Healthier, safer and more nutritious diets are keys to fighting high levels of under-nutrition and rising levels of obesity in India.

What characterises Indian diets? Indian diets are typically low on proteins—both animal and plant-based—fruits and vegetables; 57% of the total calorie intake in rural and 48% in urban areas comes from cereals. This is combined with high consumption of unhealthy fats and processed food; the trend cuts across income levels and the rural-urban divide. Indian diets fall short of the recommendations made by the EAT Lancet Commission for healthy and sustainable diets as well as the benchmarks set by National Institute of Nutrition (NIN). Between 1993-94 and 2011-12, the only significant change in the percentage share of calories has been for cereals (decrease by 10%) and oils and fats (increase by 3.5%).

There has been almost no change in the share of pulses, nuts, vegetables, fruits, meat, eggs and fish in consumption, despite rising income levels, urbanisation and lifestyle changes. This lack of diet diversity and consumption of unhealthy calories is a compelling enough reason to back a concerted move towards getting the Indian diets right.

Getting the diets right is incumbent upon getting the markets right. This requires looking at diets in the broader context of a food system. The availability and affordability of, and access to, healthier diets depends on more than just choices made by individuals and families. It depends on the food that is being produced, processed and marketed for consumption, which, in turn, is sensitive to multiple systemic drivers. While agriculture, health, education, social welfare, women empowerment, energy, water, and environmental policies are recognised as the key levers in the food system, one node that is critical but less emphasised upon, is trade and other macroeconomic policies (taxation, industrial, etc). For instance, a major change like the GST is certain to leave system-wide foot prints. Trade influences the four pillars of food security—availability, accessibility, stable supply and utilisation. Beyond food security, these can be leveraged for nutrition security as well.

Both domestic and international trade policies have been used for controlling rise in prices of food stuff for which there is little political appetite for a price-rise—cereals, sugar, pulses and vegetables (particularly onion). With trade policies, the incentive effects in production and consumption often get overlooked. An example of the trade policy-diets connect is the liberalisation of edible oil imports in 1992, when it was taken off the negative list. Almost immediately, the cheapest edible oil, i.e., palm oil from Indonesia and Malaysia, became the main item consumed with drastic reduction in prices and increased presence in household consumption, processed food and restaurants. On the production side, this “cheapest” oil only further depressed production of oilseeds by Indian farmers.

Analysis of NSSO consumption data shows vanaspati, with the maximum share in total fat intake, reaching 50% of total intake in both rural and urban areas by 2009. Palm or palmolein oil are the main ingredients of vanaspati; these are high in trans fats, consumption of which is associated with the risk of cardio-vascular diseases. Other oils also blend palm oil to keep their prices competitive. World Health Organization now recommends elimination of industrially produced trans-fat from global food supply, and the Food Safety and Standards Authority of India in 2018 has committed to reducing trans-fatty acids to less than 2% by 2022.

Domestic trade policies reinforce or offset the effects of international trade policies. Domestic food markets are characterised by unhealthy food crowding out healthy, nutritious food because of both demand- and supply-side factors. In this outcome, policies have a large part to play, ranging from cereal-centric price support, unregulated promotion of food processing and marketing regulations. Only recently some states have started delisting fruits and vegetables from the APMC; e-NAM does not seem to have taken off for perishables at all. In addition, the incentives for cold-chains have not been large enough to make any sizeable difference to availability of perishables.

Finally, a big part of the food system in India and domestic trade comprises public programmes like the public distribution system (PDS) of cereals, mainly wheat and rice with, state-specific additions like coarse cereals or pulses in the portfolio. Improved access to grains for the poor was expected to reduce malnutrition by improving food security, but most surveys do not indicate adequate reduction in childhood undernutrition, anaemia and adult undernutrition. Policies need to be cognisant of the general equilibrium impact. Dumping subsidised cereals in markets has a huge bearing on the food system. If Bihar is self-sufficient in rice, dumping of additional 2-3 million tonnes due to National Food Security Act post 2013 is a fundamental impact shifter, affecting cropping choices and consumption decisions. Indeed, while subsidised cereals should have released money to buy fruits and vegetables and animal-source foods, the net effect from the perspective of healthier diets remains unclear.

It is important to step away from the reactive, and interventionist domestic and international trade policies aimed at alleviating short-term price fluctuations, and look at long-term impact on the food environment. The food system needs to invigorate the producers, consumers and other stakeholders to choose and provide healthier diets. Awareness campaigns can bear fruit only if accompanied by a conducive food environment.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.