Trade and Nutritional Outcomes in the Pacific

On duty travel in Samoa in the last couple of weeks I was given a set of papers about trade and nutrition in the Pacific, by a most helpful lady named Christine Quested in the Ministry of Health in Samoa, who co-wrote them. Most of the papers, having analysed the trade and nutrition situation in the Pacific, finish by recommending aligning trade policy with health and by advocating for putting health on the trade policy agenda in the Pacific. This links then to the points I made in a previous post on what then a good nutrition tariff might look like.

In this post I want to cover the following:

• Evidence that trade liberalization probably impacts on diet

• Other links between trade and nutrition in the Pacific region

• Policy implications for food-related trade policy

In a 2011 paper looking at trade and nutrition in Fiji and Samoa, Thow et al outline a fairly compelling pattern in the domestic availability of food. To simplify, the pattern can broadly be described as trade liberalization leading to increased availability – and by implication, consumption – of unhealthy, imported food.

They recognize that their methodology cannot assign causality from trade liberalization to trade increase to diet, and I would posit that the process of economic development itself, including rising incomes, urbanization, marketisation of the economy and so forth, would be a driver behind increased trade and changed diet independently of trade barriers.

However, a look at the graphs below reveals a repeating pattern that suggests that liberalization does contribute to increased imports and thus increased consumption of imported food. The first appears to show a direct link between policies such as export promotion (through production for export crowding out production of traditional crops for domestic production) and import substitution, and calories per capita of imported cereals and local starchy roots.  The second and third show that reduction of tariffs and liberalization in Fiji and Samoa were followed by big increases in imports of fats and oils.  The fourth graph shows that consumption of confectionary and pastry in Fiji and Samoa rose sharply following liberalization.

 

In a separate 2010 book chapter, Thow et al. posit that there have historically been six pathways through which trade has influenced diet, which I summarise below. I think only a few of them continue to be driven by trade POLICY, but they are worth noting.

1. The continuing transition to a cash economy, driven by trade – after all, the domestic economy was originally subsistence and barter-driven and cash would only originally have been necessary for the purchase of imported goods. The rise of the cash economy would have implications for nutrition through the ability to buy a wider variety of foods; however those foods would have been of a poor nutritional quality. Thow et al point to a number of very interesting historical examples – for instance during the Japanese occupation in the Marshall Islands, increasing exports of copra enabled the consumption of store-bought foods to increase dramatically, but this was accompanied by the presence of beri-beri (thiamine deficiency). In the subsequent American occupation, the low consumption of purchased food reflected the more limited opportunity to purchase imports. The same pattern occurred in Tahiti in the 1960s with the expansion of copra fuelling sudden increased consumption of imported foods.

2. Urbanisation – the growth of trade historically required administrative centres. Urban residents tend to consume a less traditional diet, both due to greater access to imports and –according to two studies cited by Thow et al (2010), through a ‘demonstration effect’ of the diets of expatriates.

3. Promotion of the production of exports and import-substitution, trade-related policies which change diet through:

• the greater availability of cash for food imports;

• encroachment on the land and labour needed for domestic production of traditional foods – and thus lowering of production of domestic foods;

• support for import-substituting meat, and lack of government support for traditional domestic food production

4. Low price and availability of food imports.  Currency devaluations in Papua New Guinea led to significant increases in consumption of local food, of course through making imported food more expensive relative to local staples. This and other examples cited demonstrate that demand for imported food is sensitive to price.

5. Financial integration and investment – many countries in the Pacific region have since the mid-1980s, made efforts to simplify their licensing and other investment-related procedures as well as to attract investment through tax reform. This has helped lead to an increased presence of international corporations selling marketable imported food – for instance, fast food outlets – and highly effective marketing of “commerciogenic” imported foods.

6. Donors, aid and trade – the high level of aid has enabled Pacific Island countries to plug the considerable gap between their export revenues and import spending, and has thus cushioned the incentive to consume domestic food instead of imported food. Another point is that donor aid objectives have not always been supported by their actions on trade. To quote directly from Thow et al’s book chapter: “the political and commercial considerations arising from the dependence of Pacific Island countries on aid may also limit their ability and desire to restrict food imports on health grounds (Foliaki and Pearce 2003). For example, New Zealand is a major donor to the Pacific region, as well as a major source of food imports; during the aftermath of Fiji’s ban on mutton flap imports, New Zealand threatened to take action through the WTO despite health being one of their aid and development priorities (Kelsey 2004).” Moreover food aid to Micronesia by the United States in the 1960s and 1970s was imported and helped lead to dependence of FSM populations on rice as a staple food.

Possible implications for policy from Thow et al (2010) – book chapter, Thow et al (2011) and Thow et al (2010) food policy paper are:

• Modify trade liberalization so that it allows for national control over trade policy measures, and allows for the promotion of domestic production in Pacific Island countries.

• Structure a country’s tariff schedule based on healthfulness of foods (see my post on the economics of nutrition for more on this). Do this in a way that is compatible with World Trade Organisation agreements – for instance quantitative bans are not permitted but increases in tariffs within certain bounds are, and trade-offs can be made by increasing tariffs on certain unhealthy foods and decreasing tariffs on other, healthy foods.

• Investment in rural infrastructure development and increased government support for domestic production, and better balance between export promotion through subsidies and so forth, and support for domestic production;

• I would add to this that it is important, when setting tariffs, for instance on the import of vegetables that may also be produced in the relevant Pacific Island country, to consider and if necessary, to mitigate the economic impact on domestic farmers who may produce the same good.

• Enforcement of food standards and labeling to enable consumers to make more educated choices.

• Some way to curtail marketing of imported foods of poor nutritional quality.

• Effective advocacy with more than one influential champion, active involvement of policy implementers and taking advantage of windows of opportunity, are critical to getting food-related trade policies on the agenda. Policy uptake was in three case studies of specific food bans in Samoa, Fiji and Tonga, aided by “the use of existing legislation, consideration of other government commitments (e.g. WTO) and establishing a clear justification for food targeted.”

• Barriers to policy success are likely to be the selection of an inappropriate legislative tool, the lack of a clear enforcement mechanism and low engagement from sectors other than health.

Citations:

Thow, AM & Snowdon, W. 2010. ‘The Effect of Trade and Trade Policy on Diet and Health in the Pacific Islands’, in Blouin, C. Drager, N. Dube, L. Hawkes, C. Henson, S (eds.) Trade, Food, Diet and Health: Perspectives and Policy Options. 2009, Wiley-Blackwell Publishers, London.

Thow, Anne Marie , Heywood, Peter , Schultz, Jimaima , Quested, Christine , Jan, Stephen and Colagiuri, Stephen(2011) ‘Trade and the Nutrition Transition: Strengthening Policy for Health in the Pacific’, Ecology of Food and Nutrition, 50: 1, 18 — 42

Thow, Anne Marie, Swinburn, Boyd, Colagiuri, Stephen,  Diligolevu, Mere,  Quested, Christine, Vivili, Paula Leeder, Stephen, 2010. ‘Trade and food policy: Case studies from three Pacific Island countries’, Food Policy 35 (2010) 556–564

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2 responses to “Trade and Nutritional Outcomes in the Pacific

  1. Thank you for this very interesting blog!. Recent work by UCSF (Lustig, R. et al) published in Nature points to fructose as a major culprit and soft drinks and processed food (including baby formula) loaded with High Fructose Corn Syrup in particular. Do you have data on soft drink consumption in the PICTs? and on High Fructose Corns Syrup content of processed food in the PICTs? I am interested by any work on this.
    Thanks again. Ferdinand Strobel (UNDP Pacific Centre)

    • jonathantsbower

      Bula Ferdinand,

      I would guess that you would want just a ready-made table. Unfortunately I don’t have it…but that doesn’t mean it doesn’t exist or can’t be estimated. Some ideas are below.

      Household Income and Expenditure Survey data is the source that comes most readily to mind. You could estimate soft drink consumption per capita by taking the value of the total population’s household consumption of soft drinks (or any disaggregation available, dividing by average price per litre, to get number of litres, and then divide by national population to get litres consumed per capita. It’s possible but it’s work, and it’s based on the assumption we have our average price per litre right. Perhaps the value for price could be gained from domestic market survey data.

      Another possible source for data on value and possibly quantity of soft drinks may be import data, but this won’t always give a full picture as there is a Coca Cola plant in Fiji for instance which makes coke in-country, and that won’t be the only example. However imports of soft drinks per capita has the advantage of being annual data, and is itself significant.

      Greg Keeble is or was the M&E officer for the SPC’s Healthy Pacific Lifestyle program, and might know about data or papers or analysis on soft drink consumption that have been done. I’m not sure if he’s still in post or not, but if you want to pursue this, the SPC Healthy Pacific Lifestyle program may know more. I don’t know their team because they are based in Noumea and I am Suva-based, but this is the team’s web site. http://www.spc.int/hpl/index.php?option=com_content&task=blogcategory&id=24&Itemid=50 and Greg’s email is (or was, i’m not sure) gregk [at] spc.int

      Finally, a google or a look through any papers or bibliographies of papers listed in the article for any leads.

      Jonathan

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