Seasonal price variability and the effective demand for nutrients: Evidence from cereals markets in Mali

Abstract

A key outcome of the food policy reforms initiated in the 1980s in Mali was the liberalization of the cereals markets in order to stimulate agricultural production and reduce reliance on imported rice. These market reforms resulted in more variable food prices because grain prices were no longer fixed by the government but rather influenced by the seasonal pattern of production and availability, regional and international supply and demand conditions. Malian policy makers have often expressed their concerns about seasonal grain price variation in Mali. However, measurements of its immediate effects on households' effective demand for nutrients have been relatively scarce. This study uses panel data from a 2000-2001 household consumption survey undertaken in Bamako to estimate nutrient-income and price elasticities by season and for the entire year and examine the effects of intra-year price variation on nutrient demand. The study finds that real income has a statistically significant positive impact on the demand for calories, protein, calcium, vitamin A, and iron and that the income elasticities for calories (from 0.102 to 0.193) varies less across seasons than those for micronutrients (for example vitamin A from 0.492 to 0.725). During the lean season, a 10 percent increase in real incomes will improve calorie availability from staples and other foods by 1.36 and 3.36 percent, respectively. The pooled data results show that a 10 percent growth in real incomes will increase the demand for calories (+1.62 %), protein (+1.91%), calcium (+1.98%), vitamin A (+7.21%) and iron (+1.29%). The findings of this study have several implications for food policy design in Mali, and possibly for other Sahelian countries.The most striking result is that in the face of seasonal variations in the price of staples, Bamako households attempt to “defend” their calorie consumption by reducing the consumption of higher-cost but more nutrient-rich foods. Thus, the price fluctuations of staples can significantly affect the consumption of protein and micronutrients that the staples themselves do not contain. Measures to bring about more stability of thestaple-food markets (regional trade policies, better infrastructure) would thus have impacts on nutrition and on the demands for other more nutrient-rich products well beyond the staple-foods. In other words, if you are interested in Vitamin A or iron consumption, the path to affect those most may be through the staple foods market, even though most Malian staples are not rich in those micronutrients.

Key words: Nutrition, Seasonal, Price, Income, Mali