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Can trade policies have co-benefits for nutrition?


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Can trade policies have co-benefits for nutrition? The findings of an expert consultation on trade and
nutrition, by Josef Schmidhuber, Deputy Director, Trade and Markets Division, FAO.

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Can trade policies have co-benefits for nutrition?

  1. 1. A. Healthy Diets: Growing consensus, but open issues 1. Positive/protective: fruits, vegetables, legumes, nuts, whole grains, fibre, PUFAs, n-3 (seafood) 2. Harmful: trans-fats, processed meat, (unprocessed) red meat, sugar- sweetened beverages 3. Within limits, threshold: saturated fats 4. J-shape/U-shape/linear: sodium 5. Diet as a risk factor for obesity (quantity) is different from direct effects of diet as a risk factor for disease (quality). 6. Open and emerging issues towards better diets: – Nutrient replacement (PUFA for SATFAT), food replacement (legumes for red meat) – Are foods more than nutrients? (e.g. n-3 source) – Are diets more than foods and nutrients (food environment, sustainability)? – Healthy diets: not only physical health but also for mental health and environmental sustainability.
  2. 2. B. Dietary trends 1. More calories. 2. More animal products. 3. More processed and ultra-processed foods. 4. More sugar, saturated fats, and salt. 5. More F&V, but slow growth and often insufficient levels. 6. Energy-adjusted: no clear pattern across countries for most nutrients. 7. Higher BMIs, growing NCD pressure, but lower NCD burden (improved medical care) 8. Growing resource constraints for food production (CC, water, land), particularly where diets are still of poor quality (low latitude areas) 9. Growing role of trade to compensate local deficits, stabilize prices and supplies, increase choice and provide off-season availability.
  3. 3. C. Drivers of change in diets 1. Urbanization – Better marketing and transportation infrastructure, cold chains and supermarkets – Higher costs for labour, convenience and fast food, UPFs – Lower physical activity, lower calorie expenditures 2. Higher incomes, changes in relative prices & preferences – More animal products – More out-of-home consumption, restaurants, canteens, street food – More food waste 3. Globalization, trade liberalization, TNCs, FDI – Choice, prices, availability – Lifestyles
  4. 4. D. The role of trade 1. Affordability, access • Often lower prices of imported goods. • Trade can boost incomes, access 2. Availability • More produce, but not always healthier foods. • Exports can reduce availability in poor environments. • Wider Choice, more off-season availability 3. Utilization • Trade: Food safety standards, border controls, inspection and monitoring • Potentially adverse effects (“fatty turkey tails”) 4. Stability • Stability of supplies (weather, climate) • Stability of prices • Stable quality
  5. 5. E. The role of policies 1. Primary production/agriculture • Prices: Low vertical price transmission/elasticities • Other: interventions thru clean water, AMRs, R&D, factor costs 2. Processors • Food additives, fortification options • Ultra-processing (tax salt, sugar, fat) 3. Final consumer • Food taxes: Inelastic demand, high revenues, low effectiveness, Need for healthy substitutes • Nudging: – low taxes work with high substitutability + healthy substitutes – Patronizing consumers? • Subsidies: possible, but expensive, healthy food focus needed 4. Distribution, marketing • Advertisements, positive and negative ads, bans • Labelling, traffic lights
  6. 6. E. The role of policies (cont.) 5. Trade policies, trade barriers • Food safety, scientifically supported • Non-safety concerns: Tariff changes only within bound rates, or on scientific basis (“fatty turkey tails”) • Exports and export subsidies: danger of lasting changes in consumption patterns abroad (West Africa, NENA) • Trade needs infrastructure: investments in infrastructure to boost food and nutrient availability. Country experience: Russia, Ethiopia
  7. 7. F. Trade and ag policies for nutrition goals? 1. Rich countries: Traditional ag policies are taxes on consumers (CAP, US), but ineffective for nutrition goals: • Low vertical price transmission • Low price elasticities of final demand 2. Poor countries: Traditional ag policies are subsidies for consumers (taxes on ag) – High income inequalities (high GINI coefficients) – Rising triple burden of malnutrition – Uniform taxes to be regressive on poor (food insecure) consumers, ineffective on rich (overweight) consumers 3. Trade and ag policies for trade and ag goals, not for nutrition.
  8. 8. Key message Nutritional goals require specific, specialized and targeted policies; trade and agricultural policies are ineffective and inefficient instruments to pursue nutritional goals! But: Seek options to reap co-benefits for nutrition, at least where possible w/o compromising trade/agricultural policy goals.