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THE NEXUS BETWEEN AGRICULTURE AND NUTRITION 37


Investment Strategy and Fiscal Policies Public investments in rural infrastructure and agricultural research have been shown to have one of the largest impacts on poverty reduction and economic growth in a number of developing countries. There is no empirical evidence, how- ever, showing how different types of public spending affect nutrition. Given that public resources in most developing countries are scarce and the opportunity cost is high, decisionmakers should seek to allocate public resources more efficiently. This means taking into account the positive and negative spillover effects on nutrition and comparing them to other development outcomes, such as poverty reduction. Research on the effects of public investment should be expanded to include nutri- tion in order to give policymakers information on how to prioritize public spending according to nutritional and other development outcomes. Fiscal policies, like taxes on unhealthy foods and subsidies on nutrient-rich


foods, can also be used to maximize positive and minimize negative spillover effects on nutrition. While taxes on foods rich in saturated fats can be useful in generating government revenue, studies in developed countries show that such policies need to be complemented by interventions that discourage the consumption of these foods, including subsidies on nutrient-rich foods such as fruits and vegetables. More research is needed on the impacts of these kinds of policies in developing countries.


Conclusion A new paradigm for agricultural development is needed, whereby agricultural growth leads not only to increased production and reduced poverty but also to improved nutrition. The need for a new paradigm is especially pressing in light of rising food prices and stubbornly high rates of hunger and malnutrition. The question facing many developing countries is how to set priorities and sequence interventions to maximize the benefits from the dynamic and nonlinear relationship between growth and nutrition while also paying attention to the role of conditional factors. Growth, particularly agricultural growth, is still necessary to push down food prices, thus enabling the majority of the poor and hungry to benefit. The recent food crisis has clearly shown that the poor are especially sensitive to changes in food prices. Growth alone, however, is not sufficient to address undernutrition. It is thus


also important to identify the likely trade-offs between implementing pro-nutrition growth strategies, pursuing other objectives such as poverty reduction, and using instruments such as targeted nutrition programs—continuously paying extra atten- tion to the distribution of benefits and costs across different population groups. To help policymakers make sound decisions about priorities and sequencing, more research is needed on the impact of different sectoral patterns and public


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