How Consumer Price Subsidies affect Nutrition

Abstract

We study the effect of an exogenous increase in food grain subsidy from a program targeting the poor in rural India and find that the increase in income resulting from the subsidy increased consumption of the subsidized grains and certain more expensive sources of nutrition, lowered consumption of coarse grains, the cheaper, yet, unsubsidized staple food, and increased expenditures on nonfood items but had no effect on nutrition in poor households. Estimates of the price effect of the subsidy on nutrition are also negligible; the price subsidy increased consumption of wheat and rice and lowered consumption of coarse grains.

The Nutrition Transformation: From Undernutrition to Obesity

“…Rahman (2016) and Kishore and Chakrabarti (2015) have linked universal access to the PDS with greater household diet diversity. However, in a study by Kaushal and Muchomba (2015), the author found that PDS access may not have a clear impact on nutrition outcomes. The challenges in implementation that have led to this mixed evidence on their impact will be discussed in more detail in the next chapter.…”

Unraveling India's Malnutrition dilemma - a path toward nutrition-sensitive agriculture.

“…Under the PDS, rice, wheat, kerosene, sugar, and edible oil were distributed to consumers through Fair Price Shops at subsidized prices. PDS encountered various challenges, including poor geographic coverage and escalating fiscal costs, and was ultimately deemed a failure (Ramaswami, 2002), with evaluations showing that it did not impact overall calorie intake in the country (Kochar, 2005;Kaushal and Muchomba, 2015). In 2005, measures were taken to improve the system's coverage, efficiency, and targeting (Dreze and Sen, 2013;Dreze and Khera, 2015).…”

Leveraging Social Protection Programs for Improved Nutrition: Summary of Evidence Prepared for the Global Forum on Nutrition-Sensitive Social Protection Programs, 2015

“…Lower prices on basic grains in China and India have been shown to have little impact on net energy consumption, in the latter case due to substitution of rice and wheat for greater amounts of coarse grains by consumers in areas where rice and wheat were not the main source of calories (Jensen and Miller 2011;Kaushal and Muchomba 2015). In contrast, a tax exemption on …the net impact of a subsidy on total energy, protein, or vitamin consumption is indeterminate.…”