Economic consequences of micro-nutrient status: Challenges

and opportunities for food fortification

John Hoddinott

International Food Policy Research Institute

Washington DC

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Introduction

• Micro-nutrient deficiencies are pervasive in the developing world. It is estimated that:

• 2 billion people suffer from iron deficiencies• 140 million pre-school children are deficient in Vitamin A• 17.6 million children are born annually with mental

impairments resulting from iodine deficiency

• Improving micro-nutrient status has intrinsic value:• Reductions in mortality, in morbidity and improvements in

health status that result from such improvements are “a good thing”.

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Introduction, cont’d

• Improving micro-nutrient status via fortification and other means also has instrumental value where :• Improvements in micro-nutrient status lead to

improvements in economic outcomes

• While the intrinsic motivation for improvements in micro-nutrient status are important, it is their instrumental value which are the focus of this presentation.

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The economic consequences of improved micro-nutrient status

• Improvements in micro-nutrient status conveys economic benefits through the following pathways:

• Improvements in certain forms of micro-nutrient status reduces infant mortality.

• This conveys economic benefits in terms of the resources that would otherwise be needed to avert infant deaths and/or the present discounted value of future incomes earned by this person

• Improvements in certain forms of micro-nutrient status reduces infant and pre-school morbidity.

• This conveys economic benefits where households no longer incur costs (time, money) associated with these illnesses

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The economic consequences of improved micro-nutrient status, cont’d

• Improvements in certain forms of micro-nutrient status assist in enhancing physical growth.

• This conveys economic benefits where increased stature in adulthood is causally linked to productivity.

• Improvements in certain forms of micro-nutrient status (iron) enhance physical productivity

• This conveys economic benefits where physical productivity is linked to micro-nutrient status

• Improvements in certain forms of micro-nutrient status (iodine, iron) can enhance cognitive development and learning.

• This conveys economic benefits where cognition and schooling are causally linked to productivity.

• Some of these benefits may be transmitted intergenerationally

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The economic consequences of improved micro-nutrient status, cont’d

• Assessing whether these potential benefits justify, on economic grounds, interventions to improve micro-nutrient status requires quantifying:• The benefits,• The costs, and• The distribution of these benefits

• None of this is straightforward. For example:• What is the value of a death averted? $500? $100,000?• How do you quantify reduced expenditures on treating

illnesses in environments where all medical services are publicly provided? Where few, if any, households seek medical treatment?

• How do you value future benefits derived from improvements in cognitive function when the returns to cognitive ability are highly uncertain?

• What is the appropriate discount rate?

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The economic consequences of improved micro-nutrient status, cont’d

• Mindful of these caveats, measures to improve micro-nutrient status – fortification, supplementation, and biofortification appear to have high benefit: cost ratios both in absolute terms and as compared with other investments that can be made to improve the well-being of poor people in developing countries

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Fortification: Snapshots of successes

• A key component of strategies to reduce micro-nutrient deficiencies is fortification.

• The last 10 years has seen significant advances in food fortification, particularly that of iodine. For example:• China, with an estimated 40 per cent of the world’s at-risk

population, reduced low iodine status in school children by 75 per cent

• Madagascar went from no iodated salt in 1992 to 98 per cent coverage by 1998

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Fortification: Four Challenges

• Measuring impact• Do we truly know what the baseline looks like; how much of a

difference are interventions really making

• Technical and regulatory• Fortification requires an appropriate mix of partnership and

regulation

• Political economy• Convincing Finance Ministers that they should worry about

micro-nutrients

• Distribution• Ensuring fortification is pro-poor

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Conclusions

• Efforts to redress deficiencies in micro-nutrients has both intrinsic and instrumental value

• Fortification has an important role to play in such efforts and has already shown some significant benefits

• Nevertheless, significant challenges remain