The poor in developing countries will cope with rising food prices in two primary ways: (1) by reducing the amount of expensive meats, dairy, fruit, vegetables, and pulses (non-staple food) consumed, resulting in large declines in mineral and vitamin intakes — with significant negative consequences for morbidity, mortality, cognitive abilities, and growth (preschool children and females of reproductive age, in particular, are at risk for these deficiencies and so will suffer the most from food price increases); (2) by reducing expenditures on non-food items, such as education, housing, and medical care.
Four basic factors drive the first conclusion:
- Expenditures on non-staple foods by poor consumers comprise 40-60% of total expenditures for food.
- Demand for food staples (rice, wheat, maize, etc. depending on the geographical region and culture) is highly inelastic. Income and price elasticities for food staples in the aggregate are low.
- In diets, minerals and vitamins are concentrated in non-staple foods; energy is concentrated in staple foods.
- Current intakes of vitamins and minerals are already too low, resulting in high prevalence rates of micronutrient deficiencies. Modest decreases in present intakes of minerals and vitamins will drive these prevalence rates significantly higher, with severe consequences for the nutritional status of the poor and public health.
Given these food consumption and nutrient intake patterns described in 1-4 above, the following empirical estimates can be drawn:
- A 50% increases in all food prices across the board (holding income constant) will result in a 30% decline in iron intake; this, in turn, will result in an increase in the prevalence rate of iron deficiency among women and children of 25% percentage points (e.g. if currently the diets of women result in 60% consuming below the mean average iron requirement, then 85% will consume below the mean average iron requirement after the 50% price rise).
For more information see HarvestPlus Statement on Rising Food Prices (478K).