As success is achieved in raising agricultural output and incomes in general, increased attention is being paid to improving the incomes and nutritional status of the lower-income, more disadvantaged peoples. Food subsidies have become an increasingly important means of transferring income to the poor. Because low-income people spend a much higher proportion of their income on food, food is a relatively efficient area for use of subsidies. They increase nutritional status more than other sources of income (see IFPRI Research Report 5, Impact of Subsidies Rice on Food Consumption and Nutrition in Kerala, by Shubh Kumar), and they have greater political acceptance among those with higher incomes, making them an attractive means if innocent transfer. However, there are also serious fiscal policy problems associated with food subsidies, as IFPRI’s current research in Egypt where food subsidies are unusually large, has shown. Precisely because food subsidies attack a poverty problem of immense size, they can easily expand to the point where they prejudge other designed to increased future incomes of the poor. Thus research is needed to provide knowledge for increasing the efficiency of food subsidies in meeting their various objectives. This study by Cheryl Williamson Gray uses a detail, large-scale consumer budget survey of Brazil to shed light on these problems. It measures differences in consumption pattern among people in different region and income group as a basis for measuring the comparative effectiveness of subsidies levied on different types of food. The study shows that the commodity chosen for emphasis in a subsidy program has a major effect on who benefits and by how much and hence its efficiency in reaching particular equity objectives. From this base a variety of policy analysis are carried out. The International Food Policy Research Institute has a distinguished record of studies in this area, most notably those on India, Bangladesh, and Sri Lanka. A major study is under way in Egypt. Other work is examining the effects of rural employment schemes, a common rural analog to food subsidies, which tends to be urban oriented. Thus IFPRI is constructing a base for a major comparative income, food consumption, and the nutritional status of both rural and urban people. Cheryl Williamson Gray’s study is an important building block in this continuing effort.


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