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The State of Food Security and Nutrition in the World 2022

Chapter 2 FOOD SECURITY AND NUTRITION AROUND THE WORLD

2.3 Cost and affordability of a healthy diet: an update

KEY MESSAGES
  • Diet quality is a critical link between food security and nutrition. Poor diet quality can lead to different forms of malnutrition, including undernutrition and micronutrient deficiencies, as well as overweight and obesity.
  • The effects of inflation in consumer food prices stemming from the economic impacts of the COVID-19 pandemic and the measures put in place to contain it, have increased the costs and the unaffordability of a healthy diet around the world.
  • In 2020, the sharp increase in global consumer food prices in the second half of the year translated directly into an increased average cost of a healthy diet at the global level, and for all regions and almost all subregions in the world. The average cost of a healthy diet globally in 2020 was USD 3.54 per person per day; 3.3 and 6.7 percent more than in 2019 and 2017, respectively.
  • Latin America and the Caribbean had the highest cost of a healthy diet compared to other regions, at USD 3.89 per person per day in 2020, followed by Asia (USD 3.72), Africa (USD 3.46), Northern America and Europe (USD 3.19) and Oceania (USD 3.07).
  • Between 2019 and 2020, Asia witnessed the highest surge in the cost of a healthy diet (4.0 percent), followed by Oceania (3.6 percent), Latin America and the Caribbean (3.4 percent), Northern America and Europe (3.2 percent) and Africa (2.5 percent).
  • Almost 3.1 billion people could not afford a healthy diet in 2020 – an increase of 112 million more people than in 2019, reflecting the higher costs of a healthy diet in 2020. This was mainly driven by Asia, where 78 million more people were unable to afford this diet, followed by Africa (25 million more people), and to a lesser extent by Latin America and the Caribbean and Northern America and Europe (8 and 1 million more people, respectively).
  • The cost of a healthy diet will likely continue to rise as food prices have surged in 2021, and into 2022, but data are not fully available to provide updated estimates in this regard. The likely trend in the affordability of a healthy diet in 2021 and into 2022 is less clear due to differences in income growth.

Diet quality is a critical link between food security and nutrition. Poor diet quality can lead to different forms of malnutrition, including undernutrition, micronutrient deficiencies, overweight and obesity.3,15 The 2020 edition of this report included, for the first time, global estimates of the cost and affordability of a healthy diet. These are useful indicators of economic access to nutritious foods and healthy diets, which is one of the core principles embedded in the definition of food security.

Reporting on the cost and affordability of a healthy diet has brought global attention to the fact that, in countries both rich and poor, low disposable income relative to the high cost of food is one of the most serious impediments to accessing nutritious foods essential for a healthy, active life. In the 2020 edition of this report, the analysis showed that more than 3 billion people cannot afford even the average cost of the cheapest healthy diet.3

The cost and affordability of a healthy diet (CoAHD) indicators provide useful information for national governments, international agencies, civil society and the private sector to work together towards improving people’s economic access to a healthy diet and achieving longstanding goals for global food security and good nutrition. As mentioned in Section 2.2, attention to ensuring access to healthy diets has been increasing over the last decade, in particular after the Second International Conference on Nutrition (ICN2) in 2014 and during the United Nations Decade of Action on Nutrition (2016–2025).

FAO is continuing to systematically monitor and report on these new indicators annually in this report. Estimates in this year’s report are updated up to year 2020 (see Annex 2E). In addition, periodic revisions to the entire data series will be carried out to refine and improve its accuracy as new data become available and as methodologies advance, as is common practice for all the food security and nutrition indicators regularly monitored in this report. Revision to the cost and affordability of the healthy diet data series this year includes the updates to account for new income distributions, revised average percentage of income that can be credibly reserved for food, and a methodological refinement in the average cost of the diet that is more robust, provides greater transparency, and supports long-term monitoring utilizing annually reported price data. Box 6 provides a brief summary of these revisions and implications (see Herforth et al. [forthcoming]54 for a full description of data sources and methodology).

BOX 6Updated information and refinement in methodology improves the accuracy of the global estimates of the cost and affordability of a healthy diet54

The CoAHD series are updated this year to account for new information that FAO has received since the release of the previous editions, as well as a refinement in the methodological approach that supports long-term monitoring objectives. These updates apply to the entire CoAHD series, replacing the data reported in previous editions of this report; therefore, readers are advised to refrain from comparing series across different editions of this report. Readers should always refer to the most current edition of the report, including for values in the previous years to the most recent year for which data are being presented. See Annex 3 (Table A3.1) for the updated data series of the CoAHD indicators by country for 2017–2020.

REVISIONS BASED ON NEW UPDATED DATA

The new data used to conduct the revisions to the data series are reflected in two variables that inform the affordability of a healthy diet: the country-specific income distributions and the percentage of income that can be credibly reserved for food.

For this edition of the report, updated country-specific income distributions that are derived from the World Bank’s PIP were used to revise the 2017 affordability of a healthy diet indicator.51 This affordability indicator compares the average least cost of a healthy diet with the estimated income distribution in a given country, using income distributions from the World Bank’s PIP. It is used to count the number of people with insufficient income to purchase a healthy diet and also non-food items. Income distributions for 2017 are now available for all countries and were used to update the 2017 estimate of the number and percentage of people who cannot afford a healthy diet in each country. As the affordability of a healthy diet indicators were first presented in the 2020 edition of this report, specifically for the year 2017, this year naturally became the first (or base) year of the series.

The 2017 to 2020 series are also revised with updated data for the percentage of income that can be credibly reserved for food, considering that people must be able to afford food as well as non-food items. In the 2020 edition of this report, using the data from the World Bank Global Consumption Database,52 this was estimated at 63 percent based on the observation that this is the average percent of income the poorest quintile of people in LICs spend on food. In consultation with the World Bank, it has become apparent that this database will not be updated on a regular basis. The best alternative is the national accounts expenditure data from the World Bank International Comparison Programme (ICP) database.53 The ICP reports each country’s expenditure aggregates alongside the item prices used for other CoAHD calculations in a way that readily allows computing the national-average share of household income that is spent on food. Based on this database, the average percent of income spent on food in LICs is now estimated at 52 percent.54

REFINEMENT IN METHODOLOGICAL APPROACH FOR MORE ROBUST ANNUAL MONITORING

A new methodological refinement is applied in the estimation of the average cost of a healthy diet that is more robust, provides greater transparency and supports long-term systematic monitoring utilizing annually updated price data.54 In the 2020 and 2021 edition of this report, the cost of a healthy diet indicator was calculated based on the cost of meeting each of ten country food-based dietary guidelines (FBDGs) in diverse regions, representing a majority of the world population, taking the median cost across all ten healthy diets.3,54 This method was employed to ensure that diet cost calculations were directly based on FBDGs adopted by national governments, incorporating countries’ individual characteristics, cultural context, locally available foods and dietary customs. This method resulted in an average cost, but not a tangible basket of food groups and items.

Clarification of the amounts and types of food represented in the cost of a healthy diet indicator is important for transparency and better comprehension of the indicator by users and is important for simplifying the task of monitoring the cost of a healthy diet over time. As an update to the original method, therefore, rather than calculating the average cost of each guideline, the cost of the average food group quantities recommended in each guideline is calculated.54 This refinement in the method of the cost calculation is important because it is more transparent and tangible as to what the cost of the diet contains (i.e. which food groups and the amounts of foods in each), simplifies the calculation while making it more robust (approximating a larger range of FBDGs rather than only ten) and minimizes the price data needs for monitoring the indicator over time.

IMPLICATIONS OF THREE UPDATES ON THE DATA SERIES

When only the updated cost method is applied, the number of people who cannot afford a healthy diet declines. However, the two other updates affecting income have the opposite effect, pushing up the number of people who cannot afford a healthy diet. Applying both the new cost method and the updated income distribution and household expenditure share data from national accounts, the revised estimate for 2017 is that 3.05 billion people were unable to afford a healthy diet, which is only slightly higher than the 2017 estimate reported in the 2020 edition of this report (3.02 billion people in 2017).

Ranges of the affordability indicators shown in Table 5, with lower and upper bounds that reflect different assumptions about the share of income reserved for food by country income group, are presented in Annex 3 (Table A3.2).

The cost and affordability of a healthy diet in 2020

Table 5 presents the latest estimates of the cost and affordability of a healthy diet updated to 2020, representing the first global assessment since the year the COVID-19 pandemic spread rapidly across the globe. However, while affordability estimates in 2020 reflect food price shocks induced by COVID-19, the income shocks are not yet captured due to the unavailability of 2020 income distribution data in the World Bank's Poverty and Inequality Platform (PIP). Therefore, the estimated number of people who could not afford a healthy diet might increase further once the availability of 2020 income distributions will allow accounting for the combined effects of inflation in consumer food prices and income losses, stemming from the economic impacts of the COVID-19 pandemic and the measures put in place to contain it.

TABLE 5Almost 3.1 billion people could not afford a healthy diet in 2020 due to the increased cost

NOTES: The cost of a healthy diet is the benchmark 2017 USD cost per person per day (published in the 2020 edition of this report and updated as outlined in Box 6), projected forward to 2019 and 2020 using FAOSTAT data for each country’s CPI for food, and WDI data for purchasing power parity (PPP) exchange rate. The people unable to afford a healthy diet is expressed as the weighted percentage (%) and the total number (millions) of the population in each region and country income group who could not afford the diet in 2020. For country income groups, the 2021 World Bank income classification is used for the years 2019 and 2020.
SOURCE: FAO.

While global consumer food prices only began to increase in May 2020, by the end of the year they were higher than in any month in the previous six years. This sharp increase in the second half of 2020 translated directly into an increased average cost of a healthy diet in 2020 for all regions and almost all subregions in the world (Table 5). At the global level, the average cost of a healthy diet in 2020 was USD 3.54 per person per day, which represents a 3.3 percent increase from 2019, and a 6.7 percent increase from 2017.

Between 2019 and 2020, Asia had the highest increase in the cost of a healthy diet at 4.0 percent, followed by Oceania at 3.6 percent (Figure 16a). In Asia, this surge pushed up the average cost of a healthy diet to USD 3.72 per person per day. Two subregions in Asia had even higher single-year increases between 2019 and 2020: Eastern Asia (6.0 percent), and South-eastern Asia (4.2 percent).

FIGURE 16The cost of a heathy diet increased, and the diet was more unaffordable in every region of the world in 2020

NOTE: In Oceania, the diet cost increase between 2018 and 2019 is heavily influenced by food price inflation in Australia.
SOURCE: FAO.

Latin America and the Caribbean had the third highest increase (3.4 percent) in the average cost of a healthy diet in the same period, reporting the highest cost in 2020 (USD 3.89 per person per day). Northern America and Europe saw a cost increase of 3.2 percent and an average cost of a healthy diet at USD 3.19 per person per day. Africa had the lowest increase in the cost of a healthy diet between 2019 and 2020 (2.5 percent), reaching an average cost of USD 3.46 per person per day in 2020. The increase was highest in two subregions of sub-Saharan Africa: Eastern Africa and Southern Africa (3.4 and 3.3 percent increase, respectively).

The affordability of a healthy diet measures the average cost of the diet relative to income; therefore, changes over time can be the result of changes in the cost of the diet, people’s income, or both. Rising food costs, if not matched by rising income, will render more people unable to afford a healthy diet. If food costs rise at the same time incomes fall, this has a compounding effect that can result in even more people finding healthy diets unaffordable.

In 2020, the number of people who could not afford a healthy diet in 2020 increased globally and in every region in the world (Table 5). Similarly, the number increased in all subregions, with the exception of Northern Africa and Western Asia.

Between 2019 and 2020, the number of people in the world who could not afford a healthy diet increased by 3.8 percent (Table 5). Two regions registered the highest increases: Latin America and the Caribbean (6.5 percent) and Northern America and Europe (5.4 percent). However, the percent of the population who could not afford a healthy diet was around 22 percent for the former, and only 2 percent for the latter. This compares to 80 percent in Africa and almost 44 percent in Asia (Table 5).

As a result of the single-year increases in 2020, almost 3.1 billion people could not afford a healthy diet, an increase of 112 million more people than in 2019 (Figure 16b). Asia, where improvements in the affordability are observed between 2017 and 2019 (Figure 16b), accounts for the highest increase in the absolute number of people for whom a healthy diet is out of reach (78 million). All subregions except Western Asia show an increase: Southern Asia (35 million), Eastern Asia (27 million),h South-eastern Asia (16 million), and Central Asia (0.5 million). In Western Asia, the number decreased by 0.4 million. An average of 25 million more people in Africa could not afford a healthy diet in 2020. Specifically, this diet was out of reach for 27 million more people in sub-Saharan Africa – of which 21 million live in Eastern and Western Africa – while improvements occurred in Northern Africa with 1 million more people able to afford a healthy diet. In Latin America and the Caribbean, where 8 million more people could not afford a healthy diet in 2020, the increase was almost entirely driven by Latin American countries compared to Caribbean countries that reported a 0.5 million increase. The affordability remained stable in Oceania while it worsened in Northern America and Europe where 1 million more people were unable to afford a healthy diet.

Affordability of a healthy diet in 2021 and 2022

The lingering effects of the COVID-19 pandemic continue to exert inflationary pressure on foods and are contributing to a mixed picture of economic recovery among countries. At the same time, the war in Ukraine is now adding pressure by disrupting supply chains and affecting global grain, fertilizer and energy prices leading to shortages and fuelling even higher rates of inflation. Global food and energy prices are soaring and have reached levels that have not been seen in decades. Global economic growth prospects in 2022 have already been slashed.

While it is not possible to update estimates beyond 2020 at this time given that the core data required are not yet available, the cost of a healthy diet is likely to have continued to rise as food prices continued to increase in 2021 and are increasing into 2022. By December 2021, the latest available global consumer food price index (food CPI), which is the most relevant food price measure for the cost of a diet, was 11 percent higher compared to December 2020. Assuming the prices of nutritious foods follow the same general trend as food prices overall, a healthy diet may have already been pushed further out of reach for many.

It is expected that the upward inflationary trend will continue through 2022. However, notable regional differences in consumer food price surges are expected due to their different production and trade structures, as well as the speed of economic recovery. For example, the Latin America and the Caribbean food CPI shows the highest increase, at 23.5 percent between December 2020 and December 2021, while in Africa it was 15.5 percent and 14.8 percent in Asia. In contrast, it was 6.4 percent in North America, 4.4 percent in Europe and 2.5 percent in Oceania.

The likely trend in the affordability of a healthy diet is relatively less clear, as this depends not only on the cost of a healthy diet, but also on changes in incomes. While the economic recession that started in 2020 extended into early 2021 for many countries, others turned their economies around. As described in Section 2.1, the economic recovery has been highly uneven across countries, with LMICs and LICs experiencing a much slower pace of economic growth than HICs. For vulnerable populations within countries, the COVID-19 pandemic has had deeper and more protracted effects, aggravating existing inequalities within countries. Global extreme poverty has increased,11 as well as global income inequality.9 Among those populations who were already unable to afford a healthy diet, increased prices, together with reductions of income, will have deepened their affordability gap, putting a healthy diet, and among many even just meeting basic food needs, further out of reach.

The comparison of cost and affordability over time points to the important roles of changes in income as well as prices in determining affordability. The rise or fall of the number of people who can afford a healthy diet in 2021 and 2022 will depend largely on the magnitude of the increases in the average cost of a healthy diet, whether incomes improve or decline and by how much, and whether income inequalities increase or fall. However, it is worth remembering that many other factors can contribute to improving access to healthy diets. There is much that governments can do to promote better, more stable incomes, protect non-market sources of food provisioning, and decrease the effective cost of nutritious foods.

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