Economics, Nutrition Related, Says FAO

September 14, 2001

Economic growth can be influenced positively by improved nutrition, the UN Food and Agriculture Organization (FAO) says in its annual report, The State of Food and Agriculture 2001 (SOFA 2001). "The impact of nutrition on labor productivity, health and education ultimately filters through to higher levels of overall economic growth."

Raising the per capita calorie intake to 2,770 calories per day in countries where it is below that level could increase the per capita GDP (gross domestic product) growth in those countries by between 0.34 and 1.48 percentage points per year, according to the report.

SOFA 2001 is being released two months before world leaders will gather at the World Food Summit. Government officials and civil society organizations will work out ways to reduce the number of hungry people in world so that their number may be cut from the roughly 800 million who were hungry in 1996 to no more than half that amount by 2015.

The extent of micro-nutrient deficiencies is staggering, says the report. "An estimated 740 million people suffer from disorders related to iodine deficiency, including mental retardation, delayed motor development and stunting. There are ... nearly 49.5 million people suffering from brain damage caused by iodine deficiency. About 2 billion people are anemic, mainly as a result of iron deficiency. Iron deficiency, the most common micro-nutrient disorder, reduces physical productivity as well as having a negative impact on children's cognitive skills." In addition, the report says that between 100 million and 140 million children suffer from vitamin A deficiency.

The report says: "Better nutrition leads to increased human capital and labor productivity through the channels of improved health and education, which in turn results in improved household and nation welfare, i.e. economic growth. Improved nutrition affects economic growth directly through its impact on labor productivity and indirectly through improvements in life expectancy," says the report.

FAO urges "targeted action against maternal and infant malnutrition" which always should accompany investment in health, education and sanitation. It says that improved protein and energy intake as well as reduced iodine, iron and vitamin A deficiencies, generates widespread health benefits for individuals as well as society.

According to the report, the biggest impact comes from improvements in the health of women, because this not only benefits families and communities today, but will also have a major impact on the health and productivity of the next generation.

In its special chapter on ‘Economic Impacts of Transboundary Plant Pests and Animal Diseases,' FAO warns that the spread of emergent diseases and invasive species has increased dramatically in recent years. The rapidly increasing movements of goods and people, trade liberalization, increasing concerns about food safety and the environment have heightened the need for international cooperation in controlling and managing "trans-boundary" pests and diseases.

The economic losses from plant pests and animal diseases can be enormous, but the type of economic impact can be complex. For many types of pests and diseases the economic losses resulting from reduced demand or the loss of export markets can far outweigh the costs caused by direct losses in production. The report reviews a number of studies assessing the economic impact of pests and diseases. For example, based on existing volumes of trade and phytosanitary restrictions, the Mediterranean fruit fly would cause more than $800 million in lost output and trade if it became established in the United States, according to one study cited in the report. Another study suggests that the 1996 eradication of foot-and-mouth disease in Uruguay could provide $20 million of actual and $90 million of potential additional exports revenue.

SOFA 2001 also contains a section about negotiations on international agricultural trade, which were launched within the World Trade Organization. Agricultural trade is particularly important for most developing countries that are exporters and importers of agricultural goods. Barriers to agricultural trade still represent a significant obstacle for many of them. The complexity of import regimes and the cost of complying with sanitary and phytosanitary standards and technical barriers to trade can be insurmountable obstacles, particularly for small developing countries. It is important that a new round of agricultural trade negotiations leads to greater opportunities for developing countries to participate in international agricultural trade, says FAO.