Both affordability and availability constrain access to a healthy diet in visible as some 68% of Pakistan’s population cannot afford a healthy diet. On average, a Pakistani household spends 36% of consumption expenditure on food (1st quintile – 47%; 5th quintile – 28%), World Bank highlighted in a policy note on agriculture.
Quoting results of a recent Food and Agriculture Orgainization (FAO), World Bank has said that Pakistan has experienced both high inflation and volatility of food prices over recent years highlighting the need to strengthen its food system. Food price inflation is driven by the interaction of demand and supply factors influenced by diverse actors in the system.
These interactions often do not result in optimal outcomes due to challenges like uncompetitive market conditions (e.g. faster pass-through of global surges in food prices to domestic prices than global falls) and market failures (e.g. higher food inflation in rural areas compared to urban areas, possibly due to higher margins in urban markets).
To better manage food price inflation policy makers must understand the role played by the different nodes of the food system and steer it towards desired outcomes with minimum distortions and unintended consequences.
More than half of the household’s food expenditure is spent on three categories cereals, meat, and dairy. However, when comparing the poorest quintile to the richest one, there are significant differences in dietary patterns with the poor spending more on cereal and vegetables and the rich spending more on fruits and meat.6 With higher incomes and urbanization, there is an increasing demand for a diversified package of foods, but inefficient markets do not convey these demand signals to producers to incentivize changes in the production mix. Direct interventions like incentives (cash transfers) and behavior change messages can be used to influence the affordability and consumer choice demand forces.
