The FAO estimates that malnutrition costs the global economy up to US$3.5 trillion or US$500 per person annually. To address this waste of economic potential, countries need to find ways to promote productive, sustainable food systems that support diverse, nutritious, and safe foods for all their citizens.

In July, the Global Panel on Agriculture and Food Systems for Nutrition released a technical brief illustrating the various pathways through which malnutrition carries fiscal and economic costs. The report also highlights the high returns that can be gained from combating malnutrition and makes a number of recommendations for policymakers.

In order to understand and analyze the economic impacts of malnutrition in all its forms, the brief presents a conceptual framework that splits malnutrition into four pathways: mortality, ill health, impaired physical growth, and impaired cognitive development. Each of these pathways can then be split into individual, societal, and national impacts. For instance, impaired physical growth causes high costs due to lost earning potential on an individual level, high losses of labor productivity and income on a societal level, and high losses of potential economic output on a national level.

The brief argues that such a framework is critical, as previous fiscal assessments of malnutrition have focused only on single pathways; this limited view poses a barrier to a comprehensive, all-encompassing policy approach to the challenge of malnutrition. The advantage of the brief’s new conceptual framework lies in the fact that it separates the numerous pathways through which malnutrition impacts individuals, societies, and the nation as a whole, as well as highlighting how these impacts are interwoven and interact with each other.

The paper presents a number of global examples malnutrition’s direct and indirect costs. For instance, child undernutrition in Malawi in 2012 cost around US$600 million, equaling 10 percent of the country’s GDP. In terms of healthcare costs and income lost to ill health, India experiences an estimated annual 50 million Disability Adjusted Life Years (DALYS), which translates to economic losses of more than US$50 billion (one DALY is estimated at US$1000). The economic consequence of malnutrition can also be manifested in lost growth potential and in reduced labor market engagement. For example, job absenteeism linked to obesity in the US causes potential losses of $4.3 billion each year. The brief highlights that cognitive impairment due to malnutrition, manifested by low school attendance and reduced educational attainment, results in lost employment and socialization opportunities throughout life. For example, the brief highlights that stunting and vitamin and mineral deficiencies together result in average losses of 3 percent of GDP in low-income countries.

The brief also presents the results of numerous previous studies that have highlighted the high economic returns from investing in nutrition programs. The FAO calculates that investing $1.2 billion annually provides a return of $15.3 billion (a benefit-to-cost ratio of 13 to 1). Additionally, the World Bank calculates that investing $7 billion annually over the next 10 years would allow the world to reach global WHO targets for reducing stunting and anemia in women by 2025.

Due to the scale of global malnutrition, spending needs to be prioritized, focusing on evidence-based and low-cost nutrition-specific actions to reduce undernutrition. Such interventions include universal salt iodization, the distribution of micronutrients through supplements, and staple food fortification. A recent paper estimates that the cost of providing 10 evidence-based nutrition interventions at 90 percent coverage in all of the world’s high stunting burden countries would amount to US$9.6 billion per year. However, these nutrition-specific interventions would reduce global wasting by 60 percent and global stunting by 20 percent, resulting in a return-to-investment ratio of 18 to 1.

In order to accelerate and sustain efforts to combat malnutrition in all of its forms, the Global Panel makes six broad recommendations. First, it is recommended that governments calculate the direct and indirect costs of malnutrition in all its forms in their own country. Suggesting that there should be a commitment to link regular updates to costing of interventions and parallel estimates of economic benefits accrued. Second, standardized metrics should be developed that are comparable and easy for policymakers to understand and apply. There are currently numerous competing methodologies that estimate costs and benefits but still do not provide enough evidence on how to prioritize investments. Third, context-specific, scalable, and viable programs across the global food system need to be identified and implemented. Programs that are both likely to have a large impact and are also cost effective should be prioritized. Fourth, a national Common Results Framework should be established to monitor and report on global progress in the fight against malnutrition. One objective should be the comparison of programming alternatives based on price per unit for a corresponding change in nutrition outcomes. Fifth, governments should invest in mechanisms that can support their own learning about alternative investments along the food chain, including strengthening national nutrition and food security information and surveillance systems. Finally, governments should address knowledge gaps and data deficiencies regarding the costs and benefits of national investments in infrastructure enhancement for diets and nutrition, processing and food transformation, and wholesale and retail incentives for delivery of affordable and desirable nutritious and healthy foods.

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