Sarah Doctor
There is a popular myth that poverty means hunger, or, if you are hungry means you have to be poor. It is a notion that plagues the Western World. In June 2009, The Food and Agricultural Organization declared that a billion people all around the world were hungry.
The UN MDG – United Nations Millennium Development Goal was also to “reduce hunger and poverty”. Poverty lines all across the world are set on the basis of how many people are actually hungry. The government policies regarding poverty are centred on the assumption that the poor urgently need food. The reasons why the Governments insist on such policy is not because hunger and poverty go hand in hand; but because the poor are incapable of feeding themselves.
We will now analyse the existence of a nutrition based poverty trap using the example of a Indonesian Man – Pak Solhin. He was a casual worker who earned $2 a day. There was a hike of prices of fertilizers which forced the farmers to become more economical. Therefore the farmers did not cut wages, but they cut down on their employees. Pak was too weak to be employed at a construction firm, and found himself to be unemployed. He attributed his problems to the lack of food; although he was willing to work, his lack of food made him tired and lethargic. This is essentially the idea of a nutrition based poverty trap. The logic behind this is very simple. Every human requires a certain number of calories to survive. But if someone is very poor, they can barely afford their day-to-day necessities, and additional costs of living leave alone the food they can afford. The richer a person is, the more food he can buy. After all the basic metabolic needs of the body are handled, the nutrition goes into building extra strength which is needed to be more productive.
This biological mechanism creates an S- shaped relationship between Income today and income tomorrow. The poor become poorer, and the rich become richer, essentially creating a poverty trap. The poor become less healthy therefore less productive. The rich become stronger, and the gap goes on increasing. The other mechanism is an inverted L shaped curve which shows no poverty trap. This is due to the fact that the poorest of people earn more income than they started out with. Their income may not be very high, but the point is there is very little we can do that can help the poor.
Let us go back to the statement we made at the start of this report. Are there really one billion hungry people? There is a hidden assumption in our poverty trap saying that the poor can eat as much as they can. The poor do not spend every extra cent they earn on buying more food, but they spend it on buying more luxuries and superior goods. Therefore an increase in income will not necessarily mean they will spend it on buying more food, but they will use it to switch over from inferior goods to superior goods. Keeping that aside, the money that people spend on food is not used to maximize the nutrition and calorie intake that can be bought with that certain amount of money. If they get a little more money, they spend it on more expensive and better tasting food. For example: When wages rose in Maharashtra, 50% of it went into purchasing more calories, and the other 50% went into purchasing more expensive calories. The nutrition levels in India are also very puzzling. According to the media, obesity and diabetes are on the rise. But according to studies, the per capita calorie consumption is falling. Indians are now eating less and less. In spite of rapid economic growth, there has been a fall in nutrition levels across India. At all levels of income, the share of the budget given for food has fallen. Moreover, the composition of the food basket has changed. People are spending the same amount of money, for less, more expensive food.
This phenomena is not driven by declining incomes, because incomes all over India are on the rise, neither is it driven by rising food prices; because when the prices fell so did the calorie consumption. This was probably due to an increase in real income when the food prices fell.
So who are the FAO really calling hungry? The people who genuinely cannot afford food, or, the people who can afford the food but choose to spend their money somewhere else. People do not want to eat more even if they can. Under the assumption that the poor know what they are doing, and they had a chance to be more productive and that food leads to productivity, it raises a question : Does a nutrition based poverty trap really exist?
We live in a world that is well capable of feeding every person. The reason starvation exists is because there is concentration of food in certain places. The percentage of people who believe they do not have enough food has fallen from 17% to 2%. So, perhaps people eat less because they are less hungry.
Are the poor really eating well, and eating enough? The poorest people in India have a small build which is why they do not require much calories. But the question that arises is why
Are the poor people so small? The best way to measure this is BMI. According to the BMI 34.5% of all Indians are undernourished. Therefore we can attribute their build to the fact that they do not eat enough. This poses the next question:
Why do the poor eat so little? The poor probably don’t understand the importance of nutrition is a person’s diet. They also are heavily influenced by price changes and the effect of the price change on the demand of the food, example: rice. They also prioritize things like weddings, dowry and festivals more than they prioritize food.
The Economic Impact:
The nutrition based poverty trap is highly debatable. Ultimately the nutrition levels in a person are governed by his/her personal decisions, but only to a certain extent. The income of a person also plays a very important role in this decision making process.
The Government policies in African and Asian countries who face the problem of poverty can be altered to make sure that hunger does not accompany poverty. Once the true cause of hunger surfaces, poverty can be eliminated in certain parts of society.
Economies should focus on producing food with higher nutrition content which will therefore stimulate people to work more, thereby improving the productivity and GDP of the nation. If people have access to nutritious food they will also be able to work harder.
Nutritious food should also be priced adequately. For example: In countries like Japan, nutritious and organic food is very expensive. This puts it out of the reach of the poor people. If strategic pricing decisions are taken, people will be more economical and they will devote their resources into buying more nutritious food.
The poor should also be made aware of the impacts of consuming food with a higher nutrition level, and be given subsidies to purchase the same. Ignorance of optimum allocation of income should be removed by education the poor on how to allocate their resources optimally in order to gain better health and wealth.