Question

please briefly comment on the following questions in 100 words

Direct transfers of food aid would be more effective than food subsidies to improve nutrition in developing countries." Argue whether you think this statement is true or false.

Answer 1

This statement is true.

I agree with the statement that direct transfers of food aid would be more effective than food subsidies to improve nutrition in developing countries.

We can see that although the consumer's welfare is more when he receives a lump-sum amount of the same value as food coupon, however, in order to ensure optimal intake of nutritious food direct transfer of food aid is preferable.

Most of the poor people who need food aid are not literate enough to understand the importance of intake of nutritious food. Chances are that the person may spend the lump-sum aid amount on goods such as alohol. That is why it is important to provide food aid instaed of transfer of a lump-sum amount of equal value.