Policies that subsidize Food Consumption Text extracted from The World Food Problem Leathers and Foster,

Food Subsidies Popularity of subsidies: –Donor countries with burdensome surpluses –Donors directly feed famine victims –Exporters Farmers Food distributors Input suppliers Shippers –Developing countries Military Industry Politicians Removal of food subsidies –Can result in riots

Marketwide food subsidies Egypt –lowered the cost of food for everyone –Bread, flour, pulses, sugar, tea, cooking oil –kept undernutrition to minimum –Inefficiency Waste –Bread used for livestock feed Lower industry investment –Government money used to import food Overconsumption of wheat –Government paid higher price than consumers would have Up to 17% of Government budget used for subsidies

Subsidies for the needy Income targeting –Sri Lanka restricted rice subsidies to low income households Half of households qualified Self-targeting –Subsidies on food with low demand Cassava, yams, maize, sorghum, millet Sri Lanka market

Subsidies for the needy Supplemental Feeding –Direct distribution to pregnant women, infants Positive results –Severely malnourished benefit most –Must be combined with health care Problems –Food shared with non- target family members –Nutritional timing important for pregnancy, preschoolers

Subsidies for the Needy Ration Cards –Allow purchase of food at below market price Food Stamps –Pay market price for food –Must buy food stamps price varies with income Food for Work –Often work to improve agricultural infrastructure Food for work project, North Korea y/Activities/Food/FoodAgriculture.asp

Food Aid Important in famine relief –Best if purchased in country Problems with giving food: –Shipping costs high 89% value of the food –Medical care more critical –Not self-sustaining –Food sometimes used as cash Children don’t benefit –Depresses farm prices in country Disincentive to agriculture Food aid for Indonesia Earthquake victims,