Why is eating healthy more expensive in LatAm and the Caribbean?

According to FAO, some 3.1 billion people can’t afford a healthy diet globally, reflecting the impact of higher consumer food prices during the pandemic and more frequent extreme weather events that are disrupting supply chains.

FAO, through the study ‘The State of Food Security and Nutrition in the World 2022’, estimated that the number of people who could not afford a healthy diet in 2020 increased by 112 million compared to 2019.

This increase is mainly explained by Asia, where 78 million more people could not afford to eat this type of diet in 2020, followed by Africa (25 million more), while Latin America and the Caribbean and North America and Europe accounted for 8 million and 1 million more people, respectively.

This study, made with input from researchers at Tufts University and the World Bank, revealed that Latin America and the Caribbean is the region where a healthy diet costs the most, at US$3.89 per person per day in 2020, followed by Asia (US$3.72), Africa (US$3.46), North America and Europe (US$3.19) and Oceania (US$3.07).

There are also significant disparities between countries regarding acquiring healthy food.

In Colombia, it costs about US$3 per person per day, while in Panama, it costs US$4.47, and in Jamaica, it costs more than US$6 per day.

WHY IS IT MORE EXPENSIVE TO EAT HEALTHILY?

According to the analysis, high-income and upper-middle-income countries primarily support agricultural producers through customs measures and tax subsidies that are increasingly decoupled from production.

In contrast, in middle-income and lower-income countries, the fiscal scope for subsidies is more limited; moreover, these countries tend to use trade policies to protect consumers rather than producers.

Generally, support for agricultural production mainly concentrates on staple foods, dairy, and other protein-rich products, especially in upper-income and upper-middle-income countries.

Rice, sugar, and meats of various types are the most incentivized foods globally, while fruit and vegetable producers receive less support or are even penalized in some low-income countries.

According to the study, trade and market interventions can act as barriers to marketing nutritious foods, undermining the availability and affordability of healthy diets.

In many countries, tax subsidies have increased the availability of staple foods and their derivatives and reduced prices, discouraging and making it relatively more expensive to consume less subsidized or unsubsidized foods such as fruits, vegetables, and legumes.

MORE SUPPORT FOR AGRICULTURE

In low-income countries and some lower-middle-income countries where agriculture is essential to economic activity, employment, and livelihoods, governments should collectively increase spending on services that support food and agriculture and prioritize it.

“This is crucial to address productivity gaps in nutritious food production and enable income generation to improve the affordability of healthy diets, although it will require significant development financing,” FAO said.

A key challenge for policymakers in low-income countries will not only be to reach agreements on tailoring food and agricultural support to achieve various inclusive agricultural transformation targets that are fully aligned with reducing the costs of nutritious food.

Given their low budgets, governments in these countries will also need to mobilize significant funding to accelerate the provision of general service-related support, which must be prioritized to address productivity gaps in nutritious food production effectively.

With information from Bloomberg