Role of Agricultural Policies:

Re-orienting the Supply Side for

Better Nutrition Outcome

Madhur Gautam
Lead Economist
Agriculture Global Practice
The World Bank
 Agriculture has performed extremely well
Agricultural GDP in Bangladesh:
Trend growth rate and growth volatility
6.00

years, percent); standard deviation

• Combination of policy

Trend growth rate (previous 10

5.00
reforms, technological

of annual growth rate

progress; investments 4.00

in infrastructure and 3.00

human capital
• Main contributor to 2.00

poverty reduction 1.00

(2005-2010) 0.00

Agriculture GDP Ag. GDP Volatility

 Notable achievement: Food Security

• Past focus
primarily on
rice-security
• Overarching
public policy
objective

Source: Updated from Hossain et al, 2009, in Gautam and Faruqee, 2016.
 Production structure highly concentrated in rice

• Focus on
foodgrain
production
successful
• Consequence is
rice dominates
production
structure and
crop growth

Source: FAOSTAT. Source: BBS data

 Current consumption patterns: far from optimal

• At national level, 40
Consumption as Percent of…
calorie per capita 20
(2318 Kcal.) exceeds
min. requirement 0

(2122 Kcal.)
-20
• Despite remarkable
progress, -40

malnutrition rates
-60
remain high
• Emerging concern: -80
Insufficient dietary
Source: Zakir Hussain, Talukder and Ahmed,2015
diversity
 Looking forward, demand will change more rapidly:
Supply response needed to meet food demand (2016-21)
Milk
Meat and eggs
Fish
Sugar
Fruits
Oils
Pulses
Wheat
Spices
Potato
Other vegetables
Rice
0 2 4 6 8
Source: based on Hossain and Deb, 2011
 Do agriculture policies matter for nutrition?

• Multi-sectoral problem, within which role of agriculture is widely noted

• Strong intuitive and conceptual arguments, but…
• Robust evidence on impact is hard to find (noted by prominent recent papers)
• Food sector policies specifically highlighted by the Global Panel on Agriculture and
Food Systems for Nutrition (November 2014)
• Panel also notes evidence linking policy choices to nutritional outcomes is “weak”
• Challenge: lack of data to link the pieces of the puzzle (agriculture, diets, and
nutrition)
• Importantly, need full set of controls to attribute impact (eg, sanitation, hygiene,
incomes, wealth, women’s empowerment, etc.)
Results from three complementary perspectives: try to understand
the “how” and “what if” of policies’ impact

1. Agricultural policies ultimately alter relative prices of different foods. The key
question is: How do prices changes influence consumer choice across foods
groups (as a proxy for nutrients)?
2. How do farmers’ production choices (diversification) influence dietary diversity and
eventually nutrition outcome indicators (for adults and children)?
3. What if the focus of development strategy shifts towards diversification or income
growth? Food security is a hard won battle, and a significant share of population,
especially women, remain under-nourished (Osmani et al 2017)? What are the
tradeoffs to alternative development strategies?
 Data and approach
• A unique (and new then) nationally representative rural household survey - Bangladesh
Integrated Household Survey (BIHS), collected by IFPRI in 2011-12 (IFPRI 2014).
• Wide-ranging survey covering agricultural production, household consumption,
anthropometric measures, non-agricultural sources of income, infrastructure, household
demographics, etc.
• Demand elasticities estimated econometrically using an Almost Ideal Demand System
• Production and consumption diversity relationship and the nutritional outcome linkages
estimated simultaneously to account for potential endogeneity. Child malnutrition model as
binary dependent variables.
• Simulations conducted on a dynamic (recursive) Dynamic Computable General Equilibrium
model for Bangladesh, using the latest available SAM (2007 at the time) with significant
sectoral disaggregation to allow needed simulations. The microsimulations to assess
household impacts used latest HIES data.
Share of food expenditures by food group and income
quintile, 2011-12 (BIHS)
20 50
Cereals
18 45
16 40 Pulses and cooking oil
14 35
Vegetables and fruits
12 30
10 25 Milk and meat
8 20
6 15 Fish

4 10 Spice and beverage

2 5
0 0 Sugar and other
First Second Third Fourth Fifth
Expenditures shares mask the dominance of rice
100%

80%

60%

40%

20%

0%
Farm HH Non-farm HH Farm HH Non-farm HH
Calories Proteins
Rice Other Cers Pulses Cookingoil Milk Meat Fish
Vegetables Fruits Spices Sugar Beverages Other food
 Q1: impact of prices: Poor affected more by price rise
Own and cross-price (compensated) elasticities by income quintile

Own price elasticities Cross-price elasticities (on cereals)

0.0 0.5
-0.1 First Second Third Fourth Fifth
Food groups:
0.4
• Cereals -0.2
• Proteins -0.3
0.3
• F&V -0.4
-0.5
• Cooking oil 0.2
-0.6
• Spices 0.1
-0.7
• Others
-0.8
0
-0.9 First Second Third Fourth Fifth
Cereals Proteins F&V Proteins F&V Others
Q2: Agriculture-nutrition pathway: Factors included
Economic: total expenditures per capita (proxy for income), food expenditures per
capita, wealth (all assets owned), domestic and foreign remittances, share of
non-farm income
Farm: diversification, ownership of fish pond, milk animals, other animals
Homegardens: for vegetables, for spices, for fruits
Prices: rice and other food price indices
Infrastructure: distances to public health facility and markets
Empowerment: whether spouse works outside home
Sanitation: type of toilets - improved, community, none
WASH indicator: for knowledge of importance of washing hands
Education level: literacy, primary, secondary, tertiary for both head and spouse
Demographic: household size, religion, ethnicity, language, age (head), marital status
Linking production to nutrition via dietary diversity
Determinants of Dietary diversity

• Strong impact of farm diversification

• Non-linear but low threshold. Those below already diversified out of rice
• Significant positive impact of wealth, income and remittances
• Food expenditures matter, over and above total expenditures
• Strong price effects: higher rice prices promote while other food
prices reduce DD (magnitude of latter much larger)
• Fish ponds improve DD, but livestock (milk or other) are insignificant
• Among demographic, of note: literacy improves DD but other levels
(except spouse secondary level) are insignificant
Determinants of Adult BMI (household head and spouse)

• Strong & significant impact of DD on HH BMI, but not Spouse BMI

• Total calories per capita insignificant for HH but have strong positive
effect on Spouse BMI: women still remain undernourished
• Strong and significant positive impact of improved toilets on both
• Education (all levels) have very strong impact on Spouse BMI, not HH
• For HH, literacy has positive impacts but higher levels do not.
• Women working outside has a strong positive impact on Spouse BMI
(negative on HH head)
Determinants of child nutrition outcomes
stunting, wasting and underweight

Adult BMI’s: both have significant negative impacts on all 3 outcomes

Diet diversity: insignificant direct impact
WASH: strong negative impact on stunting
Improved toilets: strong negative impacts on all three, significant for S, U
Community toilets: large positive impacts on all three but insignificant
Incomes (total expenditure): strong negative impacts (all 3)
Literacy: mother for wasting, father for underweight
Education: mother’s secondary for stunting
 Q3: Prospects for food & nutrition security with growth:
Simulation results for alternative strategies
Sector vs balanced strategy Impact on food consumption growth
• Simulate 16.0
(real GDP elasticity)
0.9 1.30
BAU+3% TFP
14.0 1.28
• Single sector
1.26
assumes BAU 12.0
1.24
for others. 10.0
1.22
• All: uniform 8.0
1.20
13.8
shock to all, incl. 6.0 12.7 12.5
11.7 11.9
1.18
ag. subsectors 4.0 8.9
1.16
• Green: shock to 2.0 1.14
2.8
indiv. sub- 2.1
1.12
0.0
sectors+non-ag Agriculture Manuf. & Services All Rice Non-Rice Livestock Fisheries
1.10
Mining Crops
sectors Non-Agricultural + Focused Ag. Strategy
Business as Agriculture
usual
Rice Non-ag. Rice and
non-ag.
Balanced
 Balanced strategy with agriculture diversification better
for nutrition outcomes
55 Non-Agriculture Only Agriculture Only Rice & Non-Agriculture Balanced
50
45
40
35
30
25
20
15
10
5
0
Potatoes Vegetables Pulses Fruit Other Crops Livestock Poultry Fish Milled Rice Milled Grain Proc. Food Average
 Thank you.

Gautam, M. and R. Faruqee. 2016. “Dynamics of Rural Growth in Bangladesh:

Sustaining Poverty Reduction”
https://openknowledge.worldbank.org/handle/10986/24544