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Abstract
In this paper, we evaluate the effects of policy reforms aimed at achieving two policy objectives
for grain consumption; (a) to double the intake of bread and breakfast cereals and (b) to
ensure that half of the bread and breakfast cereals consumed are whole grain products. The
overall aim of these policy objectives are to increase the dietary fibre intake from grain consumption
so as to significantly contribute to the general recommended (minimum) increase of
the fibre intake. Based on parameter estimates from a demand system we simulate the resulting
changes in volumes purchased and fibre intake from two policy reforms entailing differentiated
VAT on grain products. In the first reform we remove the VAT on "keyhole labelled" bread
and breakfast cereals, in the second reform we consider a more extensive policy package of
subsidizing the keyhole labelled bread and breakfast cereals by 20 percent while removing the
VAT on all other grain products. Our results indicate that both reforms are likely to be successful
in ensuring that the consumers attain the nutrition recommendations that half of the
bread and breakfast cereals consumed are whole grain products, but that additional policy
instruments are needed to reach the recommendation that the intake of bread and breakfast
cereals should be doubled.