Consumption effects of agricultural policies : what do we know? -- a review of USAID/Nutrition Economics Group research

Three types of policies were studied: (1) producer-oriented (commodity price supports, input subsidies, and technology); (2) consumer-oriented (food price subsidies and food stamps); and (3) marketing (infrastructure construction, promotion of competition, and elimination of barriers). Indirectly related economic policies were also studied, including exchange rate overvaluation, deficit spending, taxation, and trade. The report presents the following major conclusions. (1) Agricultural policies can be entirely counteracted by other economic policies. (2) Population groups are affected differently by policies, depending on income, occupation, and consumption patterns. (3) Policy implementation has as great an effect on outcome as policy design. (4) The time required to procure and prepare food is as important as price in determining consumption patterns. (5) Producer-oriented policies depend on the availability of complementary resources (land and labor). (6) Consumer-oriented policies can be effective in raising household consumption levels, but do not guarantee individual nutritional adequacy. (7) The effect of household income on food consumption is affected by the form, source, and locus of the income. (8) Marketing interventions can make long- term improvements in the stability of food prices and farm incomes.