The rise in international trade has changed the diet of Indian people, increasing the amount of animal products they eat. That is the central finding of a study by Cherry Law, to be presented at the Royal Economic Society''s annual conference at the University of Bristol in April 2017.
Using regional variations in India''s exposure to trade deregulation in the 1990s, the research shows that people in regions in India that were more exposed to international trade started to eat relatively less cereals and more eggs, fish and meat. The effect was both through changes in relative prices and possible changes in Indian tastes.
The author warns: ''Dietary westernisation in the developing world has resulted in both a higher intake of micronutrients but also an increase in obesity and non-communicable diseases. Through reducing consumption of cereals and increasing that of animal products, trade can both support and undermine the health development of people in developing countries.''
Trade reforms have contributed to a dietary shift from cereals to animal products in rural Indian regions, according to this research.
In many developing countries, there is a phenomenon of dietary westernisation in which their diet shifts from one dominated by traditional staples to one high in animal products. While this trend is associated with improved intake of micronutrients, it is also linked to higher risk of obesity and other diet-related non-communicable diseases and hence causes concern over its impact on population health.
Previous works argue that this adoption of non-traditional diet is partly driven by trade liberalisation. Given that trade is the key driver of economic growth in developing countries and these countries often face the problem of coexistence of under- and over-nutrition, understanding how trade may have affected their diet is of crucial importance for policy-makers.
The study is one of the first to provide evidence on the effect of trade on diet. The research examines whether the changes in consumption of cereals and animal products across rural regions from 1987 to 1997 can be attributed to their differential degree of exposure to India''s trade liberalisation, using household data from the Indian National Sample Survey and Indian tariff data from earlier works.
In 1991, in response to a severe balance of payment crisis, India opened its economy to international trade as a condition of a bailout from the International Monetary Fund. Tariffs were progressively reduced in the next few years, leading to rapid increase in the volume of imports and exports.
The level of exposure to the trade reform varied across Indian regions since each of them had a different industrial structure prior to the reform and tariffs were not cut uniformly across industries. Taking advantage of this regional variation in exposure to tariff cuts, the first part of this study identifies the trade impact on the share of food budget on cereals and animal products. It finds that regions facing a greater reduction in tariffs consumed relatively less cereals and more eggs, fish and meat.
How does this trade-diet link work? The second part of the research investigates the channels through which trade may have affected dietary pattern. The study reveals that by reducing the price of edible oils, the trade reform discouraged cereal consumption in rural Indian regions as they were shown to be substitute to cereals.
For animal products, the positive trade impact was channelled mainly through the enhancement in food tastes. One possible explanation for this taste effect is that the opening of economy may have increased interaction with foreign culture and encouraged local people to imitate the dietary pattern of more advanced countries.
Hence, Indian households living in regions with greater exposure to trade liberalisation were more likely to be influenced by western diet and therefore developed a stronger taste for animal products.
The researcher concludes that through reducing consumption of cereals and increasing that of animal products, trade can both support and undermine the health development of people in developing countries. She also stresses that apart from the standard economic factors, income and food prices, taste is an important channel through which the dietary effect of trade may pass.