The Rising Costs Of Nutritious Foods In Ethiopia

Costs of healthy diets are worryingly rising in a number of developed and emerging economies. However, less is known on these costs for developing countries. Using price data from a large number of markets in Ethiopia, we find that real prices of all nutritionally-rich food groups increased significantly (between 19 and 62 percent) over the period 2007 to 2016. This contrasts with (1) staple crops (grains, roots, and tubers), which did not show any price increase, and (2) oils, fats, and sugar, the prices of which decreased substantially. Using detailed nationwide datasets and relying on time series methods, we link these price increases to changes in local markets, demand and supply factors, transaction costs, and international trade. We find that prices of nutritionally-rich food groups – compared to cereals – are relatively less affected by international trade and exchange rate changes but more so by rapidly increasing local and city demand. This rising demand is likely due to recent income growth and rapid urbanization and the high-income elasticities for nutritious foods in Ethiopia. Moreover, we find that local production changes affected prices of nutritious items little, but national price rises were found to have been significantly linked with food price rises in commercial clusters in the country. Changes in transaction costs – fuel and transport costs – explained relatively little of the observed food price changes.

Given the high prevalence of undernutrition among children in low income countries and the associated high human and eco-nomic costs (Hoddinott et al. 2013), improving nutritional out-comes must be an urgent priority. Improving nutrition is high on the policy agenda of the government of Ethiopia, as stated in the Growth and Transformation Plan II, which aims to reduce young child stunting levels from 40 percent in 2014/15 to 26 percent in 2019/2020. Lack of access to diverse diets is one of the underlying factors contributing to chronic undernutrition (Arimond and Ruel 2004, UNICEF 1998). Despite recent improvements, child stunting in Ethiopia remains widespread (CSA and ICF International 2017). Moreover, Ethiopian children consume one of the least diverse diets in sub-Saharan Africa (Hirvonen 2016). At the household level, food consumption baskets are dominated by cereals and pulses, while the consumption of animal-source foods and fruits and Vitamin A-rich vegetables is rare, especially in rural areas.1 Such monotonous diets are regarded as a major contributor to non-communicable diseases in Ethiopia (Melaku et al. 2016). Recent research suggests that the poor dietary diversity in ru-ral areas can be explained, at least partly, both by limited knowledge about the health benefits of diverse diets and by poor access to food markets. Households in areas in which food crop production is not very diverse but which have good access to mar-kets are found to have more diverse diets than do households in such areas but which have poor access to markets and, so, de-pend primarily on own-production for the food they consume.2 Yet, even with sufficient access to markets and knowledge on the benefits of diverse diets, poor households may simply be un-able to afford nutritionally rich foods (Warren and Frongillo 2017). Indeed, prices and affordability of nutritious foods remains a neglected area of research in efforts to understand poor dietary diversity in Ethiopia and elsewhere.3 In the analysis described here, we explore how prices and, consequently, the affordability of nutritious food have changed over the last decade in Ethiopia.

In many developing countries in which staple foods dominate the composition of diets, higher consumption of animal-source foods (ASF) is associated with significant nutritional benefits. Given the importance of prices for consumption decisions in these settings, we analyze ASF price patterns in the last decade (2007-2016), relying on a large-scale price dataset collected in 116 urban retail markets in Ethiopia. We document important seasonal and spatial patterns and we find, worryingly, that real prices of ASF have been increasing in the last decade by between 32 to 36 percent for three major ASF – milk, eggs, and meat. Similar price increases are noted in rural and urban areas and for tradable and non-tradable ASFs. This price trend is in contrast with staple cereals for which real prices stayed at similar levels over the last decade. As we estimate that a price increase of this magnitude would reduce consumption of ASF by approximately 25 percent, holding other things constant, it seems that more investments and attention to the production of ASF and the livestock sector are needed to reduce ASF prices and increase their consumption in Ethiopia.

We study price behavior of vegetables and fruits in Ethiopia over the 15 year period from 2005 to 2019 based on large-scale retail and producer price datasets. This is an important topic given the importance of prices for consumption decisions for these nutritious crops. A number of notable findings come from the analysis. First, prices are rapidly increasing both in real terms and when compared to cereals. At the end of the study period in 2019, vegetables and fruits in real terms were significantly more expensive than 15 years earlier. Especially green leafy vegetables show a significant price rise, likely because few high-yielding varieties of these vegetables have been made available and adopted by producers. Second, part of the rise in prices is explained by increased marketing margins. To understand what accounts for these increases in the marketing margins for fruits and vegetables requires more research, as they contrast with stable or declining margins seen for other food crops over the study period. Third, we see significant seasonality in vegetable prices that is mostly driven by supply factors, but also by demand shifts due to increased demand in fasting periods. Fruit prices do not show such high seasonal variation, however. Fourth, there is significant spatial price variation in the country – vegetable prices are 60 percent more expensive in lowland regions than in the Amhara region, where vegetables are cheapest. Fruit prices in the lowlands are double the prices in the major producing area, the Southern Nations, Nationalities, and Peoples' (SNNP) region.

Agricultural transformation has been ongoing for decades in Ethiopia where the agenda to improve nutrition has also gained momentum. This paper assesses ways in which the government could coherently pursue the objectives of reducing the cost of the least cost healthy diet for Ethiopians and achieving faster inclusive agricultural transformation (IAT), for example by increasing agrifood output, creating rural off-farm employment and reducing rural poverty. The main finding is that pursuing IAT objectives also allows reducing the cost of the least-cost healthy diet. Ethiopian policymakers may consider repurposing the budget for agriculture to pursue IAT objectives as suggested in this paper in order to increase value for public money, not only in terms of agrifood output growth, job creation and poverty reduction, but also in terms of increasing the affordability of healthy diets.

Ethiopia has witnessed significant reductions in child mortality, undernutrition, and communicable diseases, but more substantial and faster progress is still needed. The rise in obesity and in noncommunicable diseases, particularly in urban areas, is alarming and requires urgent policy and programmatic attention. Unhealthy diets drive both undernutrition and obesity and are the underlying cause of significant proportion of both communicable and non-communicable diseases. Maintaining the relatively high breastfeeding practices and increasing the diversity of diets will be critical to improving nutrition in Ethiopia. Implementation of effective nutrition messaging that shapes consumer behavior to adopt healthy dietary patterns, while bridging gaps in both the reach and the quality of such messaging is warranted. The health extension program, which is the cornerstone of the transformation of the health sector, may need to be redesigned in a way that improves its reach and the quality of the services it provides and minimizes the risk of burnout of frontline health workers. Interventions focusing on making healthy diets available, affordable, and accessible are urgently needed.

Using survey data collected from 996 representative households in Addis Ababa, Ethiopia, this paper documents several insights to help understand urban consumer food purchasing and consumption choices. The findings can be summarized as follows: 1) We find that households face important dietary gaps; a large proportion eats insufficient amounts of nutrient-dense vegetables, animal-source foods, and fruits. 2) The consumption of ultra-processed foods increases with income and may become a pressing health concern as incomes rise. 3) From a purchasing perspective, we find that consumers buy foods for different purposes at different outlets. Nearby kiosks and informal street markets are frequented for small food items and for fruits and vegetables, while formal open markets and consumer cooperatives are used for bulky food items. 4) Respondents make food and food outlet choices based on their health and food safety concerns, but few consider the nutritional value of food when purchasing it. Concurrently, the availability of a wide variety of healthy and safe foods is highly valued by most respondents for outlet choice. Among consumers in lower income categories, they tend to make food and food outlet choices based on prices and location convenience. 5) Although nutrition is not a primary concern when making choices about food, consumers appear to have reasonable nutritional knowledge. Most respondents considered a healthy diet to be primarily plant-based. Most people are aware that they should eat more fruits and vegetables and less sugary, fatty, and salty foods, but they have limited knowledge on the nutrient content of specific foods and the causes of obesity. 6) Labelling would not be an effective way to increase nutritional knowledge; most respondents have limited understanding of the information that labels provide. Rather, most respondents trust the information provided by health professionals over other sources. In sum, these results are potentially relevant for policy and the design of future programs for improving nutritional outcomes through enhanced diets.

Africa's food systems are changing fast amid rapid economic growth, emerging urbanization, and structural transformation. In this study, we use four rounds of nationally representative data from Ethiopia to examine changes in household food consumption patterns over a period of unprecedented economic growth. We find that while there is a general decline in the share of food in the total consumption basket of households in Ethiopia, food quantities and intake of calories have increased considerably over the period 1996 to 2011. This was mostly driven by improvements in household incomes, as shown using decomposition analysis. Furthermore, the content of the food basket is changing with a gradual shift towards high-value foods, such as animal products, fruits and vegetables, and processed foods. However, irrespective of the level of income, a heavy focus on starchy staples in the Ethiopian diet remains. Overall, this diet transformation has important implications for the food security debate and for agricultural and food policy in the country.