Offer subsidies for healthy food

  • Letters
  • Friday, 15 Nov 2013

THE furore over the removal of sugar subsidy has eased since it was first announced during Budget 2014 last month.

One rationale for this move is that it will encourage Malaysians to lead a healthier lifestyle by virtue of lower sugar consumption.

Health Minister Datuk Seri S Subramaniam said the government should never have subsidised sugar and that this move was a step in the right direction.

The background to this involves the burgeoning burden of non-communicable diseases (NCDs) and its impact not only on the health of the rakyat, but the increasing costs on our healthcare system and the economy.

The World Health Organisation estimates that NCDs kill more than 36 million people annually and they share four common risk factors: tobacco use, physical inactivity, excess alcohol consumption and unhealthy diets.

Locally, heart disease remains the common cause of death in Malaysia. Its risk factors, including diabetes and obesity, are also becoming more common; approximately a fifth of Malaysians have diabetes and 15% above the age of 18 are classed as obese. Equally worrying is that almost 500,000 children below the age of 18 are overweight.

With these facts in mind, it is not surprising that the government felt the need to intervene with a policy designed to alter individual behaviour.

The practice of providing subsidies for sugar is relatively uncommon, but governments do tinker with unhealthy food taxation.

Mexico, in which 70% of adults are obese, recently approved a soft drink tax and an excise tax on high-calorie packaged foods (like sweetened cereals and peanut butter).

This follows the famous move by former New York City Mayor Michael Bloomberg who has been attempting to limit the packaging size of sugary drinks. But do such fiscal policies work?

This week, the British Medical Journal published a study reporting that a 20% tax on sugar-sweetened drinks would reduce the number of obese adults in the United Kingdom by 180,000 people.

Such policies are meant to mimic tobacco taxation, which has contributed to the drop in tobacco consumption in developed countries.

However, it is worth noting that food taxation is more complicated than tobacco, particularly regarding the availability of product substitutes.

There are lessons to be learnt from the battle against tobacco though, namely that a multi-prong approach is necessary if one harbours any ambition of decreasing the prevalence of obesity.

One must recognise that whilst some government policies help “nudge” individuals towards desired behaviours, there will remain a significant number who will consume excess sugary food, irrespective of the hike in prices.

These individuals are far more likely to respond to education as information is power, and informed individuals would be better placed at making decisions that are right for themselves.

Such education and exposure should start at an early age through Physical Education and Living Skills lessons which should highlight the importance of a balanced diet.

In Singapore, overweight children are enrolled in the “Trim and Fit Programme” where they are offered intense exercise regimens. Our neighbour’s “Model School Tuck-shop Programme” goes further by encouraging school canteens to offer healthier food choices.

We must not forget that the causes of unhealthy eating are varied, and not limited to sugar consumption alone. The santan (coconut milk) in our nasi lemak and the oil in our roti canai are just as culpable in causing heart disease and obesity.

A more pragmatic step would be to use financial savings to offer subsidies or food vouchers for healthy food items.

Such policies would benefit the poor, who tend to be disproportionately affected in any tax increase or subsidy cut.

Fiscal policies need to be part of a more comprehensive approach involving education, dissemination of information, mass media campaigns, legislation and steps to encourage behavioural change at a societal level.

However, the cut in sugar subsidy in Malaysia is a welcome step and sends out a strong and symbolic gesture to the rakyat.


Institute for Democracy and Economic Affairs

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