Cheap food is no so cheap for poor countries: Study

June 20th, 2008 - 2:12 pm ICT by ANI  

Washington, June 20 (ANI): A Senior Research Fellow in the New Delhi office of the International Food Policy Research Institute says that cheap food is not actually cheap for poor countries.

Bart Minten came to this conclusion after studying the food retail revolution in the Africal island nation of Madagascar.

The economist said that supermarket chains, though were praised for bringing low-priced goods to the developing world, had actually failed to attract the poor.

At the heart of the problem is a classic cost-benefit analysis by the consumer, he said.

During the course of study, Minten showed pictures taken of various items (rice, meat, tomatoes) from the newer supermarket chains to a sample of Malagasy shoppers.

He said that the respondent overwhelmingly agreed that the multinational chains had higher quality goods.

Minten, however, added: When I control for quality attributes, I find that food prices in the global retail chains are 40-90 per cent higher than those in traditional retail markets.

Malagasy shoppers were not willing to pay the high prices, he said.

According to Minten, the local markets operate at very low margins, and carry local foods of widely varying quality largely untouched by modern agriculture, both of which would be unacceptable to a multinational company.

He said: It thus seems that agriculture for local consumption in poor countries will be largely bypassed by the global food retail revolution.

The researcher notes, if the chains do survive in poorer countries, they will likely remain exclusively the domain of the middle classes, especially so in the poorest African countries. (ANI)

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