Economic transformation, agricultural

policies and nutritional habits in Russia

FAO Expert consultation on trade and nutrition | 15-16 November 2016

Christine Burggraf, Thomas Glauben, Ramona Teuber

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Motivation

• Overweight and obesity not only in high-income countries but also in low- and middle-income countries

• Common health consequences: non-communicable diseases such as cardiovascular diseases, diabetes mellitus type II and some cancers

• In emerging and transition economies the triple burden of nutrition transition: undernourishment, micronutrient deficiencies and obesity

• The prevention of diet-related chronic diseases is one of the key global challenges of the 21st century!

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• “Russian people […] like to eat bread, sugar and animal fat -quite “harmful” high-calorific foods. A lot of people use lard instead oil for frying. Needless to say that the traditional Russian food does not differ much from American burgers.” (www.pravdareport.com)

Motivation

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In Russia:

• Prevalence of overweight and obesity increased from 52% in 1996 to 60 % in 2015

• Prevalence of diabetes increased from 3.4 % in 1996 to 9.2 % in 2015

• Share of deaths from non-communicable diseases increased from 81% in 2000 to 86 % in 2015

Nutrition transition in Russia!

Motivation

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Motivation

Nutrition transition:

• Shift of dietary patterns with increasing household incomes

away from a relatively monotonous and starchy diet with high amounts of fiber

towards a more varied diet of fruits and vegetables

towards higher contents of fat, sugar and animal proteins

Positive link between nutrition transition and a growing incidence of overweight, obesity and various chronic diseases, including diabetes.

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Objectives

• Description of the development of Russian dietary patterns during the post-Socialist transition

• Presentation of reasons why Russians – or different segments of the Russian population – choose an unhealthy diet

• Recommendations for measures to improve the quality of nutrition

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Russian nutrition transition

0

20

40

60

80

100

120

140

160

180

200

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Am

ou

nt

pe

r ca

pit

a in

kg/

year

Years

Fruits and Vegetables Meat Products Dairy products

Figure 1: Quantities per food group available per person in kg/year

Source: FAOSTAT Food Balance Sheets (Per caput supply)

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Russian nutrition transition

0

500

1000

1500

2000

2500

3000

3500

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

kcal

pe

r d

ay p

er

pe

rso

n

Year

Fat Protein Carbohydrate Total

Figure 2: Energy percent per macronutrients available per person per day Source: FAOSTAT Food Balance Sheets (Per caput supply)

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Macroeconomic development

Figure 3: Russian GNI per capita based on purchasing power parity (PPP) Source: Worlbank Databank

0

5,000

10,000

15,000

20,000

25,000

30,000

GN

I pe

r ca

pit

a, P

PP

Years

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Role of trade policy

Policies of trade liberalization:

• address physical trade and financial flows

• liberalization to improve economic growth with increasing household incomes

• for example by:

reductions of import barriers

export promotion and

reduced restrictions on company ownership, financial flows and trade in services

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Role of trade policy

Trade liberalization policy Food system effects

Associated nutrition effects

• Import facilitation (e.g. reduce tariff and non-tariff barriers of trade)

• Export promotion (currency devaluation)

• Encourage foreign direct investment (FDI)

• Decreasing support/protection of local food producers

• Increased availability and decreased prices of foods, especially of processed, convenience and fast foods

• Decreased seasonal fluctuations in food supply

• Increased animal production by increased feed imports

• Stimulation of local food industry by FDI, more competition and food technology transfers

• Specialization of local food production with higher profit margins

• Increased variety and amounts of foods consumed, especially of fruits, vegetables, meat and dairy products

• Decreased seasonal fluctuations

• Decreased consumption of carbohydrate foods

• Increased consumption of processed, refined, and pre-prepared foods

• Increased daily energy intakes

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• Liberalization of international trade and foreign direct investment has profound implications for food systems by:

Food availability,

Food accessibility,

Nutritional quality,

Prices; and

Promotion of foods.

• Public health attention has only recently turned to the links between trade and investment agreements, diets and health

Role of trade policy

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Role of trade policy

• Both negative and positive outcomes arise from different aspects of trade liberalization

• Especially increasing availability and affordability of processed foods and animal products with large portion sizes and a high energy density

• Often uneven dietary development: high-income groups accrue the benefits of a more dynamic marketplace, while lower-income groups often experience convergence towards poor quality diets

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2008 2009 2010 2011 2012 2013 2014 2015 2016

State Program for Development of Agriculture for 2013-2020

State monopolized United Grain Company to maintain grain market stability

Eurasian Customs Union (EACU) for economic integration and removal of all customs borders

Eurasian Economic Union (EAEU) harmonizing sanitary and food safety regulation

Grain export ban

WTO member (e.g., agreement for tariff reduction of agricultural products)

WTO ruled policies

State Program for Development of Agriculture for 2008-2012

Global financial crisis Severe drought

Severe drought

Western econ. sanctions and Russian import ban on Western food products

Trade policies in Russia

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Individual food demand

In addition to these macroeconomic influences, the decisive factor will be if and to what extent the Russian population is

willing and capable of making its own contribution to healthcare through balanced nutrition!

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𝑚𝑎𝑥𝐼,𝐛,𝑇

𝐽 = 0𝑇𝑈 𝐛(𝑡), ℎ(𝑡) 𝑒−𝜌𝑡 𝑑𝑡

s.t.

𝐻 𝑡 = 𝐼 𝑡 − 𝛄′ 𝐛 𝑡 − 𝐜 − 𝛿(𝑡)𝐻(𝑡)

𝐴 𝑡 = 𝑟 𝑡 𝐴 𝑡 + 𝑤 𝑡 ℎ 𝑡 + 𝑦 𝑡

−𝜋𝐻(𝑡)𝐼 𝑡𝛼 − 𝐩𝐛(𝑡)′𝐛 𝑡 − 𝑞(𝑡)𝑝𝑞(𝑡)

𝐼(𝑡) = 𝐼(𝐠 𝑡 , 𝑚(𝑡); 𝐸(𝑡))

with

𝐻 0 = 𝐻0, 𝐻 0 > 𝐻𝑚𝑖𝑛 > 0, 𝐻 𝑇 ≤ 𝐻𝑚𝑖𝑛, 𝐻 𝑡 > 𝐻𝑚𝑖𝑛 ∀ 𝑡 ≠ 𝑇,𝐴 0 = 𝐴0, 𝐴 0 > 0, 𝐴 𝑇 ≥ 0, 𝛼 > 1,𝐼 ∈ 0,∞ .

𝑈: Utility

𝐛: relative intake of risky nutrients

𝐠: relative intake of healthy nutrients

𝐻: health capital with ℎ(𝑡) = 𝜙 𝐻(𝑡)𝐼: health investments

γ: vector of health impact rates

𝛿: depreciation rate

𝑤: wage rate

𝑦: other income

𝐩𝐛: price vector of risky nutrients

𝐩𝐠: price vector of healthy nutrients

𝑞: representative outside good

𝑚: time invested in health

𝐸: nutritional knowledge

Dynamic Maximization Problem

Dietary health investment model

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Nutrient demand analysis

• Better-off citizens with higher educational qualifications tend to

consume more healthy foods that are rich in vitamins and minerals, but

they are also inclined to consume too many (saturated) fats.

• Poorer population strata are still struggling against considerable

vitamin and mineral deficiencies.

• Increasing prices for higher-fat foods reduce the consumption of these

products and at the same time benefit the consumption of foods rather

rich in vitamins and minerals through substitution effects.

• Nutritional knowledge is a key determinant of dietary quality.

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Policy implications

• To improve macroeconomic and agrarian development as well as a

better integration into international agricultural markets

• As long as import ban exists, to set more priority for import substitution

of greenhouse and early vegetables, fruits and berries

• To further develop small farming, rural areas and land improvements

• More effective measures to promote healthier diets, e.g. improving

communal-feeding menu offers, more nutritional knowledge and

product labelling such as traffic lights

• Tax on unhealthy foods often rather inadequate

Thank you for your attention!