Universal Flour Fortification in
China: The Economic Case
Joseph M. Hunt
Harvard School of Public Health
Great Hall of The People
Beijing 10 May 2006
INVESTMENT IN NUTRITION
Direct Effects Indirect Effects
Near-Term Long-Term (Cognitive
(Improved (Size, Stature) Ability,
Intakes) Schooling)
PRODUCTIVITY EFFICIENCY EQUITY
ENHANCED HEALTH, EDUCATION, AND LABOR PRODUCTIVITY
ECONOMIC GROWTH AND NATIONAL DEVELOPMENT
OVERVIEW
WHY INVEST IN FLOUR FORTIFICATION?
• Moral Commitments (MDGs)
• Reduce Huge Economic and Mortality Costs
• Reduce Poverty
• Improve Educability and Productivity
• Raise Economic Growth
• Flour Fortification helps all of the above –
cheaply)
Fortification Can Protect Millions for Pennies
Per Person Per Year
• Adding iron to flours and other foods reduces maternal
deaths, improves energy and productivity of adults, and
prevents childhood cognitive loss that leads to
performance deficits in the school and workplace.
• Adding Folic Acid to wheat and maize flours can cut
birth defects by up to 50% and is thought to reduce a
number of chronic diseases including heart disease,
stroke, and some cancers.
Micronutrient status is very poor in the region
90
80
70
60
50
40
30
20
10
0
% of preschoolers, % of pregnant % of population at
anemic women anemic risk of Iodine
deficiency
East Asia Other Asia
The economic costs of under
nutrition are high: productivity losses
20 % 17
15
10 10
10 6 5
5
0
Protein-energy iron deficiency iron deficiency iodine deficiency
malnutrition (heavy labor) (blue-collar labor)
(moderate
stunting)
Current losses in productivity (manual labour)
Losses based on childhood malnutrition (cognitive)
Source: Horton 1999
As are the economic costs of
diet-related chronic disease
China’s economic cost of diet-related
chronic disease is 2.4 percent of GDP
3
2.5 2.4
2
China
1.5
Sri Lanka
1
0.5 0.3
0
% loss in GDP
Note: GDP loss likely to be much higher when taking
into account morbidity Popkin, Horton and Kim 2000)
Percentage Loss in GDP due to Iron Deficiency
Cognitive
4.05 losses only
4
3.5 3.48
3 Cognitive losses
2.5
+ loss in manual
2 1.9
1.3 work
1.5 1.1
1.1
1 0.8 0.9
0.5
Bangladesh India Pakistan Ten Countries1
Source: Horton 1999, Horton and Ross 2001
1 Bangladesh, India, Pakistan, Mali, Tanzania, Egypt, Oman, Bolivia, Honduras, Nicaragua
Estimates (10 countries)
– Productivity effects: B/C ratio = 6.3
• When discounted future benefits attributable to
cognitive gains are included, median B/C ratio =
35.7
• Cognitive effects 6X higher than Prod’y
• Wage increase $17/capita/year
• Annual P.C. iron fortificant cost = $0.12
• Simulation ignores social costs of maternal
deaths and health costs attributable to
prematurity (Horton/Ross 2001)
Productivity Losses due to Iron
Deficiency Anemia
10 Year Productivity Impact of IDA (Millions USD)
Future Losses Current Labor Losses Total
Child Cognition Blue Collar Heavy Manual
China 1,486 3,830 8,165 13,481
Vietnam 410 295 707 1,413
Thailand 254 1,298 435 1,987
Indonesia 1,948 1,428 2,379 5,755
Pakistan 1,709 352 821 2,882
Total 5,807 7,203 12,507 25,518
Based on National Prevalence of
Anemia and Demographic Screens
RETA 5944
Cognitive Impact of
Improved Iron Status in Children
Canada: Moffit et 6.3
al (1994)
Indonesia: Pollitt 18.4
et al (1993) 18.8
USA: Oskig & 6.8
Honig (1983) 7.5
Mental Motor
Chile: Walters
(1983) 10
Costa Rica: 9.3
Lozoff (1985)
Added Points on Bayley Scales
Human costs of diet-related chronic
disease in China
1995 2025
• 2.5 m deaths (43.2% • 7.63 m deaths (52.0%
of all deaths) of all deaths)
• 1.04 m cancer deaths • 3.77 m cancer deaths
• 0.35 m CHD deaths • 1.45 m CHD deaths
• 1.11 m stroke deaths • 2.41 m stroke deaths
The Nutrition Transition University of Toronto
The University of North Carolina
at Chapel Hill
Underlying Trends Leading to Increased
Non-communicable Diseases
• Fetal and infant insults interacting with subsequent
shifts toward positive energy balance
• Shifts in the structure of diet
• shifts in physical activity
• obesity trends
• morbidity and mortality shifts
The Nutrition Transition University of Toronto
The University of North Carolina
at Chapel Hill
China Can Lead Asia toward
Universal Flour Fortification if…
• Production expands beyond the NW
• Free Trade Agreements with ASEAN and
SAARC are used to export premix w/o tariffs and
VATs (Public Good)
• China reduces cost of premix and assuring safe
product (Efficiency)
• Cheaper Chinese flour promotes access through
trade (Productivity)
• Secures Asia-wide market for Iron EDTA as a
Chinese export product to halve global anemia
(Equity)
China Flour Fortification
w/ Iron & Folic Acid
Background: 10-Year Cost (NW) $184,125,000
• High consumption in northwest Est. 3-yr Donor Participation 5%
10-Year Benefits
• Increasing share of large mills IDA Reduction (NW Provinces) 30%
• Product development complete Deaths Averted 32,000
Productivity from Reduced IDA $538,150,000
• Effectiveness trials ongoing FAD: Saved Earnings/Health Care $5,195,000
• Awarded $3 million GAIN grant Benefit-Cost Ratio 3
10-Year Plan:
• Expand NW province public distribution project to regional andhen
t
national strategy
• Raise quality standards and centralize production
• Major social marketing and targeting distribution to poor
CHINA- Efficacy: Flour
Fortification Reduces Anemia
50
45 baseline
40
6 months
35
intake of iron(mg/d.p)
30
25
20
15
10
5
0
Control group NaFeEDTA FeSO4 group Electrolytic iron
group group
groups
Results
• Subjects: 407 school children (11-18 yrs)
• Using 3 iron compounds, anemia was almost
eliminated using Iron EDTA, and was (about)
halved using other compounds
• Issue: Iron EDTA is 4 times more expensive
• Can the Chinese premix companies produce
Iron EDTA for the Asian market, lowering costs
to poor Asian families?
Fortification Mix as % Total Cost
• Wheat Flour
Pakistan 83, Indonesia 70, Thailand 70,
Viet Nam 56, China 55
• Soy Sauce
China 82
• Cooking Oil
Pakistan 87, Indonesia 80
• Fish Sauce
Thailand 94, Viet Nam 71
Relative Costs
Supplementation Fortification
• Vitamin A • Vit A cooking oil
Supplement $.04/C/Yr • $.06/ppy
Program $1.50/C/Yr
-------------------------------- -------------------------------
• Iron Folate Iron folate
Supplement: $.83/preg flour/condiments
Program $11-17/preg • $.08/ppy
Public share: 100% • Public share: 15%
Disability Adjusted Life Year
(DALY)
• A composite index of health linked to a
productive life usually referred to as “A
Year of Healthy Life Saved.” DALY is a
weighted index that takes into account
loss of life, morbidity, and disability and
their collective impact on productivity.
Nutrition & Health Investment which are Cost-Effective
DALY SAVED no mandate, no change
• Parallels NTD impact
• Source: Circulation (2006)
Rough Economic Estimates:
Benefits from Flour Fortification
• China – anemia, ID (-) : 2-3% GDP (+)
• VMD Report : Central Asia (China?) :
FAD (-) = 1% GDP (+)
• US birth defects $ 8B annually, halved by
folated flour = $4B savings. China: +++
• China: folate will reduce impact of rising
CHD, stroke cases, mortality (~ 1% GDP)
• Zinc reduces child deaths, stunting,
indirectly CHD
Building Consensus on Food
Standards Manila, November, 2001
We affirm:
• that the addition of
• white flour should include a
micronutrients to flour.. is a
basic package of micro
feasible, affordable and
nutrients according to the
efficacious method to
following guidelines as an
reduce key micronutrient
initial reference point:
deficiencies;
– 60 ppm iron
Therefore Pledge:
– 30 ppm zinc
• that governments and
– 2.5 ppm thiamin
producers should work
together towards a goal of – 4 ppm riboflavin
fortifying all flour consumed – 2 ppm folic acid
by populations at-risk.
Knowing is not enough;
we must apply.
Willing is not enough;
we must do.
Johann von Goethe
ADDITIONAL INFORMATION
Supporting the Economics
Presentation
“No other technology offers as large
an opportunity to improve lives … at
such low cost and in such a short
time …” World Bank (1994)
World Bank (1994)
Millennium Development Goals by 2015
MDGs place nutrition higher up on the
development agenda
1) Eliminate most of infant, 1 of 1000 pregnancies
• > 300,000 yearly worldwide
• Comprehensive, robust data
• Randomized controlled trials
• Consistent case-control studies
• Both multivitamins and folic acid alone
• Consistent genetic findings (MTHFR)
Changes in NTD incidence*
in Canada
Ontario (Gucciardi et al, 2002)
Canadian Congenital Anomalies Surveillance System and
hospital data on therapeutic abortions.
47% after FA fortification (1995-1999).
Nova Scotia ( Persad et al, 2002)
Retrospective study of live births, still births and terminated
pregnancies
54% after FA fortification (1998-2000)
Ontario (Ray J et al 2002)
42% after FA fortification (1988-2000)
Reduction in the incidence of neural tube defects
after folic acid fortification in Chile, (42%)
1.80
1.62
1.5
NTD/1,000 births
1.07
1.0 0.86 0.79
0.5
0
1999 2000 2001 2002 2003
Years
Medical and Rehabilitation
Cost Spina Bifida
Cost/Case Espina Bifida (2002 $ US)
Surgical correction 2,450
Rehabilitation (1 year) 4,555
Extended to 20 ys 100,209
Extended to 20 ys (3% Discounted) 74,763
Cost Savings per Spina Bifida
Case Prevented
• Surgical and rehabilitation cost extended to 20 years
of life per child with spina bifida was:
$ US 100,209
• Extrapolating this cost to the 110 infants with Spina
Bifida that were prevented by the program, the
average year- saving for the health system was:
$US 10,973,308
Changes in NTD incidence in Chile*
Pre-fort N=120,636 nac. (1999-2000)
Post-fort N= 117,704 nac. (2001- 2002)
Pre-Fort Post-fort RR (95% IC) Cambio
%
Anencephaly 6.14 3.65 0.60 (0.41-0.87) 40,6
46,8
Encephalocele 2.41 1.78
4.59 0.74 (0.42-1.30) 26,1
Spina Bifida 8.63 0.53 (0.38-0.74)
Total NTD 17.10 10.03 0.58 (0.47-0.73) 41,6
* cases/ 10,000. All live and stillbirths with BW > 500g in the 9 public
hospitals in Santiago. n=60,000 births/year; 25% of all births in the country
Figure 2: Prevalence (%) of stunting among children aged 2 to 6 years in Asian countries and the Republic of Fiji Islands.
These data are the most recent available for each country in the 1990s; e.g., 1993 for the Peoples Republic of China,
Indonesia, and Viet Nam
60
54.6
50 46.9
42.2
40
Percentage
30
24.0
20.8
20
10
2.7
0
Fiji Islands Sri Lanka People's Indonesia Bangladesh Viet Nam
Republic of
China
Sources: Fiji, data provided by the Pacific Commissions; Indonesia, Indonesia Family Life Survey (1993); Santa Monica CA: The Rand Corporation; PRC, People’s
Republic of China Health and Nutrition Survey (1993), http://www.cpc.unc.edu/projects/china/china_home.html; Viet Nam, Viet Nam Living Standards Survey (1992-
93) Washington DC: The World Bank. [AUTHORS PLEASE ADD SOURCES FOR BANGLADESH, SRI LANKA]
Figure 20: Actual (1990) and projected (2025) deaths by cause in the People’s Republic of China and India
1200
Death rates per 100,000 persons
1000
267
12
800 309 59
389
107
226
5
600
5 9
244
129 106
471
400
117
209
252
188
200
97
33
186
117 106 122
0
1990 2020 1990 2020
People’s Republic of China India
Cardiovascular diseases
Diabetes
Cancers
Other noncommunicable diseases
Infections and parasitic diseases
All others (injuries, maternal and perinatal conditions)
Source: Modified from Murray CJL and Lopez AD (1996) The Global Burden of Disease. Boston MA: Harvard University
Press.
Figure 30: Main pathways for dietary effects on chronic diseases,
in the People’s Republic of China, projected for 2025
Fruit/veg. as
Cancers 22.7%
% Diet
Saturated fat
IHD 32.3%
as % Diet
Overweight/ 33.1%
Stunting Diabetes
obesity
Low Birth- 24.5%
Hypertension Stroke
Weight
53.3%
Notes: Percentages next to boxes indicate the estimated minimum contribution of key diet factors to each disease
condition. IHD = ischaemic heart disease
Health Costs of Diet-related
Chronic Disease
• Costs of cancer, diabetes, hypertension, stroke,
CHD
• INCLUDES: human costs of early death,
economic costs of early death, economic costs to
health care system
• EXCLUDES: economic costs of lost days of work
and lower productivity due to morbidity
The Nutrition Transition University of Toronto
The University of North Carolina
187 at Chapel Hill
Economic Costs of Diet-related Chronic
Disease: China 1995*
Costs of lost $5.76 bn 0.8% of GDP
work – death
Hospital costs $11.74 bn 1.6% of GDP
Total costs $17.40 bn 2.4% of GDP
_____________
* excludes cost of work days lost and lowered productivity due to chronic illness
The Nutrition Transition University of Toronto
The University of North Carolina
at Chapel Hill