Fruits and vegetables availability for human

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Food Policy 33 (2008) 444–454 www.elsevier.com/locate/foodpol

Fruits and vegetables availability for human consumption in Latin American and Caribbean countries: Patterns and determinants Abay Asfaw *,1 PREM Gender and Development and MENA Social and Economic Development Group, The World Bank, 1818 H Street NW, Washington, DC 20433, USA and International Food Policy Research Institute (IFPRI), Food Consumption and Nutrition Division, 2033 K Street NW, Washington, DC 20006, USA Received 3 January 2007; received in revised form 15 January 2008; accepted 29 January 2008

Abstract Inadequate intake of fruits and vegetables (F&V) is one of the leading causes of chronic diseases in the world. This study examined the patterns and determinants of F&V availability for human consumption in Latin American and Caribbean countries between 1991 and 2002. The results showed that there were considerable disparities between and within countries and only one-third of the sampled countries (if only 20% wastage is assumed) could achieve the World Health Organization’s recommendation of 146 kg of F&V intake/capita/ year. The elasticities estimated from a fixed effect regression also showed that income, urbanization, price, and poverty were some of the important factors that affect the long-term availability of F&V. Ó 2008 Elsevier Ltd. All rights reserved. Keywords: Fruit and vegetable availability; Fruit and vegetable intake; Latin America; Chronic disease; Panel data; Stationarity

Introduction Delegates of the two days conference in Rio on ‘Healthy Weight in Latin America’ have pointed out that obesity has become ‘‘the epidemic of the new millennium”. More than half of the population aged 15 and above in most of the Latin American and Caribbean (LAC) countries were overweight in 2002 (WHO, 2004). The level of obesity was also more than 16%. As a result, obesity related diseases such as diabetes, high blood pressure, and heart disease have become a serious public health problems in the Region (Uauy et al., 2001; Bermudez and Tucker, 2003). The WHO has pointed out that inadequate intake of fruits and vegetables (F&V)2 is one of the leading causes * Address: PREM Gender and Development and MENA Social and Economic Development Group, The World Bank, 1818 H Street NW, Washington, DC 20433, USA. Tel.: +1 202 862 8103; fax: +1 202 4674439. E-mail addresses: [email protected], [email protected]. 1 This article was written while I was working for the International Food Policy Research Institute as a post doctoral fellow. I would like to thank FAO for allowing me to use the FAO food balance sheet data. 2 See Appendix 1 for food items classified as fruits and vegetables.

0306-9192/$ - see front matter Ó 2008 Elsevier Ltd. All rights reserved. doi:10.1016/j.foodpol.2008.01.007

of chronic diseases and mortality in the world (WHO, 2002). The worldwide burden of disease associated with inadequate consumption of F&V is estimated to be more than 2.6 million deaths per year. It is also estimated that increasing the per capita per day intake of F&V to 600 g could reduce the total burden of disease by 1.8% worldwide and the burden of disease associated with ischaemic heart disease by 31% and that of ischaemic stroke by 19% (Lock et al., 2005).3 The level of F&V intake in most parts of the world especially in developing countries is, however, far below the recommended level. The major objective of this study is therefore, to analyze the patterns and determinants of F&V availability for human consumption in LAC countries and to suggest policy measures that help to improve their availability in the region.

3 Generally increasing the availability of F&V for human consumption is considered as a win–win solution for producers, consumers and even for the environment. However, the cost effectiveness of this approach to other preventive interventions should be examined.

A. Asfaw / Food Policy 33 (2008) 444–454

Theoretical framework Various economic and non-economic factors can affect the availability or consumption of F&V at national, household and individual levels. Factors such as natural resources endowments, price, income, poverty, and infrastructure can affect the supply and demand for F&V. At the same time, social and demographic factors such as urbanization, prevalence of chronic diseases, nutrition knowledge, culture, religion, can influence the behaviour and attitudes of consumers towards F&V. Price is one of the most important economic factors that affect the production and consumption of F&V both from producers’ and consumers’ perspective. Economic theory reveals that relative prices can affect the food choices of consumers including the type, quantity and quality of food consumed. High price of F&V may compel consumers, especially energy constrained consumers, to shift their demand from these energy-dilute, highly hydrated food items to energy-dense foods (Lappalainen et al., 1997; Johansson and Andersen, 1998; Pollard et al., 2002; Darmon et al., 2002; Drewnowski and Barratt-Fornell, 2003; Drewnowski and Specter, 2004). This effect can be strengthened by the high palatability of energy-dense food items (Drewnowski, 1999). For producers, high price of F&V may imply high opportunity cost of consuming F&V compared to other food items. This implies that producers, especially income constrained producers, are more likely to sell their F&V products and consume cereals and other staple crops. Therefore, high price of F&V in a country can increase the availability of F&V in the market (through high domestic production and/or import) but may also decrease the consumption of poor producers and consumers. Income and its distribution is the other economic factor that influences the pattern of F&V availability for consumption (Reicks et al., 1994; Pollack, 2001; Regmi et al., 2001). The literature in this area shows that demand for F&V and income are positively correlated (for instance see Pollack, 2001; Regmi et al., 2001; Seale et al., 2003; Ruel et al., 2004). As income increases, consumers can afford to buy F&V which are relatively expensive per energy availability. Rich countries can also afford importing diversified F&V and providing necessary transport and storage facilities to smooth the consumption of F&V year round (Pollack, 2001). At the same time, rich consumers give more weight to health and nutrition issues than to meeting basic energy needs in their food choices4. Therefore, income increases the availability of F&V for human consumption either through high domestic production or through high imports or through both. However, at a country level, the impact of income on the consumption of F&V highly depends on the distribution of income. Controlling for overall income,

4 F&V have low energy content. Their demand usually comes from their rich micronutrient content.

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the availability of F&V for human consumption may be less in countries with very high inequality compared to countries with modest level of inequality. Media and food advertisement can also affect the availability of F&V for human consumption. A study conducted in the UK has shown that individuals go to magazines, televisions, radio, and newspapers if they want to know about healthy eating (Institute of European Food Studies, 1996). Consumers exposed to media and different messages concerning healthy eating may demand more F&V (Nicklas et al., 1998). However, exposure to commercial food advertisements and video viewing may promote the consumption of unhealthy fast foods and can lead to a decline in F&V consumption (Boynton-Jarret et al., 2003; Taveras et al., 2006; Wiecha et al., 2006). Producers, who have up-to-date price information, may also adjust their production decisions based on the current and future prices of F&V. Urbanization is one of the most important structural factors that affect the availability of F&V for human consumption. Differences in calorie requirement, income, awareness in health benefits of consuming F&V, availability of diversified F&V, differences in the storage and transportation etc., between urban and rural areas may bring basic differences in the availability of F&V for human consumption (Popkin, 1999; Regmi and Dyck, 2001; Mendez and Popkin, 2005). In countries where rural households produce and consume varieties of F&V, urbanization may reduce the overall availability of F&V for consumption especially if there is high urban poverty and income inequality (Johnson et al., 1998). On the other hand, in countries where the rural sector is dominated by subsistence agriculture, the availability of F&V for consumption depends on the households’ ability to produce surplus staple crops, to sell them, and on the relative price and availability of F&V. Urbanization associated with relatively high income growth and improvement in transportation, and expansion of supermarkets may increase the availability of F&V for human consumption. As shown above, access to mass media and different messages concerning healthy eating may also promote the demand for F&V. However, high opportunity costs of women and the expansion of fast foods and street vendors in urban areas may significantly reduce the demand for fresh F&V in urban areas (Haddad, 2003). So, the net impact of urbanization on the availability of F&V for consumption may not be a priorily hypothesized. Methodology The conventional demand model starts from utility maximization and uses the shares of each food group from the total expenditure as dependent variables. After imposing various theoretical restrictions (such as adding up and symmetry) in the model, then the Marshallian and the Hicksian price elasticities and the income elasticity of demand can be computed from the estimated coefficients. However, in cross-country time series context, it is quite

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difficult to get detailed food expenditure data for each country through time in a comparable fashion. As a result, it is difficult to use the conventional food demand models such as linear expenditure system, Rotterdam demand system, translog systems and Almost Ideal Demand Systems (AIDS). In this study, I use the following panel model to examine the determinants of F&V availability for human consumption over time by taking into account the individual-country differences.5 Specifically, I use the following panel data model: Y it ¼ a þ X 0it b þ mi þ eit

ð1Þ

where the subscripts i refers to country (18 LAC countries), t shows time (1991–2002), Y is the availability of F&V for human consumption/capita/year, X is a vector of explanatory variables, b is a vector of coefficients to be estimated, a is a constant term, mi is the country specific residual, and eit is the standard residual with the usual assumption of zero mean, constant variance, and uncorrelated with m and X. There are several types of panel data models. Fixed and random effect models are the most commonly used ones. The Hausman test is used to choose from the two models. Since our major objectives is not to estimate price and income elasticityies of demand but to examine the patterns and determinants of F&V availability for human consumption in LAC countries through time, this panel specification is appropriate. However, this specification to give valid results, the stationarity of the variables used in the model must be examined. One time series variable can have a statistically significant relation with another time series variable simply because of the presence of trend components. A series is considered as stationary if its mean and variance are independent of time. Various methods are developed to test stationarity of variables in panel data (Levin and Lin, 1993; Maddala, 1999; Im et al., 2003). In this study, I use the Fisher’s method developed by Maddala and Wu (1999) since it is not restricted to balanced panel data set (see Maddala, 1999 for the pros and cons of various methods). The Fisher’s test computes a unit root test for panel data based on combining the p-values of independent unit root tests (based on the method developed by Maddala and Wu (1999)). The null hypothesis is the existence of a unit root and a significant test statistic implies that the null hypothesis can be rejected, and thus that the series is stationary. If the series are not stationary (unit root), I test whether the variables can be co-integrated. According to Engle and Granger (1987), a system can be in a long-run equilibrium or co-integrated if the equilibrium error is in a stationary process. Co-integration exists if all the series are I(1)6 and 5 The estimated price and income elasticities from this model, however, are not directly comparable to elasticities estimated from household consumption or expenditure data sets due to differences in the measurement of the dependent variable and model specification. Further study may be need to examine relations between the two elasticities. 6 I(1) implies the series become stationary after taking its first difference.

the equilibrium error is I(0) or stationary. If series are cointegrated, it implies that a long-term relationship between the variables can be investigated since the series always converges to equilibrium owing to the stationary error term. Sources of data and measurement of variables Data collected at national, household, and individual levels are the three possible sources of information for food consumption studies (see Serra-Majem, 2001 for the pros and cons of each data source). Household surveys and the Food and Agricultural Organization (FAO) food balance sheet data are the two main data sources used in the literature to analyze consumption of F&V. Household surveys provide information on the distribution of food among different households and serve to examine the impact of household level (gender, education, income, location, health status, etc.) and other regional factors, on food consumption. However, consumption data from household surveys have several limitations, especially for cross-country analysis. First, the low frequency and short recall period of household surveys (usually once a year with a one week or one month recall period) may seriously under- or over-estimate the consumption of seasonal food items such as F&V. For instance, in poor rural households, a survey conducted one week before a harvest may seriously underestimate and one conducted after the harvest can over-estimate consumption levels in one country compared to another country (DeRose et al., 1998). Especially if this variation is systematically related to household characteristics such as job loss, illness, etc., the estimated demand elasticties can be biased even within a country. Second, the scope of household surveys can vary significantly, which makes cross-country comparison very difficult. For instance, the data collection methods can be different (e.g., 24-h recall period, food records and household budget) and some of the household surveys may omit food consumed outside home (Joffe and Robertson, 2001). Comparing food groups may also be very difficult since the definition of items may not correspond (Serra-Majem, 2001). The quality and validity of the data collected also totally depend on the willingness and ability of respondents to provide accurate information (Nelson and Bingham, 1997; Johansson et al., 2001; Andersen et al., 2004; De Bourdeaudhuij et al., 2005). Third, due to their expensive nature, enough nationally representative household surveys may not be available especially in developing countries and even if available may not be for the same years making crosscountry comparisons very difficult (Pomerleau et al., 2004). The alternative source of consumption information is the FAO food balance sheet data available at http://faostat.fao.org/. FAO estimates and regularly updates information on national food supplies for many countries in the world using food balance sheets. The food balance sheet measures potentially available food items for human consumption (FAO, 1983, 1984). The main advantage of this data set is that it is available for more than 170 coun-


tries world wide on 95 food commodities for long periods based on consistent methodology. This helps to make reliable cross- country comparison and year-to-year monitoring of food consumption (Atwood, 1991). It also avoids the bias associated with timing of household surveys. However, the FAO food balance sheet method has also several limitations. First, as in the case of most household surveys, it shows only availability and not actual consumption. Second, it does not take into account the distribution issues and shows only the per capita availability of food in a country. As a result, the conventional demand models cannot be used to estimate the traditional price and income elasticities of demand. Third, the food production, trade, wastage, etc. information may not be measured correctly especially in countries with relaxed borders and poor data base (FAO, 2002). It may also fail to take into account lesser-known food items and may not accurately measure roots and tubers compared to cereals and this may affect consumption comparison across countries especially if the comparison is made across different continents (Svedberg, 1991; FAO, 2002). Generally, the FAO balance sheet data gives the best and clear information to monitor the food supply situation across countries and through time. As FAO points out, the food balance sheet though may not satisfy all the statistical requirements, can provide enough information on the overall food situation that may be used for economic and nutritional studies (FAO, 1984). Eighteen LAC countries with complete information between 1991 and 20027 were included in the study. The availability of F&V/capita/year for human consumption (hereafter F&V availability) was taken from FAOSTAT and it is measured as follows. First, the total quantities of F&V produced in a country are added to net imports. Second, amounts lost in industrial processing, storing, transport, and used for purposes other than human food consumption are subtracted. Third, an adjustment is made to any changes in stocks. Finally, this quantity is divided by related population figures. I could not find complete time series retail price for F&V or other food groups for all LAC countries. Therefore, I used producer prices for F&V, cereals, and meat provided by FAOSTAT.8 Producer prices are measured as national average prices of all grades, kinds and varieties received by farmers at farm gate or first-point-of-sale. I converted these prices into US dollar for comparability purposes using the mean yearly average exchange rate of each country.9 Using producer prices instead of retail prices may give 7

The 1991–2002 timeframe was determined by the availability of price data. 8 I use only the price of cereals and meats because aggregate complete price information is available for these food groups. These food groups also constitute a significant share of the total food available for human consumption and are more likely to have cross-price effects. 9 Exchange rate and other information used in the study such as unemployment rate, GDP per capita, share of urban population, etc., were derived from the World Development Indicators of the World Bank.

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Table 1 Definition of variables Variable

Mean +

F&V availability ((F&V produced + net imports lost in processing, storing, transport & used for purposes other than human food consumption + changes in stocks)/total population) GDP per capita++ (per capita gross domestic product at constant 2000US$) Urbanization++ (i) Share of urban population living in areas defined as urban in each country (ii) Urban population growth rate Unemployment++ (share of the labour force that is without work but available for employment) Price of F&V+ (in US$ per ton) Price of cereals+ (in US$ per ton) Price of meat+ (in US$ per ton) Food price index++ (% change in the prices of foods used for private consumption in households) Radio++ (number of radio receivers in use for broadcasts to the public, per 1000 people) Telephone++ (international call minutes per subscriber) Sources: +FAOSTAT of FAO, World Bank.

167.24

3338.93 64.32 2.62 9.46 502.32 1558.82 1804.23 53.08 461.65 147.94

++

World development indicator of the

biased results. However, the difference between the two prices, the mark-up, does not pose a serious problem in panel data analysis if the relative prices at both ends do not vary significantly (for instance see Lind, 2000). To capture some of the differences in the mark-up, I included a couple of variables that reflect the retail price environment in each country.10 First, consumer food price index is added into the model to assess the over all price trend in each country. Second, I included international call minutes per subscriber to capture the information flows in each country. These variables are expected to capture some of the differences between producer and consumer prices. Income is measured by per capita gross domestic product (GDP) at constant 2000 US$. The number of radio receivers in use for broadcasts to the public per 1000 people is used as a media indicator. I hypothesize a positive relationship between these variables and F&V availability. Urbanization is measured in two different ways: the share of urban population from the total population and urban population growth rate. The share of the labour force that was without work but available for and seeking employment is used to approximate poverty. See Table 1 for the details. Results Patterns of F&V availability for human consumption in LAC countries Table 2 presents the overall mean and the within and between changes in F&V availability. The within changes 10 Export and import taxes were the ideal variables. However, I could not find enough time series data.

448


tion in the availability of F&V between countries than within a country through time. The results also revealed that compared with the availability of fruits there was relatively little variation in the availability of vegetables through space and time. The overall mean of vegetable availability was 46.56 kg/ capita/year and it varied between 7.00 and 121.00 kg in country-years and between 19.23 and 64.90 kg within countries. However, significant variation was observed in the availability of fruits as shown by the relatively high standard deviations. Though the overall average availability of fruits was 119.81 kg/capita/year, it varied from 34.00 kg/capita/year in Nicaragua in 2002 to 331.00 kg/ capita/year in Belize in 1992. The results also indicated that almost in all countries, except in Chile, the availability (per capita per year in kg) of fruits was consistently higher than that of vegetables. This trend was in sharp contrast to the trend observed in Africa (Ruel et al., 2004) but similar to the patterns observed in Europe (Naska et al., 2000; Yngve et al., 2005). Fig. 2 also clearly showed that there was small change in the availability of F&V in LAC countries between 1991 and 2002. The decline in fruit availability between 1998 and 1999 was the result of production failure and high

Table 2 Between, within, and overall changes in availability of F&V in LAC countries (1991–2002) Variable

Indicator

Mean

Standard deviation

Minimum

Maximum

F&V availability/ capita/year (kg) Vegetable availability/ capita/year in kg Fruit availability/ capita/year in kg

Overall Between Within

167.24

61.77 59.92 20.24

42.00 51.08 97.74

386.00 330.42 222.82


46.56

22.26 21.72 6.92

7.00 8.92 19.23

121.00 102.92 64.90


119.81

56.05 55.07 16.31

34.00 42.39 72.81

331.00 285.00 165.81

were computed for the total country-years and the between changes only for countries. The overall mean availability of F&V was 167.24 kg/capita/year. During the time under consideration, the between countries difference was much higher than the within countries difference as shown by the high between standard deviations (see also Figs. 1 and 2). This may indicate that there was significant varia-

Availability /capita / year in kg

350 Fruit

300

Vegetable

250

F&V

200 150 100 50

Belize

Jamaica

Costa Rica

Mexico

Ecuador

Argentina

Chile

Bolivia

Colombia

Barbados

Paraguay

Brazil

Uruguay

Honduras

Peru

Panama

El Salvador

Nicaragua

0

Fig. 1. Availability of F&V between 1991 and 2002 by country.

200 180

Availability/c/y in kg.

160 140 120 Fruit

100

Vegetable

80

F&V

60 40 20 0 1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

Fig. 2. Availability of F&V in LAC countries between 1991 and 2002.

2001

2002


449

4 3 2

Peru

Barbados

Uruguay

Jamaica

Bolivia

Costa Rica

Ecuador

Mexico

Belize

Panama

Brazil

El Salvador

Colombia

Argentina

Honduras

-2

Chile

0 -1

Paraguay

1 Nicaragua

Average growth rate (1991-2002)

5

-3 -4

Fig. 3. Annual average growth rate of F&V availability between 1991 and 2002 by country.

F&V availability/c/year in kg.

180 150 120 90 F&V

WHO recommendation (146kg/c/y) 60

Intake (10% wastage assumed)

30

Intake (20% wastage assumed) Intake (40% wastage assumed)

0 1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

Fig. 4. Availability and intake of F&V/capita/year in LAC countries between 1991 and 2002.

prices of fruits in North and South America. The average growth rate of F&V availability was also examined using a least squares method.11 Overall, F&V availability per capita grew at a rate of 1.33% per annum between 1991 and 2002. Availability of vegetable increased more than fruits. However, as shown in Fig. 3 the growth rate was not uniform among the sampled countries. While countries such as Peru, Barbados, Uruguay, and Jamaica had more than 2% annual growth rate, countries such as Nicaragua, Paraguay, and Chile, had experienced a negative average annual growth rate in the availability of F&V per capita between 1991 and 2002. Based on the effectiveness of F&V consumption against chronic, non-communicable diseases, WHO recommended an intake of more than 146 kg of F&V/capita/year (or 400 g/capita/day) for a healthy life (WHO, 1990, 2003). An attempt was also made to examine the compliance of F&V intake in LAC countries with this recommendation. As we have seen above, the FAO food balance sheet provides only the availability and not the actual intake of F&V. The intake of F&V can be lower than the availability 11 This method is preferred to other growth rate indicators since it considers all observation in the data set (World Bank, 2004). First I ^ from lnXt = a + bt + et and then the average annual growth estimate b ^ 1. rate is computed as antilog b

figures due to wastages at retail stores, households’ kitchen and even due to left over after every meal (Kantor et al., 1997; Pomerleau et al., 2003). Joffe and Robertson (2001) estimated the proportion of F&V wasted for European countries by subtracting intake data generated from individual daily consumption of vegetables and fruit surveys from the FAO availability data. They estimated that on the average there could be a 30% difference between FAO availability data and actual intake of F&V in European countries. Similar study conducted by Pomerleau et al., (2003) in 15 countries all over the world estimated the difference to be around 39%. The level of wastage in LAC countries can be, however, higher or lower than that of Europeans. The availability of transportation and storage facilities in European countries may help to reduce food wastage especially perishable food items like F&V. However, financial constraints in poor households may compel them to buy less variety and small quantities of food to reduce wastage. This process will also help them to estimate accurately what they need (Friel et al., 2004). Generally, poor households are more careful in minimizing food wastage than their rich counterparts (for instance, see Shaban et al., 2001). Therefore, I assume a wastage level between 10% and 40% for LAC countries. Fig. 4 presented the availability and estimated intake of F&V in LAC countries and the WHO’s recommended

450

A. Asfaw / Food Policy 33 (2008) 444–454 350

Availability/c/year in kg.

F&V 300


250


200


150 100 50 WHO recommendation (146kg/c/y) Belize

Jamaica

Costa Rica

Mexico

Ecuador

Argentina

Chile

Bolivia

Colombia

Barbados

Paraguay

Brazil

Uruguay

Honduras

Peru

Panama

ElSalvador

Nicaragua

0

Fig. 5. Availability and intake of F&V/capita/year between 1991 and 2002 by country.

level. As shown in the figure, though the availability of F&V in LAC countries was higher than the recommended intake level in all years, the estimated intake based on the 40% assumption of wastage was lower than the recommend level in all years. If we assume 20% of wastage, the estimated intake level would be equal to the recommended level only between 1999 and 2002. Significant variations were also observed between countries in achieving the 146 kg/capita/year goal as shown in Fig. 5. In countries such as Belize, Jamaica, Costa Rica, Mexico, Ecuador, and Argentina both the availability and intake (with less than 30% wastage assumption) figures were above or equal to the recommended level indicating that if the available F&V were distributed equally across the population, these countries could meet the F&V goal easily.12 In countries such as Paraguay, Chile, Barbados, Ecuador, Hondurans, Brazil, Bolivia, and Honduras the achievement level depends on the assumption of the wastage level. However, in countries such as Nicaragua, El Salvador, Panama, Peru, Honduras, and Uruguay even the total F&V available for human consumption was not enough to meet the WHO’s recommendation.13 Determinants of F&V availability The results of the previous section showed that there was large disparity in the availability and growth rate of F&V for human consumption between and within countries during the time under consideration. The results also showed that in more than one-third of the countries considered in the study, the level of F&V availability was less than the level recommended by WHO and in more than two-thirds of the countries the intake (assuming 20% wast12

However, these results should be interpreted with caution since some of these countries have the highest tourist flows in the region and therefore the figures may not indicate the amount of F&V available for the consumption of the local population (see for instance, Seale and Regmi, 2006). 13 If we consider the latest year (2002), only five countries cold achieve the 146kg/capita/year requirement.

age) was less than the recommended level. The next important step is therefore, to examine factors that affect the availability of F&V for human consumption in these countries through time. I estimate the following panel data model to investigate the determinants of F&V availability: ln FVait ¼ a þ P it ’b þ I it ’k þ c ln GDPit þ / ln Rit þ u ln Povit þ F it þ mi þ eit

ð2Þ

where i (i = 1, . . . , 18) and t (t = 1991, . . . , 2002) index country and time, FVait is F&V available per capita, P is a vector of price and price related variables including producer price of F&V, cereals, and meat, and food price index, I is a vector of variables that reflect the level of infrastructural development, GDPit is per capita gross domestic product at constant 2000 US$, R is an indicator of urbanisation: share of total urban population living in areas defined as urban in each country or the urban population growth rate, Pov is the poverty level approximated by the level of unemployment, Fit is the overall infrastructural development, and v and e are the error terms as defined above (see Table 1 for the definition and mean values of the variables). Before estimating the above equation, I test the stationarity of each variable using the Fisher’s panel data unit root test method. The results revealed that the hypothesis of unit root could not be consistently rejected for each variable. Therefore, I tested if a linear combination of the variables could be stationary in the framework of Engle and Granger (1987). As I have seen above, if the two conditions for co-integration exist, the variables can have a long-term, or equilibrium, relationship. Since the first difference of all the variables was I(0), the first condition for co-integration was satisfied. Then, I examined the second condition by performing a unit root test on the residuals obtained from estimating Eq. (2). The Augmented Dickey–Fuller test result presented in last column of Table 3 revealed that the residuals from the regression were stationary. This implied that Eq. (2) was a co-integrating regression. Therefore, Eq. (2) was estimated to examine the long-term

A. Asfaw / Food Policy 33 (2008) 444–454 Table 3 Determinants of F&V availability: fixed and random effect results Variable

Ln GDP per capita Ln share of urban population

Dependent variable: Ln F&V availability/capita/year Fixed effect

Random effect

Fixed effect

0.517*** (0.163) 0.784** (0.307)

0.362*** (0.102) 0.477* (0.263)

0.599*** (0.155)

Urban population growth rate Ln unemployment rate Ln price of F&V (US$) Ln price of cereals (US$) Ln price of meat (US$) Food price index International call/subscriber/minute Radio per capita Constant

0.068* (0.039) 0.172*** (0.063) 0.150** (0.064) 0.023 (0.057) 0.000** (0.000) 0.110*** (0.042) 0.004 (0.057) 2.666* (1.426) 0.478 0.109 0.949 42.15 (0.000) 178 18

0.089** (0.038) 0.117** (0.056) 0.102* (0.057) 0.032 (0.054) 0.000* (0.000) 0.079** (0.040) 0.038 (0.055) 0.185 (1.128) 0.298 0.109 0.880

0.079** (0.037) 0.073* (0.040) 0.164** (0.064) 0.155** (0.065) 0.028 (0.058) 0.000* (0.000) 0.067* (0.040) 0.001 (0.058) 0.255 (1.308) 0.507 0.110 0.955 57.35 0.000 178 18

r_u r _e q F-test that all u_i = 0: F(17, 151) Prob > F Observations 178 Number of groups (countries) 18 R-squared: Within 0.25 0.23 0.25 Between 0.08 0.15 0.11 Overall 0.15 0.21 0.18 Fixed vs. random effect Test: Ho: difference in coefficients 46.78 (0.000) between random and fixed effects not systematic Fisher’s panel co-integration test Ho: the error term is not stationary Cointegraiton test (ADF) v2 (36) 72.39 Prob > v2 0.0003 Standard errors in parentheses. * Significant at 10%. ** Significant at 5%. *** Significant at 1%.

impact of the explanatory variables on the per capita availability of F&V using both random and fixed effect specifications. The results presented in Table 3 revealed that except in the case of price of meat, which is insignificant, both the random and the fixed effect models gave similar results. However, the Hausman test favoured the fixed effect specification as shown in Table 3. The null hypothesis which said that the difference in coefficients between random and fixed effects were not systematic was rejected at less than 1% significance level. Therefore, I used the fixed effect regression results to interpret the results.

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Income measured in terms of per capita GDP was one of the most important factors that affected the availability of F&V as shown by its positive and significant coefficient. The fixed effect results showed that the long-run or static income elasticity of F&V availability was 0.52 in LAC countries during the time under consideration. This longterm income elasticity of F&V availability is comparable to the 0.53 income elasticity estimated for middle-income countries based on conventional demand models and data collected from the International Comparison Project (ICP) in 1996 (Regmi et al., 2001) and lower than the income elasticities estimated for low-income countries (between 0.64 and 0.99) (Ruel et al., 2004).14 The other important factor that affected the availability of F&V was urbanization. The fixed effect regression results showed that there was a positive and significant relationship between urbanization (share of urban population) and the availability of F&V in LAC countries. However, when urban population growth rate was used instead of the share of urban population (last column of Table 3), the coefficient became negative and significant. This may indicate that highly urbanized countries were more likely to consume more F&V than countries with high yearly exodus of people from rural to urban areas.15 Poverty, approximated by unemployment rate, was also the other long-term important factor that affected the availability of F&V in LAC countries during the time under consideration. A 10% decrease in the level of unemployment is likely to increase the availability of F&V by 6.8%.16 The coefficient of the radio variable is positive but statistically insignificant indicating that the media has played little role in promoting the availability of F&V for human consumption. The international telephone variable is positive and significant. Probably this may capture the level of F&Vs available for tourists’ consumption and the flow of price and production information. As expected, after controlling food price index and other variables, price of F&V was negatively and significantly associated with the per capita availability of F&V. The long-term price elasticity of F&V availability was 0.17. The coefficient of the price of cereals was also 0.15 and significant. The cross-price elasticity of demand between F&V and cereals estimated for middle-income countries from the ICP was between 0.1 and 0.15 (Regmi et al., 2001). The coefficient of the price of meat variable, however, was statistically insignificant.

14 However, the results in this paper are not directly comparable to these studies because their analysis was based on consumer utility maximization theory and they used household level data and the conventional demand models such as AIDS. The elasticity figures shown in this paper indicate long-term relation between F&V availability and the variables under consideration. 15 Lately urbanized countries might also have different structural characteristics than early urbanized countries in affecting the demand and supply of F&V. 16 This variable can also pick the effect of income distribution.

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Discussion Obesity and chronic, non-communicable diseases have become the most important public health problems in LAC countries. Inadequate intake of F&V is considered as one of the leading causes of micronutrient deficiencies, obesity, and chronic diseases. It is also ranked as the 6th most important factor for the mortality worldwide. The level of F&V intake in most parts of the world especially in developing countries is far below the recommended level. In this regard, understanding the trend and determinants of F&V consumption is one approach to find solutions for the low level F&V consumption and related health problems. The major objective of this study was therefore, to analyze the patterns of F&V availability for human consumption and its drivers in LAC countries, where the prevalence of obesity is one of the highest in developing world. I used data from FAOSTAT of FAO and World Development Indicator of the World Bank. Panel data analysis methods were used to ascertain the determinants of F&V availability for human consumption in LAC countries between 1991 and 2002. The results indicated that the overall mean availability of F&V in LAC countries between 1991 and 2002 was 167.24 kg/capita/year. Generally, the amount of F&V available in LAC countries was big enough to meet the WHO’s F&V intake level if no wastage is assumed. However, serious shortage was observed in some countries such as Nicaragua, El Salvador, Panama, Peru, Honduras, and Uruguay. Except in Peru and Uruguay and to some extent in El Salvador, the growth rate of the availability of F&V in LAC countries was not also encouraging during the time under consideration. The policy implications of these results are that in these countries the focus of public policy should be on increasing the availability of F&V through encouraging production and trade. On the other hand, in countries where the apparent availability level was higher than the recommended level such as Belize, Jamaica, Costa Rica, Chile and Mexico, distribution and nutrition education might be a priority policy areas to intervene. The fixed effect regression results also revealed that economic variables such as income, poverty, price and demographic indicators such as urbanization helped to explain the variation in the availability of F&V in LAC countries. More specifically, the results showed that per capita availability of F&V was much higher in relatively wealthier countries than in poor ones. The estimated income elasticity showed that ceteris paribus, a 10% increase in GDP per capita of LAC countries was likely to increase the long-term availability of F&V by 5.2%. Price of F&V was also important factor in explaining the availability of F&V. The estimated long-term prices elasticity of F&V was 0.17. This implies that in the long-run a 10% increase in the price of F&V was likely to decrease the availability of F&V for human consumption

by more than 1.7%, ceteris paribus.17 F&V availability was also found to respond significantly to changes in the price of cereals. The regression results indicated that the cross-price elasticity of availability of F&V to cereals was 0.15. This implies that a 10% increase in the producer price of cereals was likely to increase the long-run availability of F&V by around 1.5%, ceteris paribus. Poverty, approximated by unemployment rate was also negatively related to the availability of F&V. The longrun availability of F&V was very low in country-years where the unemployment rate was very high. A 1% decrease in the rate of unemployment could help to increase the availability of F&V by around 7 percent. This also indicated that improving the level of income distribution can increase the demand and then the availability of F&V for human consumption. The regression results also indicated that urbanization (share of urban population) was positively and significantly correlated to the availability of F&V in LAC countries. A 10% increase in the share of urban population from the total population was likely to increase the long-run availability of F&V by 7.8%, ceteris paribus. However, when urbanization was measured by urban population growth rate, the coefficient became negative and significant. These results might indicate that in countries with well-established urban population the availability of F&V for human consumption is more likely to be higher than in countries with high rural-urban migration rate. The coefficient of radio variable is positive but statistically insignificant. This might indicate that either there was little coverage about the potential health benefit of consuming F&V or people in these countries did not rely on the media for this sort of information, or both. In both cases, appropriate measures should be taken to increase the role of the media in increasing the availability of F&V for human consumption. Generally, the results indicate that there is scope for promoting the consumption of F&V in LAC countries through economic incentives such as reducing the relative price of F&V and/or decreasing poverty (inequality). As in the case of other cross-country regression studies, however, the results of this study should be interpreted with appropriate caution. First, supply side variables were not included in the model. Second, the FAO availability data may over-estimate the availability of F&V. Third, the FAO food balance sheet data hide significant variation in the availability of F&V between urban and rural areas, rich and poor consumers, etc. It does not also exclude the amount of F&V consumed by tourists. As a result, the estimated elasticities indicated only the average responses. Fourth, due to lack of enough observations, different elasticities could not be estimated for poor and relatively rich nations. Finally, the 17 Since I used producers’ prices instead of retail prices, the price elasticity figure can be a little bit underestimated. However, as I have pointed out above, this does not pose a serious problem in the case of panel data analysis.


estimated coefficients should be taken as long-term responses in the framework of Engle and Granger co-integration. Appendix 1 Food items classified as fruits and vegetables Fruits

Vegetables

Oranges Lemons and limes Grapefruit and pomelo Citrus fruit, nec Bananas Plantains

Tomatoes Onions (inc. shallots) Garlic Carrots and turnips Cauliflowers and broccoli Leeks, other alliaceous vegeta Cabbages and other brassicas Lettuce and chicory Cucumbers and gherkins Pumpkins, squash and gourds Peas, green Beans (inc. string b.), green Legum. veg., nec

Apples Pineapples Dates Grapes Figs Avocados Guavas, mangoes, mangosteens Tangerines, mandarins, clem. Papayas Pears and quinces Apricots Cherries (incl. sour cherries) Peaches and nectarines Plums and sloes Strawberries Raspberries and other berries Currants and gooseberries Cranberries, blueberries Kiwi fruit Fruit, nec (inc. persimm.)

Artichokes Asparagus Mushrooms and truffles Chillies and peppers, green Watermelons Other melons (incl. cantaloupes) Eggplants (aubergines) Spinach Vegetables, nec (inc. okra)

Source: FAO. FAOSTAT.

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