˘ˇ ˆ · Food fortification is one of several strategies that can lift the tremendous human and economic burden of micronutrient deficiencies and malnutrition in Asia. And it is

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Developed by the Governments of Indonesia, Pakistan,People’s Republic of China, Thailand, and Viet Nam,

with Assistance from theAsian Development Bank and

The Keystone Center

June 2004

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THE ASIAN DEVELOPMENT BANK NUTRITION AND DEVELOPMENT SERIES

The ADB Nutrition and Development Series was started in 2001 by Dr Joseph Hunt and covers the impact ofmalnutrition in Asia and the Pacific on poverty and depressed human and economic development. The Seriesstresses three themes: targeting nutrition improvements at poor women and children, with benefits to families,communities, and nations throughout the life cycle; reviewing and applying scientific evidence about nutritionimpact for policies, programs, and developmental assistance that will raise the quality of human resources; and,creating opportunities for public, private, and civil sector partnerships that can raise the dietary quality of thepoor; and enhance the learning and earning capability of poor children. The Series is intended for ADB membercountries, development partners, and scholars interested in applying science and technology to investment decisions.

For more information please contact Dr Lisa J. Studdert: [email protected]; ph: (632) 632-4444; fax (632)636-2444.

Copyright © Asian Development Bank 2004

All rights reserved.

The views expressed in this book are those of the authors and do not necessarily reflect the views and policies ofthe Asian Development Bank, or its Board of Governors or the governments they represent. The Asian DevelopmentBank does not guarantee the accuracy of the data included in this publication and accepts no responsibility for anyconsequences of their use. Use of the term “country” does not imply any judgment by the authors or the AsianDevelopment Bank as to the legal or other status of any territorial entity.

ISBN 971-561-5120

Publication Stock No. 100703

Published by the Asian Development Bank, P.O. Box 789, 0980, Manila Philippines

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Improvements in human health lie at the heart of theMillennium Development Goals, which chartprogress in reducing poverty in the developing world.This book takes a novel approach to showing howhealth and mental development can be improved bystrengthening the food industry in Asia.

Based on an Asian Development Bank (ADB)investment planning exercise, five Asian countries(Indonesia, Pakistan, People’s Republic of China,Thailand, and Viet Nam) have identified foodsconsumed by the poor and estimated the benefits andcosts of fortifying those foods with essentialmicronutrients (vitamins and minerals). The resultsare stunning. For example, in the five countries whereiron deficiency anemia is a public health issue, avariety of food vehicles can deliver iron in a packageof micronutrients to one billion persons at $0.08 perperson per year. The benefits include reducedmaternal deaths among anemic women and normalbrain development among young children whosecapacity to learn in school and advance in workplaceachievement would otherwise be compromised.

This book synthesizes the findings of thecountry studies with interesting conclusions, such as:

• delivering essential micronutrients through thefood sector is good public health policy;

• fortification technology is proven, cheap, andeffective;

• fortification is part of an integrated strategy toimprove health but it definitely fills a niche;

• public-private partnerships create public goodsfor the poor but with efficiency gains arising fromprivate sector competition;

• benefits to human health and productivity areimpressive, at costs that match the best publichealth interventions;

• good food production technologies, supportedby legislative, regulatory, and trade reforms raisehuman capital through the market, and therebysave public health resources that can be put tobetter use, and strengthen Asia’s clout in globalfood trade; and

• governments, donors, and civil society are thecomponents of an important alliance to makefood fortification into a regional public good thatprotects human health and builds economies.

ADB is pleased to share the results of its regional workon food fortification with colleagues, and looksforward to further dialogue with partners on how tomake applied food science and technology availableto Asia’s poor consumers. This marriage of industrialand health policy is promising.

Geert van der LindenVice President

Knowledge Managementand Sustainable Development

Asian Development Bank

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The opportunity exists now to save more than aquarter of a million lives over the next 10 years inIndonesia, Pakistan, People’s Republic of China,Thailand, and Viet Nam by fortifying basic foods withvitamins and minerals. Reducing micronutrientdeficiencies via fortification will help to fueleconomies by lowering health care costs andincreasing worker productivity. Also, fortification willimprove the cognitive development of children, whichin turn will expand and sustain economicdevelopment for years to come.

Food fortification is one of several strategies thatcan lift the tremendous human and economic burdenof micronutrient deficiencies and malnutrition inAsia. And it is one of the most promising. Withsometimes half of a nation’s population sufferingfrom vitamin and mineral deficiencies, thefortification of common processed foods is anintervention that can protect large populations usingsustainable market channels. With food fortificationstrategies supported and maintained through themarket system, government resources and publichealth systems are freed to target the very poor whowill not be effectively reached and require differentintervention strategies.

This Investors Primer contains summaries ofCountry Investment Plans (CIPs) for Indonesia,Pakistan, People’s Republic of China, Thailand, andViet Nam. The CIP summaries outline proposed

fortification projects that, if implemented, wouldprotect more than one billion people in these fivecountries, every day. The consequent reductions inmicronutrient deficiencies are projected to unlockmore than $4.5 billion in national economic benefits.These vast health, social, and productivityimprovements can be leveraged through pump-priming investments of approximately $100 millionover 10 years.

To develop the CIPs, the Asian DevelopmentBank and The Keystone Center spent two yearscollaborating with multisectoral Country Teams inthe five countries of interest. The members of theCountry Teams conducted the relevant research andanalysis, and the CIPs they developed offer concreteand realistic fortification projects and define neededinvestments to improve health and build economies.The most up-to-date CIPs are available in theirentirety from the principal investigators for eachCountry Team, to assist in due diligence. (See AnnexA.) This document provides an overview of theinvestment opportunities, describes the analysis andconsensus on which the CIPs rest, and summarizeseach CIP project. The Country Teams are now workingto match their fortification projects with a widevariety of financial partners, including domestic andinternational corporations, industry associations,international aid agencies and bilateral donors, andprivate philanthropies.

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The special relationships formed in the course ofpreparing the Country Investment Plans willinfluence future partnerships within the five Asiancountries and with donor partners seeking to buildupon the findings of the plans. The country teamshave brought leaders in the public and private sectorstogether in a unique way, and all stakeholders areprepared to take the recommendations of their plansto full resolution. My appreciation for the countryteams, as well as the contributions of The KeystoneCenter for its strong advisory role to the planningprocess, is considerable.

I wish to acknowledge the contributions of thecountry team leaders and principal investigators: Dr.Dipo Alam and Dr. Hardinsyah, Indonesia; Mr.Mohammad Ayub and Dr. Abdul Kemal, Pakistan;Professor Yu Xiaodong and Dr. Sun Xuegong, People’sRepublic of China; Dr. Sangsom Sinawat and Dr. VisithChavisit, Thailand; and Dr. Nguyen Cong Khan andDr. Nguyen Xuan Ninh, Viet Nam. Their patientdeliberation and vision for a future free ofmicronutrient malnutrition are impressive.

The joint leadership of Tom Grumbly and JackBagriansky set the tone for the valuable contributionof The Keystone Center team, which brought acapacious intelligence and deep commitment toseeing the potential of food technology reach theneedy in all the countries. Keystone’s Brad Sperberprovided the careful and consistent management thatmade the regional and country consultations effectivefora for communications and decision-making. Thefollowing consultants provided an opportunity for thecountry teams to test state-of-the-art approaches tofood technology, planning, regulation, and economicassessment with a broad range of professionalexperiences across the world: Bienvenido Alano, PeterAdler, Jack Fiedler, Quentin Johnson, Rose Nathan,George Purvis, Kevin Sullivan, Herbert Weinstein, andAbraham Varghese.

A new dialogue has opened in Asia, about theconvergence of industrial and health policy to solvenutrition problems that hold back the region. I lookforward to seeing the country plans being realizedand then replicated throughout Asia in the future.

Joseph M. Hunt

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Foreword ............................................................................................................................................. iiiPreface ................................................................................................................................................. vAcknowledgment ............................................................................................................................... viiExecutive Summary ........................................................................................................................... xi

Introduction ....................................................................................................................................... 1A Compelling Solution ................................................................................................................. 2A Focus on the Working Poor ...................................................................................................... 3Enhancing Market Development ................................................................................................. 4New Market Paradigm ................................................................................................................. 4Public-Private Partnerships for Program Success and Market Development ............................ 4

Chapter 1: ProcessBuilding Capacity, Consensus, and Collaboration ................................................................. 6National Ownership ....................................................................................................................... 7Collaboration among the Public, Private, and Civic Sectors ....................................................... 7Implementation ........................................................................................................................... 8Regional Capacity Building and Decision Making ...................................................................... 8

Chapter 2: MethodologyAn Analytical Framework for the Country Investment Plans .............................................. 13The Need for a New Framework for Analysis ................................................................................ 13Determining the Costs of Micronutrient Malnutrition ................................................................. 14Projecting the Benefits of Fortification ......................................................................................... 15Conservative Approaches ............................................................................................................... 17

Chapter 3: ProductCountry Investment Plans and Supporting Information ..................................................... 19Two Environments for Flour Fortification in Asia ...................................................................... 20New Products to Address Micronutrient Malnutrition in Asia:

Fish Sauce and Soy Sauce Fortification ................................................................................... 24Investing in Complementary Foods: New Approaches to Reaching the

Most Vulnerable Population in Asia ........................................................................................ 31Developing the Case for Oil Fortification .................................................................................... 58Indonesia CIP Summary .............................................................................................................. 34Pakistan CIP Summary ................................................................................................................ 36

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People’s Republic of China CIP Summary ................................................................................... 39Thailand CIP Summary ............................................................................................................... 42Viet Nam CIP Summary ............................................................................................................... 44

Annex ABiodata for Key Contributors ................................................................................................... 49

Annex BConsensus Statements from Project Workshops .................................................................... 55

Annex CEstimation of the Impact of Vitamin A Fortified Foods on the Prevalence of

Vitamin A Deficiency ............................................................................................................ 67

Annex DEstimation of the Impact of Iron Fortification on the Prevalence of Anemia ................... 71

Annex EThe PROFILES Model: Underlying Principles and Assumptions ......................................... 75

Annex FProduct Profiles .......................................................................................................................... 81

Annex GGlossary ....................................................................................................................................... 83

Annex HAcronyms .................................................................................................................................... 84

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The persistence of micronutrient deficiencies in Asiais alarming and is damaging to lives and economies.The Asian Development Bank (ADB) has assistedfive Asian nations in identifying ways to eliminatethese deficiencies. In Indonesia, Pakistan, People’sRepublic of China (PRC), Thailand, and Viet Nam,the lack of dietary micronutrients—including keyvitamins and minerals such as iron and vitamin A—will take a toll of more than one million lives overthe next 10 years. In addition to causing the loss ofprecious human life, these vitamin and mineraldeficiencies depress cognitive and physicaldevelopment in young children, stifling educationalperformance and depressing future productivity. Inadults, iron deficiency anemia (IDA) causes adebilitating fatigue that lowers work output in theagriculture, construction, and other manual-laborand blue-collar sectors. Even greater losses aresuffered from low cognitive development in earlychildhood that depresses schooling achievementand later professional wages as white-collar workers.In these five countries, the 10-year productivity lossassociated with IDA alone is projected at more than$25 billion.

An effective mix of low-cost food-based,pharmaceutical, behavioral, and public healthinterventions can offer substantial protection fromvitamin and mineral deficiencies. Food fortification—the addition of minute quantities of vitamins andminerals to common processed foods—can protectlarge populations that are often beyond the reach ofhealth systems. ADB and the World Bank haveidentified micronutrient interventions as among themost cost-effective of development investments.

From August 2001 through mid-2003,multisectoral Country Teams from Indonesia,

Pakistan, PRC, Thailand, and Viet Nam participatedin ADB’s Regional Initiative to EliminateMicronutrient Malnutrition through Public-PrivatePartnership. The five participating countries eachproduced 10-year Country Investment Plans (CIPs),which propose national food fortification programsto reduce the high prevalence of micronutrientdeficiencies.

Over the next 10 years, the 14 fortificationprojects proposed in the five CIPs are projected to savemore than 280,000 lives and reduce the economicburden with estimated savings of more than $4.5billion. The total cost of these interventions is aboutthree-quarters of $1 billion, most of which is absorbedby the food market. International investments ofapproximately $100 million are sought, mainly toprovide incentives for initial investment in productionand the building of critical public systems, includingregulation, monitoring, and public education.

The CIPs were developed through a collaborativeprocess of cross-sector information sharing, capacitybuilding, advocacy, and financial and public healthanalysis. The plans are the result of two years workby the five Country Teams, with technical assistancefrom ADB, the US-based nonprofit The KeystoneCenter, and other national and regional institutions.The Country Teams, whose membership reflects thebreadth of public, private, and civic society, undertookthe actual analysis, identified priorities, andrecommended investments. This national ownershippositions the CIPs for successful implementation.

The CIPs are founded on a regional consensusregarding the need for regulatory and trade structuresto support investment in fortification. In a series ofworkshops, Country Team participants developedconsensus statements that encouraged the building

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of regional institutional capacity in food qualityassurance, nutrition monitoring, communications,and advocacy.1 Participants in these multisectoralworkshops also adopted regional guidelines forfortified flour, oil, and “complementary” foods. *

The specific fortification projects outlined in theCIPs were identified on the basis of a feasibilityanalysis assessing industrial capacity andcommercial potential in each country, as well as theprojected impact of fortification on the prevalence ofmicronutrient deficiencies. A benefit-cost analysismodel, developed specifically for the project, providescountry-specific information regarding:

• implementation needs, capital investments, andrecurring costs;

• government costs for food control, publiceducation, and monitoring systems;

• best estimates for the protection of low-incomeand at-risk consumers based on consumerintake, industry coverage, and other factors;

• projections for reductions in the nationalprevalence of IDA and vitamin A deficiency(VAD), and estimated impacts of the additionof dietary folic acid; and

• a financial summary reviewing benefits andcosts on annual and 10-year bases.

All five CIPs include a recommendation for investmentin wheat flour fortification. In Pakistan and the westernprovinces of the PRC, flour products are staple foodsconsumed throughout rural and low-incomepopulations. Given the high flour consumption amongthe poor, fortification promises significant reductionsin IDA and folic acid deficiency (FAD). However,upgrading the traditional marketplace, includingolder production facilities and multiple smallproducers, represents a challenge for public policyand implementation. In Southeast Asian countries,centralized and modern flour production means thatfortification technologies can be implemented in arelatively straightforward manner. The benefit-costratios for the flour fortification projects proposed inthe CIPs range from nearly 2:1 to more than 9:1, but

approach the higher estimate when subsidies offortificant costs to the flour industry are eliminated.

While rice fortification in Asia presents anumber of technical barriers, the recent developmentof technology to fortify fish sauce and soy sauce offersan alternative strategy to protect rice-eatingpopulations against IDA, including rural and low-income people. The CIPs for PRC, Thailand, and VietNam propose fortification strategies with estimatedreductions in the prevalence of IDA of up to one-third.The projected 10-year benefit-cost ratios range from7:1 in Thailand to nearly 12:1 in Viet Nam. These newfood fortification vehicles have already undergone athree-year process of technical development, producttesting, consumer acceptance, and effectiveness trials.

Micronutrient deficiencies in children aged 6-24 months represent a grave threat and a critical need.Young children who are micronutrient deficient arelikely to be underweight, have their growth stunted,perform poorly in school, and earn wages later in lifewell below their potential. They also often dieprematurely.2 The CIPs for Indonesia, PRC, Thailand,and Viet Nam offer distinct approaches to reachingthis critical segment with fortified complementaryfoods for young children via new partnerships, newproducts, and new marketing systems. These foodswill help to optimize child growth and mentaldevelopment during life’s “window of opportunity,”i.e., the first 2 years. The approaches range fromcapitalizing on available but unused productioncapacity to the development of new rural foodenterprises. Proposals for blended public-privatedistribution systems promise penetration into themost at-risk areas. Projected coverage ranges from15% in rural Viet Nam to 50% in rural Indonesia and100% of the most at-risk children in selected westernprovinces of the PRC. By targeting the mostvulnerable populations in Asia at this critical time intheir lives, the returns in lives saved will beconsiderable, and the savings in reduced sickness andfuture productivity will be enormous.

Finally, the fortification of cooking oils inIndonesia, Pakistan, and PRC with vitamin Apromises significant benefits in the reduction of child

1 The consensus statements are available in Appendix B, p. 101 ff.* Complementary foods are semisolid foods fed to infants and very

young children as a complement to breast-feeding or commercialor homemade formula.

2 Underweight preschoolers are at highest risk of premature death.Complementary foods address underweight and micronutrientdeficiencies simultaneously, thus reducing two critical risk factorsfor mortality.

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mortality and health care costs. Public healthprograms have done a good job of distributingvitamin A capsules twice a year to children under theage of five, and the clinical form of VAD that leads toblindness has been reduced. But the absence of staplefoods enriched with vitamin A leaves a third of Asianchildren with subclinical VAD, which is the principalrisk factor in the mortality of young children withcommunicable diseases like diarrhea and measles.That is why fortified staples like oil are essential toachieving the United Nations’ MillenniumDevelopment Goal (MDG) of reducing under-5 childmortality by two-thirds by 2015. Given the centralizednature of the vegetable oil industry, the projectedexpenses for industrial upgrades and governmentfood control and regulation are relatively modest.However, a number of technical issues remain to beresolved. Based on positive feasibility assessments fornational programs in the three countries, productdevelopment and testing are proposed.

This Investors Primer provides an overview ofthe investment opportunities widely available in Asia

to reach the poor through micronutrient enrichmentof dietary staples. The table on the following pagesummarizes the 14 specific projects proposed in theCIPs, and each of these projects is discussed in moredetail in Chapter 3. These food fortification initiativescan contribute to the MDGs for health, includingreducing infant, under-5 child, and maternalmortality rates, reducing hunger, and helping toensure that children complete their primaryeducation (by raising their cognitive capacity).

The key to fortification is its flexibility indelivering benefits within current food patternsacross the region. Fortification of a few food vehicles(such as flour and condiments) in just five countries,along with $80 million in seed financing and almost$700 million in domestic financing over 10 years,could deliver iron and folic acid to one billion peopleat a cost of about eight US cents per person and abenefit-cost ratio of about 6:1. A real bargain! Theinvestment model for selected countries provides acompelling case for resource mobilization in theregion.

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Summary of Costs and Benefits for the 14 Fortification Projects Proposed in the CIPs(in $ thousands and thousands of deaths averted)

Health Impacts

Country Projected Projected Health Careand 10-Year 10-Year Deaths Cost Productivity Seed FinancingProject Costs** Benefits Averted Saved*** Gained**** Request

($ ‘000) ($ ‘000) ($ ‘000) ($ ‘000) ($ ‘000)% of 10-

Amountyear cost

Indonesia

Wheat Flour 20,586 104,134 111 924 103,210 24% 4,852,770

Cooking Oil 60,372 666,377 44 555,802 $110,575 22% 13,396,889

Comp. Foods 67,138 27% 17,928,440

Pakistan

Wheat Flour 165,594 337,862 38 9,603 328,259 22% 37,006,536

Cooking Oil 35,833 138,260 42 18,234 120,026 22% 7,836,512

PRC

Soy Sauce 240,238 2,250,238 0.5 2,250,056 1% 3,071,000

Wheat Flour 184,125 543,346 32 5,195 538,151 5% 8,702,000

Comp. Foods 14,323 36% 5,162,170

Thailand

Fish Sauce 24,463 160,725 0.014 160,725 5% 1,221,952

Wheat Flour 2,759 13,404 5 384 13,019 18% 490,739

Comp. Foods 3,796 14% 525,614

Viet Nam

Fish Sauce 21,740 257,825 0.8 257,825 19% 4,089,300

Wheat Flour 3,815 37,104 8 2,216 34,889 18% 669,926

Comp. Foods 43,637 15% 6,516,161

Totals 759,347* 4,509,275 281 592,358 3,916,735 13% 81,337*

* Totals are exclusive of complementary foods proposals. Sums in Table 7 include complementary foods proposals.

** Costs are broken down in more detail in Table 7.

*** Health Care Costs Saved through lower utilization of health care services by children and/or adults.

**** Gained Productivity from: (a) higher future productivity due to improved cognitive development in children; (b) higher current productivity in adults engaged

in blue collar and heavy manual labor; and (c) discounted future lifetime earnings of children whose deaths were averted.

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Dietary deficits in minute amounts of key vitaminsand minerals, known as micronutrients, haveemerged as the most widespread and devastatingnutritional deficiencies on earth. The crushing impactof micronutrient malnutrition on survival, growth,health, intelligence, and productivity has been welldocumented. Worldwide, more than three billionpeople are prevented from achieving their fullpotential as students, parents, workers, and citizensdue to micronutrient deficiencies. Three fourths ofthose affected are in Asia, where vitamin A deficiency(VAD), folic acid deficiency (FAD), and iron deficiencyanemia (IDA)3 represent a serious burden on publichealth and national development. Table 1 shows thepercentage of the populations of Indonesia, Pakistan,People’s Republic of China (PRC),4 Thailand, and VietNam that suffers from VAD and IDA, as reported bythe Country Teams that developed the CountryInvestment Plans (CIPs) summarized in this report.

In these five nations, more than one millionpeople are projected to die in the next 10 years due to

dietary deficits in iron and vitamin A. Children underthe age of 5 with compromised immune systems as aconsequence of VAD will succumb to a variety ofinfections. Anemic women will die in childbirth. Table2 outlines the projected number of deaths attributableto micronutrient deficiencies in each country ofinterest over the next 10 years, as estimated by theCountry Teams.6

Beyond causing the loss of precious human life,vitamin and mineral deficiencies cause immensesuffering and impose large economic losses on Asiansocieties. The debilitating fatigue and weakness ofanemia causes lower work output in the agriculture,construction, and other manual-labor and blue-collarsectors. The lack of iron in the diets of young childrenimpairs cognitive growth, intelligence, and schoolperformance, which ultimately translates into futureproductivity deficits.

Table 3 reveals that, in the five countries analyzedfor this report, the 10-year productivity lossassociated with iron deficiency anemia is projected

3 Figures are drawn from the Country Investment Plans.4 IDA refers to anemia due to a lack of iron intake, as opposed to

other factors like malaria or parasitic diseases.5 Note that, throughout this report, the figures for the PRC reflect

data only for its 12 northwestern provinces, unless otherwise noted.

6 Insufficient folic acid will cause needless birth defects and coronaryheart disease (CHD). While averted cases are projected in the CIPs(based on evidence from Canada and the United States), there isno established relative risk of morbidity or mortality in theseinstances. Therefore, folic acid is not included in Table 2.

TABLE 1: Percentage of the Population with Vitamin A Deficiency and Iron DeficiencyAnemia in Five Asian Countries5

Indonesia Pakistan PRC Thailand Viet Nam% % % % %

Vitamin A DeficiencyChildren 6-59 Months 50 24 28 20 22

Iron Deficiency AnemiaPregnant Women 51 41 31 22 53Adult Females 40 40 22 18 40Adult Males 20 29 15 16 16Children 41 51 17 25 45

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TABLE 3: Projected Ten-Year Productivity Impact of IDA($ million)

Future Losses Current Labor Losses Total

ChildCognition Blue Collar Heavy Manual

Indonesia 1,948 1,428 2,379 5,754Pakistan 1,709 352 821 2,882PRC (NW)7 1,486 3,830 8,165 13,480Thailand 254 1,298 435 1,988Viet Nam 410 295 707 1,413

Total 5,807 7,203 12,507 25,517

TABLE 2: Deaths Projected to be Caused by Micronutrient DeficienciesOver a Ten-Year Period

VAD IDA

Children Mothers in Total< 60 months Childbirth

Indonesia 320,208 39,880 360,088Pakistan 432,043 41,920 473,963PRC (NW) 166,190 20,344 186,543Thailand 23,944 619 24,563Viet Nam 50,404 7,212 57,616

Total 992,789 109,975 1,102,773

7 In Table 3, the figures for the PRC reflect only the northwest provinces.

by the Country Teams at more than $25 billion. Thefortification projects proposed in this report could,according to Country Teams, prevent $3.9 billion ofthese losses.

The remainder of this introduction explains whyfood fortification is such a compelling and achievablesolution to the terrible consequences of micronutrientdeficiencies. Chapter 1 then discusses the capacity-and consensus-building process used to develop thefive CIPs summarized herein. It also includes excerptsfrom consensus statements developed at several keyworkshops along the way. Chapter 2 outlines themethodology used by the Country Teams todetermine the costs and benefits of the variousfortification proposals. (Annexes C, D, and E describethis methodology in greater technical detail.) Finally,Chapter 3 contains summaries of the five CIPs andsupporting information regarding the types offortification projects that are proposed. (Annex Fcontains brief profiles of each project.)

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Adding minute levels of vitamin A, folic acid, andother micronutrients to commonly consumed foodsmay offer one of the most sustainable and cost-effective strategies to deliver key micronutrients tothe large populations of low-income and at-riskpeople who desperately need them. The technologyis simple. Product quality is unaffected. Incrementalprice is usually invisible. And consumers are providedwith a significant percentage of their dailymicronutrient needs.

Since the early 1900s, fortification by a numberof food industries has played a major role in the nearelimination of vitamin and mineral deficiencies inmany industrialized nations. In the developing world,since a campaign to eliminate iodine deficiencydisorders began in the early 1990s, more than 30countries have implemented effective and sustainablesystems to fortify salt with iodine. The percentage ofthe global population with access to iodized saltincreased from 20% to 70% during the past decade,and public investment of $400 million has leveraged

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more than $1.5 billion of private investment in saltiodization, mostly from the salt industry. This istestimony to the power of well-articulated andtargeted joint action. In Latin America, countries havealso addressed other micronutrient deficienciesthrough fortification. For example, Guatemala hashalved the prevalence of VAD among its populationwith a national sugar fortification program. But formost of the developing world, food fortificationremains a vastly underutilized opportunity.

The viability of fortification as a feasible, cost-effective, and sustainable strategy for reducingmicronutrient deficiencies in Asia depends on anumber of success factors, including the following:• Access: an overlap in the consumption of

processed foods with the population at risk ofvitamin and mineral deficiency

• Product: a food vehicle that can delivermicronutrients in amounts that are bioavailable(i.e., can be absorbed and utilized by the body),safe, and effective, with no perceived orunacceptable changes in quality

• Production: industry with the technicalcapacity to efficiently produce, ensure thequality of, and distribute fortified foods to widemarkets, including low-income rural areas

• Business: a business and trade environmentthat is reasonably fair and stable, and anincremental price increase that does not affectprojected consumption by low-income consumers

• Governance: public institutions with thecommitment and capacity to ensure a levelplaying field, thereby ensuring the safety, quality,and consistency of the food supply andmonitoring health outcomes

In the five Asian countries discussed in this report,many—though not all—of these conditions existnow. And each CIP proposes to build capacity toexpand on these success factors for the future. TheCIPs work to capitalize on the overlap between thepopulation consuming processed foods and thepopulation at risk of micronutrient deficiencies.Each proposed fortification program is built on productdevelopment—either previously implemented orproposed—as well as a realistic analysis of industrialcapacity and the business environment. And in all ofthe CIPs, government commitment is clearly outlined

and the need for capacity building and reform isrecognized and addressed.

The resource needs articulated in each of the fiveCIPs reflect the different mix of existing successfactors. Some require outside resources to jump-startdomestic investment, production, and marketing,while others propose to develop the infrastructurenecessary for success. In all cases, the CIPs makeinnovative proposals for how to achieve results withinthe 10-year time frame. The CIPs indicate positivebenefit-cost ratios and high internal rates of return over10 years for all of the proposed fortification initiatives.

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From the perspective of governments working toreduce micronutrient malnutrition, fortification is anattractive and sustainable solution because it shiftsthe financial burden for addressing this serious publichealth problem to the marketplace. Market forcesdrive fortification; consumers ultimately finance itthrough small, essentially invisible changes in retailprice. Therefore, fortified foods will primarily reachthose people who have at least some money topurchase food (though some fortified foods may begiven away in specific public distribution programs).

Those who exist on subsistence diets and do notparticipate in the cash economy will probably notbenefit from this market-based intervention. Thatpopulation will continue to rely upon otherinterventions subsidized by the state in publicassistance programs—food-based, pharmaceutical-based, and other—to improve their diets. However,fortification will provide significant benefits to theworking poor—that vast group of individuals whohave jobs, raise families, drive the economy, andultimately determine the future productivity of theirnations. Their productivity expands economies, andtheir purchasing power makes fortificationsustainable.

Fortification is thus a “win-win” proposition—itimproves both economic development and healthprotection. It betters the lives of the working poor,which in turn fuels economic development. At the sametime, public health and welfare agencies can reallocatetheir resources and focus their activities specificallyto those individuals who are not served by fortificationand so continue to need public assistance.

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Because food fortification programs focusexclusively on people who purchase at least somebasic manufactured foods, participation in theseprograms can be seen as getting people “ready topurchase” other products. The programs cangenerate enormous goodwill as consumers see thatcompanies that sell fortified products are alsoimproving the quality of consumers’ lives. Bydelivering such clear benefits, companies will createa climate in which consumers will be more willing totry other product innovations. After all, trust andcredibility is at the heart of any consumer-companyrelationship. Therefore, a company’s successfulparticipation in a fortification program can help itinitiate or expand relationships and operationsthroughout Asia.

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For the low-income consumer, even small priceincreases present a tragic choice between betterhealth and a bit of savings. Because segments of themost at-risk populations cannot take advantage ofmarket-based solutions, many of the CIPs includenovel public-private partnerships to provide specialaccess, incentives, or pricing for the poor. These ideasare based on a concept of “dual markets” for fortifiedproducts: a self-sustaining, profit-oriented traditionalmarketplace, alongside a parallel “public-healthmarket” targeting the low income or at risk. (SeeFigure 1.) Revenue streams from the more affluentcommercial markets are invested in the new public-health market. This concept allows for investmentsin distribution and/or marketing networks that reachrural areas and public education projects that aim toincrease awareness and demand among the poor. Anumber of proposed projects in the CIPs thus featurepartnerships with innovative approaches to pricingand distribution for the public-health market,including:

• expanded commercial distribution to ruralareas;

• product distribution via government agenciessuch as the Ministry of Health (MOH);

• home sales visits and face-to-face education by

volunteers from nongovernment organizations(NGOs); and

• free public distribution programs and targetedsubsidies.

The dual-market approach offers a “win-win” forall involved. Poverty-focused partnerships amongcompanies, government agencies, and NGOs canexpand the marketplace and increase the total sumof consumers. As producers increase volume, unitcosts decline. Marketers and distributors canintroduce a new class of consumer to their products.Governments can open efficient new channels toserve the poor and at-risk. NGOs and other civilsociety organizations focused on health, education,or development can establish new programs and findsources of incentive and support for their volunteerson the ground. As low-income and at-risk individualsbecome everyday consumers, all sectors benefit.

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To be successful, fortification programs mustultimately be sustainable and market driven. Whendonor subsidies end, governments and privateindustries must be prepared to pick up the slack. Butgovernment priorities change. Nutrition may beimportant today, but other emergencies may takeprecedence in the future. In the face of these realities,it is critical that the markets and the private sectorplay long-term roles. While philanthropic foundationscan sometimes substitute for the public sector inhelping to build capacity for governance, in the longrun it is the public sector’s job to provide the neededgovernance mechanisms—regulation, standardsetting, and public education that pave the way forprivate-sector investment.

FIGURE 1: Dual Markets for Fortified Products

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The five CIPs outlined in this report, which carrythe endorsements of their respective governments,provide strong evidence of commitment to allocatingthe necessary public resources. What remains is to

augment that commitment with a focused mix ofinternational investments to ensure that thesefortification projects are equipped to achieve theirimportant goals and become self-sustaining over time.

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In February 2000, the Asian Development Bank(ADB) convened the Manila Forum 20008 toaccelerate national efforts to fortify common basicfoods with essential micronutrients in Asia and thePacific. Multidisciplinary delegations from eightcountries in the region gathered to learn from oneanother’s experiences, identify needs for technicalassistance, and test the need for regionaland international support. The Forum suggested theneed for multisector national teams to prepareinvestment programs, identify priority actions tocreate an enabling environment for fortification, anddevelop market mechanisms that could be self-sustaining over time. Regional consensus onfortification goals and strategies was recognized asthe precursor to concerted national action.

Building directly on the Manila Forum, ADBworked in consultation with public- and private-sector leaders in the region to launch the RegionalInitiative to Eliminate Micronutrient Malnutritionthrough Public-Private Partnership. This initiativewas enabled through cofinancing by theGovernment of Japan, the Denmark InternationalDevelopment Agency, and the International LifeSciences Institute. It has endeavored to identifyregional needs, build regional and national capacity,identify fortification priorities, develop appropriateprojects, and craft Country Investment Plans (CIPs)

to attract the seed investments necessary to developsustainable fortification markets that reachpopulations in need.

Five countries from the Manila Forum—India,Indonesia, People’s Republic of China, Thailand, andViet Nam—were joined by a sixth, Pakistan, informing Country Teams that include government,industry, academia, and civic-sector organizations.The ADB asked the US-based Keystone Center toassemble an international team of specialists inrelevant fields, including private- and public-sectorinvestment, health and nutrition economics,communications, trade and legislation, qualityassurance and food control, health surveillance, foodtechnology, and consensus building—to assist theCountry Teams with national planning and advocacy,design and lead regional workshops, and guide thedevelopment of the CIPs. (See Annex A for a completelist of project participants.)

The initiative used issue-specific workshops topromote the sharing of information and bestpractices, cultivate skills in investment planning,identify shared resource needs and strategicopportunities, and build skills in investmentplanning.9 (See Figure 2 for the timeline of keymeetings and workshops.) In addition, ADB and theUnited Nations Children’s Fund organized thesecountries’ participation in the PRC’s celebration ofreaching almost universal salt iodization, and theAsian nations learned valuable lessons about scalingup their own salt programs to reduce iodinedeficiency disorders.

9 The Government of India participated in these workshops, butreserved its official opinion regarding the consensus statements.

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8 ADB, Manila Forum 2000: Strategies to Fortify Essential Foods inAsia and the Pacific (Manila: ADB, 2002). A consensus statementsigned by eight countries from Asia and the Pacific region declaredreadiness to work toward the regional adoption of processed foodsthat are compatible with the dietary needs of the poor and withinternationally agreed-upon standards for the fortification,regulation, and trade of food products.

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The thorough consultative and technicalassessment process undertaken by these parties haspositioned the Country Teams for the successfulimplementation of the projects set forth in the CIPs,pending an appropriate mix of investments. Moreover,the process as executed has allowed for a regionalperspective on problems that are sometimesperceived by individual countries to be unique tothem. Understanding these crosscutting issuesenabled the Country Teams to share experiences anddiscuss the possibility of regional efforts to overcomebarriers to success.

The process of developing the CIPs emphasizedfour key elements.

1. National ownership of the CIPs by the CountryTeams and their governments

2. Collaboration among the public, private, andcivic sectors to gain the endorsement ofindustry, key national institutions, and NGOs,as well as the relevant government ministries

3. Implementation, each CIP presents realisticprojects with a likelihood of success

4. Regional capacity building and decisionmaking, common opportunities and challengescould be addressed with regional solutions

The remainder of this chapter provides detail on thesefour process elements.

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While this project, like many development efforts,relied on consultants for technical assistance, theCountry Teams themselves gathered the data,undertook the analysis, identified the priorities, anddeveloped the CIPs. Capacity building of multisectoralnational fortification teams and national ownershipof the CIPs are at the heart of this project. Therefore,although the CIPs do not always follow the sameformat, they all reflect a national perception ofopportunities and realities. For example:

• The Thailand CIP builds on a successful historyof public-private collaboration to propose anofficial Nutrition Seal—a national, collaborativesystem to develop, market, assure the quality of,and monitor fortified foods.

• Closely knit with civil society, the Viet Nam CIPproposes novel partnerships with NGOs thatprovide powerful new channels to governmentand industry leaders as well as to consumers.

• To fortify wheat flour in the poor northwesternprovinces of the country, the PRC’s CIP grappleswith the balance between vast potential healthbenefits and the realities of small communityproducers.

• Indonesia’s CIP considers options to protectdomestic millers that comply with mandatoryflour regulations from a flood of nonfortifiedand less-expensive flour.

• The Pakistan CIP addresses complex governanceissues and makes an innovative, albeitembryonic, proposal to deal with them in thecontext of a wheat fortification plan.

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At the project’s Inception Meeting in August 2001,Country Teams reflecting the breadth of public,private, and civic society began a year-longcommitment to conduct a national situation analysis,review data, consider policy and regulatory reforms,and undertake the financial analysis and initiate thepolitical mobilization necessary to both write a CIPand make it a reality. In many cases, the formationand operation of these Country Teams evolved newrelationships among government, industry, andacademia. For example:

• In the PRC, the Public Nutrition Center of theState Planning and Development Commissionbegan a serious dialogue with the wheat millingindustry.

• The Viet Nam Women’s Union (VWU) wasbrought into direct discussions on nutritionissues with the national Government and publichealth agencies of that country.

• The Indonesian wheat millers’ associationworked with Indonesian government agenciesto develop a national marketing campaign.

• In Thailand, the Ministry of Public Health andMahidol University opened a dialogue with thewheat milling and fish sauce industryassociations, as well as specific companies.

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• For the first time, an independent group ofPakistani economists provided an economicanalysis of fortification for a range ofgovernment ministries, including thosegoverning food and agriculture, health, andplanning.

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The multisectoral collaborative approach enabled afocus on implementation. The integral involvementof industry made it possible to consider thoughtfullyhow each program would actually be developed, whattimeline for action was possible, and how successwould be measured. Discussions among a variety ofstakeholders—which is still ongoing—yieldedpragmatic, strategic, and sometimes opportunisticdecisions. For example:

• The Vietnamese team concluded that oil andsugar fortification, while initially consideredpromising, failed the benefit-cost test undercurrent conditions. (See Annex E for a completediscussion of the benefit-cost test.)

• The Pakistani team came to the reasonableconclusion that fortification of flour from chakkimills—small stone mills exclusively servinglocal markets—was simply not feasible, at leastin the next 5 years.

• Testing by the Thai team concluded that vitaminA could not be cost-effectively added to driedbroken rice, a promising product that reachesyoung children from 6 to 36 months. However,they found that the project would be cost-effective and feasible if four other vitamins andminerals vital to child growth were added.

• The Chinese team concluded that flourfortification should focus on specific regionalmarkets prior to expanding to the national scaleand that mandatory legislation could not beconsidered until the final stages of the 10-yearplan.

• Indonesia concluded that, while palm oilfortification with vitamin A is uniquelyappropriate for a nation with 50% VADprevalence and one of the world’s largest crudepalm oil industries, product development andadvocacy should precede any major investment.

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As noted previously, ADB convened three regional,issue-specific, capacity-building workshops in Asiabetween August 2001 and October 2002—one eachin Bangkok, Manila, and Singapore. At theseworkshops, the multidisciplinary Country Teamsworked with ADB experts, a supporting team oftechnical consultants and facilitators from TheKeystone Center, and several invited specialists andstrategists to share information, build technical andanalytical skills, and chart a course for the region. Fromthese three workshops came consensus statementscovering five general topic areas that outline commonground, endorse provisional fortification guidelines,make technical recommendations, and define regionaland national actions necessary to acceleratefortification in Asia. The five topics are:

• legislation, regulation, and trade;• quality assurance, food control, and nutrition

surveillance;• wheat flour and cooking oil fortification;• regional cooperation and capacity building to

support food fortification; and• linking the expansion of processed complementary

foods to public health services that optimize childgrowth for children under the age of 2.

Participants’ key agreements on these topics aresummarized in the following sections. Annex Bcontains the complete consensus statements.

The consensus statements emerged from a sharedvision of micronutrient malnutrition as a serious publichealth problem and fortification as a key solution. Thefollowing are from the statement of the BangkokRegional Workshop on Trade, Regulation, Surveillance,and Quality Assurance of Fortified Food Products:

• Micronutrient deficiencies are causing seriousdamage to social and economic developmentthrough poorer pregnancy outcomes, impairedcognition (especially in young children),reduced work capacity, and increased morbidityand mortality from infectious diseases.

• Food fortification offers an effective, low-cost,and sustainable approach to reducing theprevalence of these deficiencies.

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• Col lab orat ionbetween government,private sector, and civilsociety is the key tosustained and effectiveimplementation of foodfortification to reducem i c r o n u t r i e n tdeficiencies. Mechanisms

should be defined collaboratively that pass all costsof fortification programs to the consumer as soonas feasible.

• While additional research and development isneeded to better define optimal fortificationapproaches, it is also recognized that nutritiondelayed is equivalent to nutrition denied, andtherefore countries of the region should moveforward consistent with the current evidenceand scientific consensus.

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While open and clear communication with the privatesector is critical, the Country Teams focused on thelead role of governments in establishing a trustingand enabling environment for food fortification. Theconsensus statements from the Bangkok and Manilaworkshops affirmed the following:

• National food laws and regulations should bereviewed and amended to ensure that theysupport and enable the addition of all essentialmicronutrients to appropriate food products.

• Public policies and regulations constraining orimpeding investment in food fortificationshould be reviewed and amended.

• Appropriate intergovernmental and/orinstitutional mechanisms should be establishedto implement effective policy in concert withpartners in industry and civil society.

• Countries should enhance current regulatoryframeworks and build capacity to implementfood control and enforcement functions in asystematic, transparent, and fair manner.

• National customs protocols and traderegulations should be revised or enacted tofacilitate the import and export of certified andsafe fortified foods.

• Taxes and duties on inputs to fortification as wellas taxes on domestically produced fortified foodproducts should be minimized in the case ofmandatory fortification programs.

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Workshop participants recognized the need to buildnational and regional quality assurance capacity toensure that food fortification efforts are effective, safe,and sustainable. Transparent food control monitoringand enforcement were recognized as essential.

Participants from the five countries10 urged theirgovernments to initiate programs to empowerinspectors and technicians. They felt this shouldinclude a range of incentives for food controlpersonnel, as well as penalties to enable personnel toenforce laws fairly and transparently. A combinationof improved recruitment, training, protocoldevelopment, and increased penalties should beimplemented, with a view toward zero tolerance ofcorruption in the inspection force and in industry.

The technical consensus focused on regionalcooperation and the harmonization of qualityassurance and nutrition surveillance methodologies.Participants from government and industry agreedon food control and enforcement approaches that relynot only on punitive measures but also on positiveincentives to the private sector for consistentperformance meeting fortification quality standards.Representatives of government health departmentsand participants from academia and researchinstitutions agreed on common regional protocols fornutrition monitoring, surveillance sampling frames,and biochemical indicators to produce reliable andregionally equivalent data on population micronutrientstatus. These guidelines for food control and nutritionsurveillance provided a foundation for planning andbudgeting these critical public functions in the CIPs.

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Technical workshops focusing on the fortification offlour and oil set out a vision that all flour and edible

“It should be publicpolicy to make availableto our populationsfoods fortifiedwith…criticalmicronutrients.”

Bangkok ConsensusStatement, April 2002

10 Indonesia, Pakistan, PRC, Thailand, and Viet Nam. India reservedits opinion.

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oils used in the preparation of staple foods, such asleavened and unleavened breads, noodles, pastas,biscuits, and other flour products, and consumed byat-risk populations in the region, should be fortified.Participants urged their governments to reviewregulations and policies that might impede thefortification of these products and recommendedappropriate mechanisms for government cost sharinguntil such time as the costs of fortification can be fullypassed on to the consumer. Perhaps most significant,the participants from government and privateindustry agreed on regional guidelines to provide astarting point for the consideration of flourfortification. The recommended basic fortificationpackage for flour includes iron and folic acid, alongwith several other micronutrients commonly addedto flour. (See Table 4.)

TABLE 4: Basic Recommended Fortification Package for Flour11

White Flour Brown Flour(PPM) (PPM)

Folic Acid 2.0 2.0Iron 60.0 60.0Riboflavin 4.0Thiamin 2.5Zinc 30.0 30.0

their consensus recommendations and theachievement of their shared vision. Participantsrecognized that the cost effectiveness and efficiencyof cooperative arrangements among regionalinstitutions would be critical to overcoming thesebarriers. The Country Teams’ consensusrecommendations include the development ofregional technical capacity, including:

• a regional food control and quality assuranceframework to accredit laboratories, develop andtrain inspectors and analysts, and promote fairand transparent regional trade;

• a regionwide framework for nutritionsurveillance to develop common guidelines andoffer an adequately staffed regional referencelaboratory; and

Participants also recommended that, where apublic health need is demonstrated, niacin, vitaminB

6, vitamin B

12, calcium, and vitamin A be added at

25% of the recommended daily allowance (RDA).Participants from the private sector affirmed thatfortification at these levels is technically feasible andthat there are no capacity constraints within theindustry. Similar guidelines were established for oilfortification with vitamins A and D.

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The Country Teams acknowledged that resource andskill constraints could hinder the implementation of

11 The basic recommended fortification package for flour wasnegotiated at the Regional Workshop on Flour and Cooking OilFortification. The Consensus Statement which articulates thepackage can be found in Annex B.

• “centers of technical excellence” to undertakeoperational research and product development.

A crucial area for regional cooperation andinvestment is in the production, distribution, andquality assurance of fortificant and premix. The fiveCIPs describe an expanding and potentially hugemarket for vitamin and mineral fortificants—morethan half a billion dollars over 10 years for the 10proposed wheat, oil, and condiment fortificationprograms. In fact, the fortificant mixes themselvesaccount for about 70% of all projected public- andprivate-sector fortification costs. (Table 5 shows thepercentage for each of the 10 projects individually.)Securing consistent access to the least-cost, quality-assured fortificant was a priority topic at a numberof workshops. Several consensus statementsrecommended that ADB and other relevantinstitutions explore investment in an expandingregional production complex—as well as strengthen

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regional and national public institutions to create anenabling and transparent business environment anda quality product.

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A workshop organized in collaboration with theInternational Life Sciences Institute (based inWashington, DC) and Mahidol University (based inSalaya, Thailand) focused on the critical need toimprove the nutritional status of children from 6- to24-months. While infants in developing countriesstart growth at average levels, between 6 and 24months the deterioration of nutrition indicators issevere. It was recognized that children in this agegroup have the highest rates of micronutrientdeficiency of any risk group. In addition to increasingthe risk of death, micronutrient deficiency duringthese critical months reduces cognitive developmentand is clearly associated with lower performance inschool and the workplace. In recognition of the specialneeds of these children, workshop participants urgedgovernments to:

• establish national goals for the production anddistribution of affordable complementary foods,and

TABLE 5: Cost of Fortificant Mix and Recurring Costs as a Percentage of Ten Year Projected Costs

Projected Total Fortificant MixCost of Project Cost of Fortificant as a PercentageOver Ten Years Mix Over Ten Years of Total Cost

($) ($) (%)

IndonesiaWheat Flour 20,586,000 14,350,000 70Cooking Oil 60,372,000 48,490,421 80PakistanCooking Oil 35,833,000 31,107,220 87Wheat Flour 165,594,000 137,415,000 83PRCWheat Flour 184,125,000 101,081,100 55Soy Sauce 240,238,000 198,030,000 82ThailandFish Sauce 24, 463,000 22,915,000 94Wheat Flour 2,759,000 1,925,000 70Viet NamFish Sauce 21,740,000 15,450,000 71Wheat Flour 3,815,000 2,135,000 56

Total 759,525,000 572,898,741 75

• integrate fortified complementary foods intopublic health, development, and child nutritionprograms.

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Regional public goods (RPGs) are increasingly seenas a viable option that developing countries and thedonor community should use to address compellingproblems with transnational scope. Infectiousdiseases that disrespect national borders, disputesover trade and fairness in international businesspractice, harmonizing regulations that govern theexchange of health goods and services (fortified foodsand essential drugs are the most compellingexamples), and establishing fair and consistent pricesfor essential goods at regional level, all aretransboundary development challenges that call forsolutions at a regional level.

RPGs respond to market failures, commonamong health-related policies and interventions,where investment particularly by the private sectormay be constrained by disproportionate benefitsaccruing to the poor and lowered profits that areexpected. RPGs stipulate the provision on nonrivalbenefits so that one country benefiting does notprovide obstacles to another also benefiting.

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Countries that do not pay for the RPG are not excludedfrom its benefits (i.e., benefits from an RPG are notheld by a selective “club” of stakeholders, and areinstead received by all parties). Also, RPGs reduceoverall transaction costs for delivering benefits byspreading responsibility and building regionalinstitutions that will assume the burden of sustainedcapacity building over the long term.

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The benefits of trade liberalization are oftenquestioned, not least because of the impasse at theCancun talks (September 2003) that stymiedprogress in reducing subsidies from the developedcountries to agricultural products, among other areas.Nevertheless, all countries are permeable to theinfluences of globalization, and two essentialcommodities needed by the poor—processed(fortified) foods and medicines essential for deliveryof primary health care—can benefit from tradebecause international standards of quality andtransparent pricing and product labeling are requiredby the World Trade Organization agreements.

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The recommended place to start is the influentialAssociation of Southeast Asian Nations (ASEAN), aneconomic bloc of 10 countries that has recently signeda free-trade agreement with the PRC that could verywell facilitate fair pricing, high quality, and universalaccess for commonly consumed commodities likeprocessed foods and essential drugs. This could wellspark an Asia-wide adoption of trade practices thatwill contribute to nutrition security and medicalprotection against fatal diseases for poor Asianfamilies, especially their children.

Based in part on the findings of this study, foodfortification is now recognized as an essential elementof national food policies in Asian and Pacificcountries to ensure nutrition security for all theircitizens. Asia is poised to apply food science and

technology in the food industry and make strides insolving the lingering micronutrient deficiencies(vitamins and trace minerals) that impede humandevelopment (and indirectly economic development)on a massive scale. A mature food industry in Asiawill soon be prepared to deliver micronutrientsthrough fortified foods at the population level,substantially reduce maternal and young child deaths,and also help children achieve optimal physicalgrowth and mental development at very low cost. Thetechnical costs of production are not prohibitive, asthis multicountry study demonstrates.

ADB has shown regional leadership inimplementing fortification programs in Central Asiaand helping mainland Asian countries define,through country investment plans, a niche for thefood industry to improve the health of the poor, aswell as the educability of their children, through thefortification of essential, commonly consumed foods.A variety of foods can deliver iron and reduce anemia(wheat flour, condiments such as soy and fish sauceand MSG), reduce vitamin A deficiency (cooking oils,margarine, sugar), reduce iodine (salt) and zincdeficiencies (wheat flour), and all forms of malnutritionwith infants and very young children (through multiplemicronutrient-enriched complementary foods).

The ASEAN-PRC free trade agreement offers anopportunity to move fortified foods in majorproduction systems throughout this region, and theproposed regional initiative would promote theharmonization of standards to effect rapid adoptionof fortified staples and to tap the power of regionaltrade to induce competition and institutionalizestructural reform packages that will raise thecredibility of ASEAN and PRC as formidable partnersin global food trade. Donors, working with the ASEANSecretariat, should examine how the Asian region cancreate common approaches to regulation, qualityassurance and food control systems, and trade.Harmonization of all regulatory and trade protocolsin the 11 nations with the Codex Alimentariusstandards for food safety and product labeling, as wellas the WTO agreements with its member states,should be the goal by 2005.

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The moral imperative to address the overwhelming andneedless human tragedy caused by micronutrientmalnutrition is clear. However, the successfulimplementation of food fortification to reducemicronutrient malnutrition rests with a more pragmaticimperative: attracting the necessary investment in publicand private capacity by making a clear and compellingbusiness and investment case. The Country InvestmentPlans are an attempt to do this. The CIPs are specific,concrete, and quantified. Each of the CIPs includes thefollowing elements.

• a public health situation analysis that includesprevalences of micronutrient malnutrition andtheir consequences as well as a review of existingpolicies, programs, and strategies, and theirstrengths and weaknesses;

• proposed fortified food vehicles selected on thebasis of industrial feasibility, commercial potential,projected consumption by the poor, and access andaffordability to low-income consumers;

• a defined production-sector strategy outliningimplementation needs, capital investments, andrecurring costs;

• an elaboration of government commitments andresponsibilities as well as capacity needs, includingprojected budgets for regulatory, food control, andnutrition monitoring and surveillance functions;

• best estimates for coverage and protection oflow-income and at-risk consumers based onconsumption, stability, and industry coverage;

• projections for the reduction in nationalprevalence of VAD and IDA, and estimatedimpacts of the addition of folic acid; and

• a financial summary reviewing benefits andcosts on annual and 10-year bases.

The CIPs represent a needed first effort to systematicallyquantify the inputs and outputs of food fortificationprograms. They include benefit-cost ratios and internalrates of return for each proposed food vehicle. Theanalysis undertaken to arrive at these figures is inchoateand complex and crosses many disciplines. Whiledetailed documentation is included in Annexes C, D, andE, a summary explanation of the methodology used isprovided in this chapter.

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Micronutrient malnutrition has received significantattention not only because of the harsh human toll, butalso because of the high economic costs to society andthe low costs of vitamins and minerals. A robust body ofliterature focuses on the financial burden imposed bywidespread micronutrient deficiencies—includingincreased morbidity and mortality, decreased cognitivedevelopment, higher health care utilization, and depressedproductivity. However, few models have projected theconcrete costs of the inputs needed to implementfortification, and fewer still have realistically estimatedthe potential benefits. For the CIPs, an analyticalframework to estimate benefits and costs was developed.This involved gathering evidence, defining critical gaps,and ultimately making educated assumptions based onthe best available information. This framework isproposed as a practical and immediate tool to identifypublic health and development priorities, make policydecisions, and take reasonable business risks.

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In the CIPs, the national costs of micronutrientmalnutrition were determined using an adaptedversion of PROFILES,12 a widely used tool for analysisand advocacy related to nutrition interventions. Thiswas augmented by a subsequent analysis by thedevelopers of this model.13 PROFILES is based onassumptions established from the analysis of a largenumber of scientific studies, and reflects the scientificconsensus on the devastating human, social, andeconomic consequences of micronutrient mal-nutrition. Some of the consequences are as follows:

• The relative risk of mortality among childrenfrom 6- to 60-months old with VAD is 1.75. Theeconomic cost of deaths arising from VAD is thenmeasured by the foregone wages earned.14

• Children from 6- to 60-months old with VAD sufferhigher rates of morbidity. Their relative risk ofclinic attendance is 1.19 and hospitalization is 1.84.The increased economic burden is based onnational rates of utilization and costs for clinic andhospital visits.

• As a consequence of anemia, cognitivedevelopment is impaired. Intelligence measuresin children generally drop by 7–8 IQ points (i.e.,0.5 standard deviation)—a change associatedwith a 4% loss of future earnings power. Lossesare projected at the average national hourly wage.

• Anemic adults engaged in heavy manual laborare 12% less productive than adults withoutanemia. For blue-collar workers the deficit is 1%.The impact for workers in less physicallydemanding labor is not measured.

The original PROFILES analysis included nocomponent to measure the impact of folic acid

deficiency (FAD). For this project, a preliminaryapproach was developed based on reports of theUnited States’ Centers for Disease Control and theCanadian Public Health Service15 and an analysis byTice, et al., published in The Journal of the AmericanMedical Association.16 This preliminary model, whichhas not been tested outside the CIP project, is basedon the US experience, in which an added daily intakeof approximately 100 micrograms folic acid hasprovided the following benefits:

• Neural tube defects (NTDs) are reduced by upto 30%. When national data was too sparse, arate of 4 NTD births per 10,000 was applied.17

Relative risk of death was taken from countrydata; where such data were not available, NTDchildren are presumed to die. Their lives aremeasured by 30 years of discounted earnings atthe average wage.

• CHD events are reduced by up to 13% for menand 8% for women, with comparable reductionsin CHD mortality. The costs of treating these aremodeled using national health care utilizationand cost data.

• A reduction in CHD events in turn results in acorresponding and proportionate reduction inthe number of deaths attributable to CHD. Whiledeaths averted were calculated, the modelassumes that CHD events occur after anindividual’s primary earning years. Therefore,no economic consequences were calculated.

These practical assumptions provide the frameworkfor calculating national economic benefits emergingfrom reduced rates of VAD, IDA, and FAD. The resultsare based on a number of specific relational variablesin the five countries, including prevalence ratesamong risk groups, demographic data, health care

12 Ross, J. and V. Aguayo, PROFILES Guidelines: Calculating the Effectsof Malnutrition on Economic Productivity, Health, and Survival(Washington, DC: The Academy for Educational Development,2000). Modified for this project by Bing Alano, Jack Fiedler, andJack Bagriansky, The Keystone Center advisors.

13 Horton, S. and J. Ross, “The economics of iron deficiency,” FoodPolicy 28 (2003): pp. 51–75.

14 This is estimated by the discounted earnings (at the average wage)up to age 50. The use of shortened productive years is to take intoaccount that not all survive up to retirement age. The estimate alsotakes into account the employment rate.

15 Honein, M.A., L.J. Paulozzi, T.J. Mathews, J.D. Erickson, and L.Y.Wong, “Impact of folic acid fortification of the US food supply onthe occurrence of neural tube defects,” JAMA 285 (2001): 2981–6.Also: Ray, J.G., C. Meier, M.J. Vermeulen, S. Boss, P.R. Wyatt, andD.E. Cole, “Association of neural tube defects and folic acid foodfortification in Canada,” Lancet 360 (2002): 2047–8.

16 Tice, J. et al., “Cost-effectiveness of vitamin therapy to lower plasmahomocysteine levels for the prevention of coronary heart disease:Effect of grain fortification and beyond,” JAMA (2001).

17 Personal communication with Dr. Godfrey Oakley, US Center forDisease Control and Prevention and Rollins School of Public Healthat Emory University, based on his global research and field work inthe PRC.

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costs and utilization rates, as well as a range of wageand labor statistics and other economic data. Forexample, the global assumption for the impact ofanemia prevalence on productivity is qualified bythe national situation, including the number ofwomen in the labor force, the proportion in heavymanual and blue-collar labor, and the averageannual wage. In this model, anemia in a full-timemother or an office worker presents no cost tosociety.

Each CIP proposes specific food vehicles to befortified at specific levels and estimates the totalnumber of metric tons (MT) fortified of each.Between 48% and 95% of the project costs arecomposed simply of the cost of the vitamins andminerals or the micronutrient mix that is actuallyadded to the food vehicle.

However, successful implementation depends ona series of significant investments in key public- andprivate-sector capabilities. These capabilities includethe following.

• advocacy, capacity building, and empowermentof government agencies through legislation andregulations to establish a positive marketenvironment;

• plant improvements, equipment purchases, andongoing quality control and other recurringoperational costs (A common basis for thisanalysis emerged from the Regional Workshopon Flour and Cooking Oil Fortification.);

• food regulatory and inspection activities (Forthis item, budgets are based on the estimatednumber of production sites and samplingfrequency to establish operational, analytical,and management costs. In some cases, the CIPspropose capital investment in building publiclaboratories. In other cases, the analysis isoutsourced to the private sector.);

• nutrition monitoring and biological evaluation(In many cases, these costs are based onconsensus methodologies developed at theRegional Workshop on Trade, Regulation,Surveillance, and Quality Assurance of FortifiedFood Products); and

• social marketing (National leadership advocacyand public communication were seen asessential to establishing a foundation ofconsumer support and awareness.).

See Table 7, at the beginning of Chapter 3, for asummary of the 10-year costs of the food fortificationprojects proposed in the CIPs.

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While the cost side of the equation may entail thefortification of 100% of a particular food, the benefitis determined by the amount of fortified foodconsumed by at-risk populations. A mix of nationalconsumption surveys and industry data, along withthe USDA Foreign Agricultural Service’s informationand the FAO’s Food Balance Sheets, was used toproject the potential consumption of fortified foods,with an emphasis on consumption by low-incomepopulations. To determine the projections for addedmicronutrient intake, the estimated consumption offortified food was essentially multiplied by the levelof fortification and other relevant factors (e.g.,vitamin stability, and products from small producersand the informal production sector, which are notconsidered “fortifiable”). Thus, the analysis arrivedat milligrams or micrograms of each micronutrientthat would be added to the daily intake of foodsconsumed by low-income and at-risk groups.However, the benefits of fortification are notmeasured by added micronutrients but by realreductions in the prevalence of micronutrientdeficiencies and the subsequent functional benefitsin health and performance.

Prevalence reduction thus drives the benefitcalculations. In the case of fish and soy saucefortification proposed respectively by the Viet Nam andPRC CIPs, the projections for prevalence reduction werebased on the results of large-scale effectiveness trials.In the other CIPs, however, the uncharted leap fromestimates of added micronutrient intake to projectionsfor reductions in prevalence was based on amethodology developed for this project. Thismethodology, which is described in Annex C, is basedon a review of the best available evidence.18

• Projected reductions in VAD are based onstudies documenting consumption, addedmicronutrient delivery, and changes in

18 For a full elaboration of the proposed approaches to projectingprevalence reduction, please see Annex C.

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prevalence after national sugar fortification inGuatemala and large-scale MSG fortificationmarket trials in Indonesia.

• Reductions in NTDs and CHD are based onchanges measured in the US and Canadianpopulations after national flour fortificationincreased the average per capita intake of folicacid by 100 micrograms per day.19

• Since data from iron fortification programs arelimited, the projected reductions in irondeficiency anemia prevalence are based on apublished meta-analysis reviewing the impactof 35 supplementation trials in Africa, Asia, andLatin America.20

The CIPs project reductions in the nationalprevalence of IDA or VAD for each of the 14 proposedfortification projects. The projected reductions rangefrom 1% to more than 30%. Table 6 outlines the

expected 10-year benefits of these improved nationalprevalences. The same assumptions and calculationsused to estimate the prefortification costs ofmicronutrient deficiency are used to measure theremaining postfortification losses. As illustrated inTable 6, this results in specific projections for benefits,or costs to society averted. Having calculated specificbenefits and costs, annual and 10-year benefit-costratios and internal rates of return can be specified.22

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Improving the physical and mental growth of childrenunder age 2 in developing Asia is a great challenge topublic health programs and to private sectorapplications of food science and technology for youngchildren, including the processed food industry. Theenormous problems of stunting and multiplemicronutrient deficiencies in very early childhood are

19 Tice, J. et al., “Cost-effectiveness of vitamin therapy to lower plasmahomocysteine levels for the prevention of coronary heart disease:Effect of grain fortification and beyond,” JAMA (2001).

20 Beaton, G. and G. McCabe, Efficacy of Intermittent IronSupplementation in the Control of Iron Deficiency Anemia inDeveloping Countries (Ottawa: Micronutrient Initiative, 1999).

21 High returns relative to other countries are due to the highestreported VAD prevalence in children in the region (over 50%) aswell as the structure and costs of health care utilization. This figureremains under review.

22 These 10-year projections take into account the time lag betweenthe consumption of fortified foods and functional benefits. Forexample, it is assumed that added iron received via fortificationwill not impact anemia prevalence until 12 months after regularconsumption of fortified foods begin.

TABLE 6: Projected Ten-Year Benefits of Projects Proposed in the CIPs(in thousands of deaths averted and US Dollars)

ProductivityHealth Care Saved/

Project Costs Saved GainedVehicle Micronutrient Deaths Averted ($ ‘000) ($ ‘000)

IndonesiaWheat Flour Iron and Folic Acid 111 924 103,210Oil Vitamin A 44 555,80221 110,575PakistanWheat Flour Iron 38 9,603 328,259Oil Vitamin A 42 18,234 120,026PRCSoy Sauce Iron 0.5 2,250,056Wheat Flour Iron and Folic Acid 32 5,195 538,151ThailandWheat Flour Iron and Folic Acid 5 384 13,019Fish Sauce Iron 0.014 160,725Viet NamFish Sauce Iron 0.8 257,825Wheat Flour Iron and Folic Acid 8 2,216 34,889Total 281.3 592,358 3,916,735

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not being adequately addressed within the economicmeans and parenting skills of poor Asian families,and Asian governments are not generally assisting thedevelopment of a complementary foods industry.Where complementary foods are available, they areof the “boutique” variety intended for, and pricedwithin the means of, the middle and upper classes.Thus, experience with complementary foods for thepoor is very limited in Asia. Moreover, the eliminationof physical and mental deficits in very young Asianchildren also involves a strong shift in public healthsystems, which currently focus on micronutrientsupplement programs rather than integrated growthscenarios. Several successful interventions, listedbelow, provide the necessary and sufficient conditionsfor poor children to grow normally and protect theirhealth and learning potential.

• promoting exclusive breastfeeding for at least 6months according to the Code23;

• public education (formal and informal media)and health promoters with responsibility forcommunity outreach which conduct home visitsworking with primary caregivers to optimizeinfant feeding practices and domestic hygienethat will reduce diarrhea prevalence and growthfaltering in very young children;

• integrated breastfeeding and semisolidcomplementary foods introduced at 6 monthsand monitored by community programs thatchart the growth and development milestones24

of children; and• introduction of food-based programs for young

child feeding, including home-based andindustrially processed complementary foods,with strengthened social marketing, regulatoryand quality-assurance systems at national andsubnational levels of government. Affordabilityand food safety/quality should be the instrumentsof effective demand and consumer choice.

It is obvious that the contribution of processedcomplementary foods must be considered in this

context, and in any case should not be regarded asthe “magic bullet” that will reverse physical andmental growth faltering in young Asian children. Butthe potential role of multiple micronutrient-fortifiedcomplementary foods should not be underestimatedeither, because studies on the economic losses fromstunting and micronutrient deficiencies havedemonstrated the high “shadow price” of thenutritional status quo and the weak impact of publichealth programs; because scientific reviews25

have shown significant shortfalls in macro- andmicronutrients that young children need; andbecause the velocity of growth in the first 12, 18, and24 months of life is so rapid that responsive feedingmust be elastic. This is precisely where the “scalingup” of affordable processed complementary foodscould make a big difference in the future learning andearning potential of children.

For all these reasons, it is premature to developa rigorous economic benefits analysis for industriallyprocessed complementary foods, but their inclusionin this study, and the production frontier of the Asianfood industry, is warranted.

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To prevent overly optimistic projections in the CIPs,the assumptions used are generally based onconservative interpretations of the evidence.Therefore, the projected benefits are intended toprovide a floor rather than a ceiling. For example:

• The CIPs attach no dollar value to an adult lifesaved. Reduced maternal mortality and deathsfrom CHD are not quantified.

• In the CIPs, productivity loss attributed toanemia for heavy manual labor and blue-collarlabor is among the lower estimates found in theliterature. While the CIP model used a 1% figurefor productivity loss among anemic blue-collar

23 The International Code of Marketing of Breast-Milk Substitutes,described in the context of international agreements on appropriateinfant feeding practices in Clark, D. and R. Shrimpton,”Complementary feeding, the Code and the Codex,” Food andNutrition Bulletin 21 1 (2000): pp. 25–29.

24 Psychomotor, psychosocial, and cognitive.

25 Dewey, K. and K. Brown, “Update on technical issues concerningcomplementary feeding of young children in developing countriesand implications for intervention programs,” Food and NutritionBulletin 24 1 (2003):5–29; World Health Organization,Complementary Feeding of Young Children in Developing Countries:A Review of Current Scientific Knowledge (WHO/NUT/98.1)(Geneva: WHO, 1998); World Health Assembly, Global Strategy forInfant and Young Child Feeding (WHA55/2002/REC/1, Annex 2)(Geneva: WHA, 2002).

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workers, a recent study in the Asian DevelopmentReview estimates a loss of 5%.26 The same studyestimates wage losses for heavy work at 17%while this model uses 12%. The less-conservative assumptions would have doubledthe benefit-cost ratios for IDA interventionsincluded in the CIPs.

• The estimated benefits of fortifying flour withiron are limited to populations with irondeficiency anemia. However, a number of studiesindicate negative impacts on cognitivedevelopment and performance with irondeficiency, even without the onset of clinicalsymptoms of anemia. Iron deficiency anemia isused as a conservative standard because thefunctional impacts are more extensivelydocumented and quantified and because fewcountries have data on the prevalence of irondeficiency as opposed to anemia. However, sinceit is generally thought that for every case of irondeficiency anemia there is another case of irondeficiency, this conservative standard may limitthe projected benefits of iron fortification in theCIPs to half of the potential beneficiaries.

• For both anemia and VAD interventions, nobenefits are attributed for the first year of fortifiedfood consumption. Several supplementationtrials have shown significant improvement innutrition within shorter time frames. In the caseof folic acid, the “time-lag” assumed formeasurable impact is longer.

• The correction of anemia is complex and sets amuch higher bar for impact than the correctionof iron deficiency. For example, an evaluationof flour fortification in Venezuela shows littlesustained impact on hemoglobin, thebiochemical indicator of anemia, but a dramaticsustained drop on serum ferritin and otherindicators of iron deficiency.

• Many negative impacts of micronutrientmalnutrition suggested by the literature are notincluded in the analysis, either becauseconsensus does not yet exist or because theywere too complex to quantify within the contextof the CIPs. These impacts include increasedmorbidity in anemic women and children, folicacid reducing the incidence of certain cancers,the impacts of VAD on pregnant women andother populations,27 and the synergistic effectsof adding multiple micronutrients to the dietthat mutually promote absorption andbioavailability.

• The projections for prevalence reduction basedon effectiveness trials were conservativelydiscounted. For example, while large-scaleeffectiveness trials in the PRC with iron-fortifiedsoy sauce showed a reduction in anemia of morethan 50%, the PRC CIP projects only 30%.

Error bands widen as assumptions are multipliedby assumptions. Therefore, the specific numbers andconclusions offered in the CIPs should be viewedaccordingly. However, the analytical frameworkprovided Country Teams with a transparent andsystematic tool to scan for fortification opportunities,create and compare potential fortification scenarios,and make strategic choices. In several cases, proposedfortification strategies were discarded because theyshowed a low or negative benefit-cost ratio. Thisallowed for some informed strategic choices and afocus on scenarios suggesting greater impact. Basedon this analytical framework, the five CIPs offerreasonable fortification strategies with defensiblebenefit-cost ratios that can be used in the larger publicdebate (outside the nutrition community). Thissystematic approach will assist policy makers andinvestors in setting priorities among competinginvestment and development opportunities.

26 Horton, S., “Opportunities for investment in nutrition in low-income Asia,” Asian Development Review 17, 2 (1999): 246–273.See also Horton, S. and J. Ross, “The economics of iron deficiency,”Food Policy 28 (2003): pp. 51–75.

27 The impact of enhanced vitamin A intake on pregnant women hasbeen shown to reduce all-cause maternal mortality by more than40%. West, K., J. Katz, S. Khatry, S. LeClerq, E. Pradhan, S. Shrestha,P. Connor, S. Dall, P. Christian, R. Pokharel, & A. Sommer, DoubleBlind, Cluster Randomized Trial of Low-Dose Supplementation withVitamin A or Beta Carotene on Mortality Related to Pregnancy inNepal. British Medical Journal (1999) 318:570–5.

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This chapter contains summaries of the fiveCountry Investment Plans.28 The CIPs outline 10-year costs, benefits, and implementation strategiesfor 14 national food fortification projects. Belowis a table summarizing the costs of, and requestedfunding amounts for, the 14 projects (Table 7). The

following four sections describe more fully thethinking behind the proposed projects for thefortification of flour, fish and soy sauce,complementary foods, and oil, respectively. Thesesections are followed by the summarized CIPs foreach of the five countries.

28 Indonesia, Pakistan, People’s Republic of China, Thailand and Viet Nam.29 These costs include the purchase and handling of fortificant premix

and expendables for quality control activities.

TABLE 7: Ten-Year Costs of CIP Projects and Requested Funding Amounts

Recurring Capital and Food Control MarketingCountry and Production Start-Up & Biological and SeedProject Costs29 Costs Monitoring Education Total Request Financing

($) ($) ($) ($) ($) (%)30

IndonesiaWheat Flour 15,364,700 131,000 2,507,157 2,714,500 20,586,387 24 4,852,770Cooking Oil 50,769,325 1,925,198 2,248,437 5,429,000 60,371,960 22 13,396,889Comp. Foods 45,990,000 250,000 323,740 20,574,000 67,137,740 27 17,928,440

PakistanWheat Flour 137,043,730 23,824,000 2,689,170 2,036,620 165,593,520 22 37,006,536Cooking Oil 31,107,220 2,689,170 2,036,620 35,833,010 22 7,836,512

PRCSoy Sauce 213,780,000 5,625,000 4,900,000 15,933,000 240,238,000 1 3,071,000Wheat Flour 101,081,100 54,450,000 2,194,000 26,400,000 184,125,100 5 8,702,000Comp. Foods 3,419,600 160,000 1,943,170 8,800,000 14,322,770 36 5,162,170

ThailandFish Sauce 22,926,009 221,084 1,315,625 24,462,718 5 1,221,952Wheat Flour 2,053,024 121,600 199,380 385,313 2,759,317 18 490,739Comp. Foods 3,229,643 201,680 365,313 3,796,636 14 525,614

Viet NamFish Sauce 15,450,000 884,000 2,163,000 3,243,000 21,740,000 19 4,089,300Wheat Flour 2,448,510 171,700 695,000 500,000 3,815,210 18 669,926Comp. Foods 34,626,639 1,230,280 805,000 6,975,434 43,637,353 15 6,516,161

Totals $679,170,220 $88,772,778 $23,774,459 $96,308,425 $888,413,061 13% $111,470,009

30 This column shows the percent of the total project cost for whichthe CIP requests funding.

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While all five CIPs propose strategies to implementnational flour fortification, the three countries thatare members of the Association of Southeast AsianNations (ASEAN)—Indonesia, Thailand, and VietNam—present very different opportunities andchallenges for flour fortification than do the PRC andthe countries of the South Asian Association forRegional Cooperation (SAARC), such as Pakistan. InPakistan and the PRC, wheat products are traditionalstaple foods widely consumed by the poor. In theASEAN countries, rice remains the basic staple, andthe consumption of flour products is relatively new.

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In Indonesia, Thailand, and Viet Nam, a relativelynarrow segment of the population—typically theurban and more affluent—consume noodles, breads,and other flour products. But this segment is growingvery quickly. For example, Viet Nam has seen nationalflour consumption rise more than tenfold since 1996.Since the market for flour products in these countriesis relatively new, the milling industry is fairly modernand centralized. In fact, some of the world’s largestmills and milling companies are in this part of Asia.These facilities already have sophisticated productionand quality assurance processes, and severalcurrently add micro-ingredients as flour “improvers.”As shown in Table 8, the capital and operational costsof adapting these plants for fortification, and the costs

of government food control, are quite low. Likewise,government regulation and monitoring of thesecentralized fortification facilities is quite feasible andrelatively simple.

The procurement of micronutrient mix is themajor financing need in Indonesia, Thailand, and VietNam. Depending on the mix of vitamins andminerals, the incremental increase in the cost of theflour is estimated from $0.35 to $1.10 per metric tonFOB or “free on board.”32 This represents less than1% of the current international cost of wheat. Whilethis appears to be an invisible price increment,absorbing the recurring cost may be a challenge.

As illustrated in Table 9, while the cost ofpremix per metric ton is low, the purchase representsa significant annual expense from a nationalperspective. Moreover, since the international priceis set in US dollars, the local price of importedvitamins and minerals fluctuates—and has soaredsince the 1997 decline of Asian currencies. The costis further exacerbated by import duties ranging from12% to 33% in these three countries. Advocacy tolower and/or abolish these tariffs is ongoing. It shouldbe noted that, in Thailand, duties on premix weredropped from 31% to 1% to support a voluntarynoodle fortification program.

The competitive situation is also a potentialbarrier. As the price of noodles and bread rises,companies fear losing consumers and market shareto rice—a traditional, less expensive, and domesticallyproduced staple. In addition to altering the domesticmarket via this substitution effect, a small price risecould affect the competitive balance between

31 The number of mills in each case are those that supply essentially100% of national flour consumption.

32 “Free on board” in this case refers to the cost of the flour at theplant, before shipping, duties, tariffs, and so forth.

TABLE 8: Estimated Annual Costs of Equipment, Plant Improvements, and Operations(not including fortificant premix)

Indonesia ($) Thailand ($) Viet Nam ($)5 mills31 8 mills 16 mills

Ten-Year Depreciated Cost 13,100 12,160 17,090of Equipment

Administration and 43,050 5,511 6,405Overhead (calculatedas 3% of the premix cost)

Labor, Quality Assurance 45,320 24,010 26,946

Annual Costs 101,470 41,681 50,441

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TABLE 9: Estimated Annual Costs of Two Fortificant Premixes(not including tariffs)

Indonesia ($) Thailand ($) Viet Nam ($)(3,100,000 mt/yr of flour) (550,000 mt/yr of flour) (610,000 mt/yr of flour)

60 ppm Iron & 2 ppm 1,085,000 192,500 213,500Folic Acid@ $0.35/MT Flour

5 Micronutrient 3,410,000 605,000 671,000Standard@ $1.10/MT Flour

domestic and imported flour. For example, afternational fortification was implemented in Indonesia,nearly 20% of the market share was lost to a flood ofless expensive imports. Building effective food-control systems, including ports and customsinspectors, is critical to protect millers who complywith regulations. Food-control systems are thus a keycomponent of the Indonesia flour fortificationproposal.

A key barrier to the widespread support of flourfortification in the ASEAN countries is the commonbelief that, since only about half of the populationsof Thailand, Viet Nam, and Indonesia regularlyconsume flour products, and these consumers areoverwhelmingly urban and middle to upper income,fortification would have no public health impact.To test this perception, the Country Teams used arough consumer segmentation to project estimatedreductions in the prevalence of IDA. The segmentationclearly reflects that most flour consumers are not lowincome or high risk. Though based on limited data,the flour consumer profiles for the three countrieswere very similar. The segmentations and relatedassumptions are as follows.33

Low-Risk, More Affluent, and Urban Flour Consumers• represent 30% of the population• consume 2/3rds of all wheat flour products,

and get 2/3rds of all iron from projectedfortification

• anemia prevalence assumed to be half thenational average.

High-Risk, Low-Income, and More Rural FlourConsumers

• represent 11.5–15% of the population• consume half the flour of low-risk

consumers• anemia prevalence assumed to be twice

that of low-risk consumers.Nonconsumers

• represent 55%–60% of the population• consume no flour on a regular basis and

therefore receive no benefit• anemia prevalence assumed to be the same

as the high-risk group.

A scenario projecting the impact of flourfortification on the prevalence of IDA and FAD wasrun for four population groups: pregnant women,adult women, men, and children. For Viet Nam, thescenario was based on an MOH National Institute ofNutrition survey showing consumption levels of 125grams per day of flour from bread, noodles, and otherproducts among 15% of low-income women in ruralareas. The projected impact on IDA for Vietnamesewomen is shown in Table 10. With flour fortification,reduction in prevalence is around 7% for women whoconsume flour products. However, national prevalencedecreases only about 2%, since more than half the high-risk population is assumed to consume no flourproducts and therefore receives no benefit. For the threeASEAN countries, the consumer segmentationscenario shows IDA reduction of 2–8% amongconsumers and 1–3% for the national population. Theimpact of added folic acid was also estimated,although no correction for socioeconomic class wasmade. In Indonesia, it was projected that the additionof folic acid delivered via flour fortification would save100,000 lives over 10 years, due to a reduction in birthdefects and coronary heart disease.

Under current conditions and market patterns,flour fortification is clearly no panacea for micronutrient

33 The segmentation data are based on industry estimates inIndonesia and small consumption surveys in Viet Nam andThailand.

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malnutrition in Asia. However, in these three ASEANcountries, more than 200 million consumers wouldbenefit from the addition of iron to flour. Table 11shows the projected benefits and costs of flourfortification in the three ASEAN countries over a 10-year period. The benefit-cost ratio indicates that forevery dollar invested, flour fortification with iron andfolic acid returns $4–9 in decreased mortality andhealth costs, improved current productivity, andincreased future productivity from improvedcognitive development attributable to lower anemiarates in childhood. As flour consumption grows,particularly among low-income and rural consumers,these returns will rise dramatically.

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In Pakistan and the western PRC, wheat flourproducts such as bread and noodles are staple foodsthat are traditionally grown, milled, and consumedthroughout rural and low-income populations. Asseen in Table 12, given the high per capita

consumption of flour, the added intake of ironthrough flour fortification can be considerable.

Nonetheless, barriers to flour fortification existin Pakistan and the PRC. The effectiveness of addedvitamins and minerals, particularly iron, in the less-refined brown flours common in both Pakistan andthe PRC is uncertain. Large-scale trials are ongoingin both countries to determine nutrition impact,consumer acceptability, and optimal fortificationcompounds. In the PRC, the trials utilize a domesticallyproduced fortificant, NaFeEDTA (sodium ironethylenediaminetetraacetic acid), a highly absorbableiron compound that overcomes the problem of low ironabsorption in less-refined brown flours.

Both Pakistan and the PRC also face issuesrelating to industrial policy. In both countries,traditional village mills supply flour to more than halfof flour consumers. These mills are most common inrural areas. While trials are showing the technicalfeasibility of fortification in small mills, commercialviability at this small scale has not been demonstrated.Moreover, there are complex issues of communication,quality assurance, and food control, given the literallytens of thousands of small producers. As Table 13

TABLE 11: Ten-Year Benefits and Costs of FortifyingFlour with Iron and Folic Acid

Benefits Costs34 Benefit-Cost($ ‘000) ($ ‘000) Ratio

Indonesia 104,134 20,586 5.1Thailand 13,400 2,759 4.9Viet Nam 37,105 3,815 9.7

TABLE 10: Consumer Segmentation Analysis for Adult Women: Impact of Fortified Flour on IDA in Viet Nam

IDA Prevalence Iron Delivered Est. Prevalence ReductionBefore Fortification via Fortification after Fortification

High-Risk Consumers 47.3% 7.5 mg/day 6.8%(15% of the population)

Low-Risk Consumers 23.6% 8.4 mg/day 7.4%(30% of the population)

Nonconsumers 47.3% 0 0(55% of the population)

National Summary 40.2% 2.4%

34 Note that the total costs in the Indonesia and Thailand CIPs arehigher because they include a premix made up of fivemicronutrients. The cost-benefit analysis here measures only thebenefits of iron and folic acid, and therefore only these costs areused here. Costs may include applicable taxes and duties.

TABLE 12: Projected Effects of Flour Fortificationin Pakistan and the PRC

Consumptionof Flour by Added Iron

Low-Income @ 60 ppmIndividuals (milligrams/ % Daily(grams/day) day) Requirements35

Pakistan 302 18 64PRC 191 11 39

35 WHO/FAO, Vitamin and Mineral Requirements in Human Nutrition(Geneva: World Health Organization, in press).

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TABLE 13: Mill Segmentation in the Western PRC

Annual Capacity Number % Capacity of the(MT) of Mills Western PRC

>100,000 75 2.1%50,000–100,000 480 3.4%25, 000–50,000 1,500 5.4%12, 500–25,000 7,500 14.3%

<12,500 98,000 74.8%

prosperous industrialized region. The western regionis also the focus of a poverty reduction agreementwith ADB. The CIP envisions developing the large millsector in the western region, as well as expandingdistribution of flour from large mills in the northeastPRC. As quality assurance regulations are enforcedand fortification becomes mandatory in the lateryears of the 10-year plan, many of the small mills willbe consolidated into larger operations. The CIPproposes intensive marketing campaigns to createconsumer awareness of both the higher quality andimproved nutrition available from industriallyproduced fortified flours. The PRC used a similarstrategy for iodized salt—upgrading the industrialcapacity and product quality to establish and sustainmore than 90% coverage of iodized salt. There is everyreason to believe that the proposed strategy for flourfortification can be equally successful.

The product introduction strategy is a keyelement in the PRC CIP. The first step in the programis to provide fortified flour through a publicdistribution program for populations displaced by themodernizing landscape of the western PRC. Thisprogram is both a well-targeted public healthintervention and a strategy to transition the marketto higher-quality flour products. As consumers areintroduced to this product and as industriallyproduced flour becomes more easily accessible,fortification will become a sustained part of thedeveloping food markets in northwestern PRC.

In both Pakistan and the PRC, engineering atransition from traditional flour products and asmall-mill environment is complex. The needed start-up investments in industrial upgrades, food control,nutrition surveillance, and extensive social marketingare relatively high. Table 15 shows that, whileprojected prevalence reductions are also relativelyhigh, the CIPs estimate a 10-year benefit-cost ratioin the range of 2:1–3:1. These ratios may bedeceptively low, however. In the case of Pakistan, thebenefits are limited to less than half the populationand by the low bioavailability of iron in unrefined atta(brown) flour. In the PRC, the relatively low benefit-cost ratio is in large part attributable to the high costof domestically procured premix.36 As theseassumptions change, the benefit-cost ratios for

36 Domestically procured premix is estimated at about twice the costof other CIPs based on the standard rates of international suppliers.

reveals, there are nearly 100,000 small millingenterprises in the western PRC alone.

The PRC and Pakistan CIPs address thesebarriers in very different ways. The Pakistan planaddresses the challenges of quality assurance andfood control with a conservative strategy thatproposes to achieve fortification at 690 large-scaleroller mills covering approximately 45% of thepopulation. A program of research and developmentto enable smaller chakki mills (small-scale stonemills) to fortify is proposed for the future. To enablesustained fortification at the large roller mill level, theCIP proposes significant investment in improvinggovernance and creating consumer awareness tocreate an enabling business environment. The CIPalso proposes temporary micronutrient mixsubsidies. Even though this large-mill strategy limitsaccess to fortified flour to a mostly urban population,the CIP analysis suggests national IDA prevalencereductions in the range of 9–10%. The resulting 10-year productivity improvements are estimated atmore than $262 million, as shown in Table 14. Anadditional $75 million in benefits are projected fromthe provision of folic acid in flour fortification.

TABLE 14: Ten-Year Economic Impactof Projected Reductions in IDA Prevalence

via Flour Fortification in Pakistan

EconomicImpact

Gains Made ($ million)

Productivity Gain fromImprovements in Childhood Cognition 169.30Blue Collar Productivity Gains 27.92Manual Labor Productivity Gains 65.12

Total 262.34

The CIP from the People’s Republic of Chinapositions fortification as a component of the overalltransition of the PRC’s western provinces to a more

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Pakistan and the PRC may well surpass those of theASEAN countries.

Table 16 summarizes the status of the flourfortification programs in each of the five countries ofinterest.

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In countries where rice is the dominant staple food,micronutrient malnutrition is often the most severe.For a number of reasons, it is not possible to fortifyrice with critical vitamins and minerals. Thedevelopment of micronutrient-rich strains of rice viabiotechnology and plant breeding is ongoing, but forthe time being these approaches remaindevelopmental and not yet at a commercial scale.

The fortification of condiments, however, offersa promising strategy to benefit rice-eatingpopulations. The 1980s saw a public-privatecollaboration to develop monosodium glutamate(MSG) fortified with vitamin A in Indonesia.Technical barriers and strained communicationsbetween public and private organizations broughtthat project to a halt, but at some future date it maybe revived. In South Asia and Africa, tests are ongoingto develop a salt fortified with both iodine and iron.Today, after several years of product development,testing, and close cooperation among governments,

manufacturers, and international agencies, iron-fortified fish sauce and soy sauce are ready for market.

In the PRC, Thailand, and Viet Nam, more than80% of the population, including people in allsocioeconomic groups, regularly consume fish or

soy sauce at an average of 10-15 milliliters perperson per day. Low-income consumers typicallyconsume 60-70% of the national average, which isstill sufficient to deliver significant levels of iron. Inthese three countries, significant segments of themarket are in the hands of large producers who areorganized, sophisticated, and, over the past severalyears, in communication with public healthauthorities regarding fortification. Table 17 showsthe number of producers of fish and soy sauce inthe three countries, and the number and percentageof those that are large producers.

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Until recently, fish and soy sauce had not beenconsidered potential fortification vehicles due toquestions of product quality and consumeracceptance. Traditional iron salts precipitated, withresulting color and taste changes during storage andthe cooking of traditional dishes. However, twosolutions have been developed. Food technologistsworking at Mahidol University in Thailand developeda formulation that includes ferrous sulfate, along with

TABLE 16: Maturity of CIP Flour Fortification Programs

Program Stage Best-Case Launch Date

Indonesia Ongoing Strengthening ofImplementation andRegulation as ResourcesBecome Available

Pakistan Trials OngoingPRC Trials Ongoing 1-2 YearsThailand Initiate Trials and Advocacy 1 YearViet Nam Initiate Trials as per 2 Years

Regulation

TABLE 15: Benefits and Costs of Flour Fortification in Pakistan and the PRC

Benefit Cost($ ‘000) ($ ‘000) Benefit-Cost Ratio

Pakistan 337,862 165,416 2.0PRC 543,346 184,125 3.0

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0.3% citric acid as a chelating agent, that does notcause changes in sensory features. This formulationhas been tested at Mahidol University, private Thailabs, and the Swiss Federal Institute of Technology todetermine the bioavailability of the iron and productacceptability. The concept has been introduced to Thaifish sauce producers.

Viet Nam’s National Institute of Nutrition (NIN)and the Chinese Academy of Preventive Medicine(CAPM)—working in close collaboration with theInternational Life Sciences Institute—have taken adifferent route, using the fortificant sodium ironethylenediaminetetraacetic acid, or NaFeEDTA. Thisnovel iron compound, approved by the Joint FAO/World Health Organization (WHO) ExpertCommittee on Food Additives, has interestednutritionists for a number of years due to itsenhancing effect on iron absorption. In high-cerealdiets, such as the rice-based meals of Viet Nam andthe PRC, NaFeEDTA has been found to be 2-5 timesmore bioavailable than traditional iron compounds.And it has another key advantage. NaFeEDTA doesnot precipitate out or cause any negative productchange. The CAPM and NIN undertook a series ofefficacy and effectiveness trials—the latter involvingmore than 20,000 individuals. The trials revealed adecreased IDA prevalence of 50% or more. Therefore,

NaFeEDTA-fortified fish and soy sauce provideamong the best-documented examples of positiveimpact from an iron fortification intervention.

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The stage is thus set for the commercial launch offortified fish and soy sauce. In both the PRC and VietNam, food standards have been amended to allow theaddition of NaFeEDTA to fish sauce and soy sauce. Afactory in the PRC is currently producing NaFeEDTAand has the ability to expand (within its currentfacility) to meet the needs of the PRC’s domesticfortification programs—and possibly others. ThePRC, Thailand, and Viet Nam CIPs plan for anexpansion of fish and soy sauce fortification to50-90% of production in 10 years. (See Table 18.)Industrial upgrades are expected to be minimal. Insome cases, factories will need to install mixing tanks.All will need to invest in appropriate quality assurancesystems.

In Thailand, close communication with the ThaiNational Producers Association is expected to ensurethe participation of its 20 member companies within5 years. In Viet Nam, where the government is part-regulator and part-owner of the fish sauce industry(via the Ministry of Fisheries), a 5-year plan envisions

TABLE 17: Industrial Environment for Fish and Soy Sauce Fortification

% of Nat’lConsumption

Number of Number of Large from LargeProducers Producers Producers

PRC 2000 200 42%Thailand 100 20 80%Viet Nam 200 30 70%

TABLE 18: Projected Reach of Fish and Soy Sauce Fortification Programs

PopulationConsuming

% of Population Fortified Fish/National Covered after Soy Sauce after

Population Ten Years Ten Years

PRC 1,400,000,000 36 500,000,000Thailand 66,000,000 70 46,200,000Viet Nam 85,000,000 90 77,000,000

Total Coverage 623,200,000

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the expansion of fortification throughout the large-scale sector, and subsequently a “consolidation phase”in which the operations of many small-scaleproducers will be incorporated into the largercompanies. In the PRC, close collaboration betweenthe Chinese Academy for Preventive Medicine and theChina National Soy Sauce Producers Association isdrawing widespread support among producers.Participation in the first year of the program is byapplication only. The PRC CIP proposes the expansionof production over 10 years to 200 large refineries,sufficient to cover a population of 500 million.

In both Viet Nam and the PRC, fortification isframed as part of an overall plan to establish moreeffective and transparent systems for food quality andsafety. This is reflected in substantial proposedinvestments in food control and surveillance, asshown in Table 19. In Thailand, the desired investmentin food control systems is lower because theseactivities are limited to about 20 large companies, andbecause food analysis is “privatized,” with routinetests at accredited private laboratories required by theThai Ministry of Public Health’s Nutrition Sealprogram.

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Each CIP proposes collaborative, public-privateactivities to gain producer participation and buildconsumer awareness and demand. In all cases,consumer marketing is focused on education andbehavior change among the highest-risk consumers,primarily in rural areas. The market share gained bylarge industries as a result of fortification willpredominantly be due to increased consumptionamong the rural poor.

• In Thailand, Nutrition Seal promotions and anational product introduction campaign willtarget acceptance by consumers. The marketingbudget is relatively small, with no plannedexpansion beyond the 80% market sharecurrently held by the large producers andassociation members. However, due to a numberof market factors, including fortification, gainsin market share to 90% over 10 years seemreasonable to project.

• Fish sauce fortification in Viet Nam will be welltargeted, because only mid- and lower-qualityproduct will be fortified. For the large majorityof consumers, the transition to fortification willbe invisible; they will purchase the same productfrom the same supplier at a competitive price.Over 10 years, the CIP projects a 25% increasein market share for large-scale producers from70% to about 90% of consumption. This gainwill come specifically in rural areas currentlysupplied by small producers. Social marketing,with an emphasis on the participation of localgovernments and NGOs, is expected to raiseawareness and demand in rural areas to supportthis modest transition and consolidation.

• The PRC is embarking on a marketing challenge,proposing to shift a significant number ofconsumers from traditional, village-madeproducts to bottled, industrial commoditiesfrom quality assured factories offering GoodManufacturing Practices (GMP) and HazardAnalysis and Critical Control Point (HACCP)systems. This transition to higher-quality andmore nutritious products involves a priceincrease of some 50%—primarily due to anoverall higher-quality product and glass bottle.At average consumption, this would amount to

TABLE 19: Ten-Year Food Control, Monitoring, and Marketing Costs forFish and Soy Sauce Fortification

(in US dollars)

Proposed Food Control Proposed Ten-Yearand Monitoring Budget Marketing Budget

Amount % of Total Amount % of Total($) Program ($) Program

PRC 4,900,000 2.04 15,933,000 6.66Thailand 221,840 .5 1,315,625 4.53Viet Nam 2,163,000 9.95 3,243,000 14.92

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an additional cost of about $0.32 per year. Thereare numerous examples of rural Chineseconsumers moving to higher-quality and moreexpensive products as these become available.To facilitate this market transition, the PRC CIPproposes new distribution and marketingsystems that specifically target high-risk areas.The plan’s target is 50% of market share in theseareas after 10 years.

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According to the CIP analyses, the fortification of fishand soy sauce offers the most cost-effectiveopportunity to improve nutrition and health in Asia.Discounting effectiveness trials as much as 50%, theCIPs from the PRC and Viet Nam project 25–30%reductions in the national prevalence of IDA. Thebenefit-cost analyses for Viet Nam and the PRCestimate a $9–12 return for every dollar invested inthese projects. Thailand, with a lower baselineprevalence of IDA, projects a more modest reductionand a benefit-cost ratio of almost 7:1. (See Table 20.)

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“Complementary foods” are semisolid foods fed toinfants and very young children as complement tobreast-feeding or commercial or homemade formula,as a means of better meeting the nutritionalrequirements of the child. Complementary foods offeran opportunity to optimize child growth andcognitive development in Asia, which has the highestprevalence of underweight and stunted children inthe world. By targeting the most vulnerable

population in Asia at a critical time in life, the returnsin lives saved will be immeasurable and the savingsin reduced illness and future productivity will beenormous.

Commercial complementary foods have alreadybeen introduced to the rural poor in Asia. In the PRC’swestern provinces and in rural Viet Nam, 13-17% ofchildren under 2 years old have consumedcommercial complementary foods. (See Table 21.)Public distribution of complementary foods inIndonesia indicates that, when available, commercialcomplementary foods are well accepted; surveys ofthe UNICEF-sponsored Vitadeli program indicate an86% positive response. Both multinational companiesand domestic firms produce fortified complementaryfoods on a large scale in Asia, and supply could easilybe increased. Nonetheless, a number of barriersremain to the penetration of low-income areas.

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Despite evidence of consumer acceptance and somedemand, the relatively high cost of commercialcomplementary foods prevents timely andconsistent use among the majority of low-incomefamilies. In addition, barriers to access exist in poorurban neighborhoods and rural areas. An analysisof the Indonesian market shows that, while 100%of upper-income segments have access tocommercial complementary foods, the products aresimply not easily available for the overwhelmingmajority. (See Table 22.)

An analysis of the industry’s cost structure forcomplementary foods, shown in Figure 3, revealsthat 50% of the resources are applied to rawmaterials, production costs, and company overhead.The remaining 50% is spent on packaging,distribution, and marketing. The CIPs for Indonesia,the PRC, Thailand, and Viet Nam address both sidesof this cost equation. The objective of the CIPs’proposed public-private investment projects is toincrease access and affordability to low-incomeconsumers by reducing production costs andimproving the efficiency of distribution andmarketing. Both sides of this equation are discussedin the next two sections.

TABLE 20: The Benefits and Costs of Soy andFish Sauce Fortification

Benefit Cost Benefit-Cost($ ‘000) ($ ‘000) Ratio

PRC37 2,250,238 240,238 9.4Thailand 160,725 24,463 6.6Viet Nam 257,825 21,740 11.9

37 As elsewhere in this document, these figures cover only the westernprovinces of the PRC, not the whole country.

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Product formulation and development is complete fortwo of the projects proposed in the CIPs. Today inThailand, broken rice kernels are ground andpackaged as an inexpensive convenience food that iswidely purchased in rural and low-income areas. TheThailand CIP proposes that this dried ground rice befortified with calcium, iron, vitamin B

1, and folic acid

at 33% of the Thai RDA per serving, using technologythat is available in-plant. (See Table 23.)

The fortificants cost $7 per metric ton of driedground rice. Fortification has been tested at theindustrial level for stability and acceptance. Oneproducer is committed to introducing the product.Additional ground rice producers will be approachedat a later time, after the initial product has beenintroduced and the market development activitiesproposed in the CIP are underway.

In Viet Nam, a fortified complementary foodcalled Favina has been test-marketed in three ruralareas for 24 months. An initial biochemical evaluationindicates that this product has reduced the prevalenceof IDA by more than 50%.41 (Other results are not yetavailable.) While the formulation, with 18 vitaminsand minerals, is not novel, the production approachis innovative. Since Viet Nam has no centralized,large-scale, domestic manufacturing capacity, theproduct is manufactured by small production units,each with a 50 kg per hour capacity. The Viet NamCIP proposes a 10-year expansion from the currentthree production units to 50, which would besufficient to produce 8,500 MT annually and cover15% of Viet Nam’s lower-income 6- to 24-month olds.The capital investment for each unit—including ahammer mill, extruder, and other processing andpackaging equipment—is $6,000. Building andrenovation needs are estimated at an additional

TABLE 21: Percentage of Infants in the PRC’s Five Western ProvincesIntroduced to Commercial Complementary Food38

Age Guizhou Gansu Ningxia Qinghai Xinjiang(months) (%) (%) (%) (%) (%)

6–9 20.6 9.7 6.2 7.1 15.7 9–12 24.6 14.1 10.1 8.8 18.912–18 28.1 18.9 12.6 11.0 23.318–24 30.0 21.2 16.9 14.2 26.1

TABLE 22: Access to Commercial Complementary Foods bySocioeconomic Segment in Indonesia39

Socioeconomic % with Access toSegment40 Baby Population Commercial Comp. Foods

A 287,200 100B 513,900 100C 2,335,000 38D 2,313,300 23

38 These figures are drawn from the PRC CIP, summarized later inthis chapter.

39 Table supplied by Gizindo Foods, Indonesia.40 Segment A includes the wealthiest members of the population.

Segment D is made up of the poorest who take part in the casheconomy. Those in Segment E, not included here, do not take partin the cash economy at all.

TABLE 23: Fortification Profile of Fortified GroundRice, as Proposed in the Thailand CIP

Micronutrient Level per 100 kcal

Calcium 40.00 mgIron 5.30 mgVitamin B

1.08 mg

Folic Acid 11.00 µg

41 Personal Communication, Dr. Jacques Berger, Principal Investigator.

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$5,000–$6,000 per unit. The National Institute ofNutrition—along with a French NGO, GroupD’Exchange et de Recherche Technologique (GRET)—supply training, fortificant, and other critical inputs.The basic ingredients (rice, soy, and sugar) arepurchased from surrounding agricultural markets.The Viet Nam Women’s Union (VWU), with a networkthroughout the rural countryside, is committed toidentifying local partners and entrepreneurs. Itshould be noted that the pilot facilities are up andrunning, with sufficient sales to make adequate if nothandsome profits.

The Indonesia CIP proposes to develop a lower-cost product in collaboration with Gizindo Foods, alarge domestic producer that has been involved withthe Indonesian Ministry of Health on severalemergency distribution programs for children. Thecost structure reflects excessive costs for packaging(Figure 2). Product trials will focus on key cost-savings measures, including bulk distribution at theretail level rather than small, sealed packages.Formulations that succeed in reducing packagingneeds—and therefore 20% of the cost—offer thepromise of lower-cost foods that can reach 6- to 24-month olds in desperate need.

The PRC CIP proposes to pursue two parallelproduct strategies for complementary foods.42 First,talks are ongoing with large multinational suppliersto distribute their current products via the PRC’s

Ministry of Health andNGO channels in thecountry’s poor, ruralwestern areas. The CIPasserts that higherproduction volumesoffered by these bulksales to public entitieswill be attractive toproducers, and willlower overall unit costs. Moreover, the CIP asserts thatpublic distribution will lower retail costs by as muchas 50%. A second approach involves micronutrient-fortified “sprinkles,” a new product concept featuringa powdered micronutrient supplement that is addedto infants’ normal complementary food in the home.43

In both cases, the CIP asserts that reductions inprivate profit and overhead can significantly reducecosts.

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Industry’s estimate that marketing and distributioncomprise 30% of the total cost is based on experiencein a relatively affluent market for complementaryfoods. Reaching lower-income and less-informedconsumers in less-accessible areas will likely meanspending more than the current 30% on marketingand distribution. Therefore, the CIPs include a varietyof public-private partnerships that aim tosimultaneously decrease costs and increase the scopeof distribution to rural areas.

The CIP from Indonesia proposes to capitalizeon a partnership with DULOG, Indonesia’s nationallogistics agency. This large, public distribution agencyis currently supplying subsidized rice to the poorest10% of the population. DULOG has an extensivenetwork of warehouses and distribution points in allprovinces, reaching into the most remote districts.DULOG will partner with producers and theIndonesian Ministry of Health on a 10-yeardistribution plan that aims to reach 25% of at-risk 6-to 12-month olds in all of the nation’s 256 ruraldistricts. In addition to commercial channels, theproposed system features distribution to remote ruralretail outlets via local governments and health care

42 Neither of these strategies have been as extensively developed ortested as those mentioned previously.

FIGURE 2: Cost Structure of CommercialComplementary Foods in Indonesia

43 “Sprinkles” technology is often referred to as “in-homefortification.”

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posts, as well as direct marketing via networks ofmidwives and health workers. The estimated DULOGdistribution charge is 10% of the product’s value.Reaching 200,000 rural stores and midwives, themarketing and distribution plan involves investmentsin training and motivation for district level DULOGand MOH personnel. (See Table 24.) Incentivesinclude a small revolving fund to cover the initialmonth’s inventory, marketing materials, and point-of-purchase aids. After product development iscomplete, the CIP proposes to achieve targetdistribution within one year.

In Viet Nam, 50 small-scale, rural-basedproduction facilities will be complemented by adecentralized distribution and sales network capableof reaching into remote villages. As illustrated inFigure 4, the distribution lines will reflect theorganization of the VWU, a major project partner.Producers will distribute not only to retail outlets,but directly to commune-level VWU leaders. Asintermediate distribution points, the communeleaders will distribute the product and monitornumerous, village-level VWU collaborators. Thecollaborators will be involved in actual home visitsin remote rural areas. This proposed grassrootsmarketing and distribution structure is already inplace within the VWU and has been successfullypiloted in three areas.

While community service remains the bottom-line motivation for VWU volunteers, both communeleaders and collaborators will receive a percentage ofsales. As shown in Figure 3, sales via the VWUdistribution channel will be augmented bydistribution to local stores and sales to other NGOs.The program is based on the proposition thatproviding a nutritious product goes hand-in-hand

with education for child feeding and care. Therefore,a significant part of the CIP budget is devoted totraining VWU collaborators and producing materialsto be used in the face-to-face village context. With thishome educational component, nutrition benefits forchildren should accrue even if a sale is not made.

The Thailand CIP does not propose to build anadditional distribution system, but rather it grafts anew fortified product line onto the existingdistribution system for packaged ground rice. Thisdistribution system currently reaches deep into ruraland low-income areas. While the project will look to

building partnerships with the Government andNGOs to expand distribution to the poor, theseassumptions are not elaborated in the current CIPdraft.

The market for complementary foods is small.The four CIPs describe different target markets. (See

TABLE 24: Scope and Elements of Rural Distribution Plan forComplementary Foods in Indonesia

6- to 12-Month OldsReached Annually

(given 25% coverage) Stores Midwives

Total National 210,000 157,500 52,500Consumers and Retail Outlets

Estimated 820 615 205Consumers and Outlets per District(256 nationwide)

FIGURE 3: Distribution System for ComplementaryFoods in Viet Nam

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Table 25.) Some focus on 6- to 12-month olds, whileothers target 6- to 24-month olds—effectivelytripling the size of the market. Expanding this marketstill further to 36-month olds is a possibility. In allcases, however, the CIPs plan to reach a significantproportion of rural and/or high poverty areas—between 15% and 100% of at-risk children, as shownin Table 25. Over 10 years, more than 18 millionchildren will benefit.

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The four complementary foods proposals in the CIPsstructure 10-year costs differently. (See Table 26.) Forthe PRC, the “product or fortificant” figure includesonly the incremental cost of the fortificant. The figurefor Thailand includes the fortificant, packaging, andanalytical costs. For Indonesia, it includes the entirecost of the food product. And for Viet Nam, it includesall labor, packaging, overhead, 7% tax, and thefortificant, but not the raw materials, such as soy,sugar, or rice. While all of the CIPs show a significantinvestment in marketing and distribution, different

overall cost structures make comparisons difficult. Inmost cases, a benefit-cost analysis is not attempted,because the evidence is not available to quantify theimpact of improved micronutrient status within thisnarrow age range (6–12 months) of improved nutrition,if fortification is not continued in later months. The ThaiCountry Team, which assumed that cognitivedevelopment is protected by fortification in this critical6-month window, ran a benefit-cost analysis for

improvement in iron status only, with the resultssuggesting a return of nearly $4 for each dollar invested.This positive benefit-cost ratio was achieved eventhough it included the cost of a multimicronutrient mixbut only measured the benefits of improved iron status.

Table 27 shows the current status of thecomplementary foods programs outlined in the CIP.

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Oil fortification is a feasible strategy for deliveringadditional vitamin A to Asian children who are at high

TABLE 25: Annual Coverage: Markets Outlined in the CIPs’ Complementary Foods Projects

% of Market # of Children CoveredMarket to Definition be Covered Each Year

Indonesia 6- to 12-month olds, 50 250,000mainly in rural areas

PRC 6- to 36-month olds infive high-poverty areasof the western PRC 100 1,000,000

Thailand 6- to 12-month olds,mainly in rural areas 50 250,000

Viet Nam low-income 6- to24-month olds 15 360,000

TABLE 26: Summary Costs of Proposed Complementary Foods Initiatives

Indonesia ($) PRC ($) Thailand ($) Viet Nam ($)

Distribution 20,574,000 8,800,000 285,313 6,975,434and Marketing44

Product or 45,990,000 3,419,600 3,215,476 34,626,639FortificantCosts

Total 66,564,000 12,219,600 3,500,789 41,020,073

44 The distribution and marketing figures for the PRC, Thailand, andViet Nam do not include all retail or sales mark-ups.

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risk of mortality due to VAD. In Indonesia, Pakistan,and PRC the estimated consumption of oil amongchildren of low-income backgrounds or householdsis sufficiently high to deliver 10–18% of therecommended daily intake (RDI) of vitamin A. (SeeTable 28.) The Country Teams’ surveys of industrialcapacity indicate that the oil crushing and refiningindustry is relatively centralized and sophisticatedand can adapt fortification technology with minimalcosts. However, for a number of reasons, additionaldevelopment work may be necessary prior toestablishing national programs of oil fortification.

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Given the low intake of oil among at-risk children asdetermined by consumption surveys, Thailand andViet Nam are not proposing oil fortification at this time.However, national programs are proposed for Pakistanand Indonesia, as well as a targeted program for thePRC. These are projected to lower the prevalence of VAD

by 13%-30% among children under 5 years of age. Thiscould prevent about 100,000 deaths over the next 10years. (See Table 29.)

• In Pakistan, where oil fortification has beenmandated for half a century, the CIP analysis maybolster the case for a serious commitment toimplementing that mandate and may openchannels to gain support in both public and privatesectors. With 116 producers supplying nearly 100%of the oil consumed, fortification is industriallyfeasible and offers wide population coverage. The

TABLE 27: Maturity of CIP Complementary Foods Programs

Development Funds Needed Best-Case Launch Date AfterProgram Stage to Proceed to Launch Resources Become Available

Indonesia Advocacy $460,000 1-2 YearsPRC Development $500,000 1-2 YearsThailand Mature $80,390 6-12 MonthsViet Nam Mature Ready to Implement As Resources Are Available

TABLE 28: Potential Delivery of Vitamin A to Low-Income Children via Fortified Oil45

Daily Vitamin A % Needs Met bythat Could Be Oil Fortification

Oil Consumption Among Delivered to Children (given a child RDILow-Income, Rural Individuals via Oil Fortification of 400 µg/day)

Adults Children (Retinol Equivalent(mg/day) (mg/day) µg/day) (% RDI)

Indonesia46 21 5.25 47.25 12%Pakistan 24.3 8.1 72.90 18%PRC47 4.5 40.50 10%Thailand 7 2.3 21.00 5%Vietnam48 8.2 2.8 25.20 6%

CIP projects that if oil were consistently fortifiedto the level specified in current legislation, VADprevalence among children would drop 22%, and42,000 deaths could be averted over 10 years.

• In Indonesia, where a large domestic oilindustry provides for an affordable productwith widespread consumption across allsocioeconomic groups, the fortification of palm

45 These calculations are based on a fortification level of 15 µg/gram.Available vitamin A retained through storage and cooking ispresumed to be 60% of that level.

46 Note that, for Indonesia, Pakistan, and Thailand, child consumptionis estimated at 25% of adult consumption.

47 These figures were drawn from the PRC’s Third National NutritionSurvey, conducted in 1992.

48 A survey was conducted in low-income neighborhoods by NINspecifically for the CIP.

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oil with vitamin A may provide a lever tosimultaneously save lives and modernize thedomestic industry. Indonesia’s 57 producershave a huge production capacity, and they supplyboth the domestic market and a large exportmarket. Palm oil fortification is projected toreduce VAD prevalence by 13% in Indonesia,which could in turn avert more than 44,000deaths and save more than $555 million inhealth care costs over 10 years.49

• In the PRC’s southwestern province of Guizhou,a program targeting at-risk consumers with anew packaged oil product that conserves thestability of vitamin A is projected to avert 14,000child deaths over 10 years.

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Given the centralized nature of the industry, theprojected expenses for industrial upgrades as well asgovernment food control and regulation arerelatively modest. However, retinol palmitate, thevitamin A fortificant compound used in oilfortification, is expensive relative to other

micronutrients. Fortification at levels proposed forIndonesia (50 international units (IU) or 15micrograms per gram), would add about $3 per MTto the cost of oil production. It is estimated that about40% of the added retinol palmitate, at a cost of $1.20per MT, is lost in storage, distribution, and cooking.Given these relatively high costs and fortificant losses,industrial and academic sectors require more data onvitamin A retention in the range of oil distribution,storage, and cooking conditions found in Asia.50

Consequently, additional product development,efficacy, and effectiveness trials are proposed in theIndonesia CIP. Table 30 outlines the estimated futureoil fortification costs as proposed in the CIPs forIndonesia, Pakistan, and PRC.

The CIPs differ in their projected returns oninvestment for oil fortification. In the case of VietNam, oil fortification was not recommended after theanalysis suggested a negative return. In the PRC, thelow projected return may be due to high costsassociated with new packaging and the intensivepromotion of a new product. In Pakistan, where VADprevalence in children is projected to decrease about22%, the analysis shows about $4 returned for every

49 The large drop in deaths is due to very high initial prevalence of50% in children from 6- to 60-months old.

TABLE 29: Projected Ten-Year Impacts of Vitamin A Fortification of Oil

VAD Prevalence Potential Impact

Pre Post Deaths Health CareFortification Fortification % VAD Averted Costs Saved

(%) (%) Reduction (thousands) ($)

Indonesia 50 43 12.55 44 555,802,000Pakistan 24 18 22.08 42 18,233,000PRC 28 19 30.00 14 87,000,000

Totals 100 661,035,000

50 Based on stability tests at the University of Guelph under the guidanceof the studies’ Principal Investigator, it was assumed for the CIP that60% added vitamin A was retained at the point of consumption.

TABLE 30: Estimated Ten-Year Costs for Oil Fortification

Indonesia ($) Pakistan ($) PRC ($)

Production Costs 52,694,523 31,107,220 45,228,387Marketing Costs 2,714,500 2,036,620 16,986,057Food Control and 2,507,157 2,689,170 5,149,572

Monitoring

Total Budget 60,371,960 35,833,010 67,364,016

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dollar of investment. Indonesia shows the besteconomic return, with a benefit-cost ratio of 11:1—an extremely attractive investment in protectingchildren and lowering the national burden of disease.The high baseline prevalence of VAD in Indonesianchildren, which reveals a real national healthemergency, is a major factor in this favorable benefit-cost ratio. Table 31 summarizes the overall benefitsand costs of oil fortification in Indonesia, Pakistan,and PRC.

the relative cost and effectiveness of dietarydiversification, supplementation, and sugarfortification in Guatemala. Sugar fortification withvitamin A was indicated to be from 3 to 8 times morecost-effective than the other interventions.51 Since oilfortification is much less costly than sugarfortification with vitamin A, it may well be that oilfortification will emerge as very cost-effective whencompared with other life-saving interventions.

The following are the CIP summaries for the fiveAsian countries.52

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Since the 1970s, health and nutrition programs toalleviate poverty have been an integral componentof the Government of Indonesia’s Five-YearDevelopment Plan. These programs played asignificant part in reducing the prevalence of povertyfrom 60% in 1970 to 13.5% in 1996. Health indicatorslike the infant mortality rate improved from 145 to46 per 1,000 live births. However, since the economiccrisis of 1997, the number of families living in povertyhas doubled to 27.4%. Health and nutrition indicatorshave also deteriorated. More than half the childrenunder 5 years of age were vitamin A deficient in 2001.It is estimated that, with no improvements, mortalitydue to VAD will exceed 350,000 children over the next10 years. The national prevalence of anemia exceeds40% among both women and children, and maternaldeaths due to anemia are expected to reach 44,000over the next decade. Ten-year losses in productivityare projected at nearly $6 billion.

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The Indonesia CIP is based on Article 27 ofIndonesia’s Food Law of 1996, which mandates foodfortification programs to improve nutritional status.The National Fortification Commission, an officialmultisectoral body charged with developing nationalfortification strategies, is housed in the CoordinatingMinistry of Economic Affairs. Emerging from a 2-year,

TABLE 31: Benefits and Costs of Oil Fortification

Benefits Costs Benefit-Cost($ ‘000) ($ ‘000) Ratio

Indonesia 666,377 60,372 11.0Pakistan 138,260 35,833 3.9PRC 116,063 67,364 1.7

Given the significant projected impact of oilfortification, why are the benefit-cost ratios relativelymodest? In part because it is difficult, if notimpossible, to assign a dollar value to the preventionof child mortality. In the CIPs, the value of a life savedis coldly calculated at 30 years times the average wage(discounted). This may not be sufficient. Moreover,although the program fortifies the oil consumed bythe entire population, the benefits are only measuredamong children under 5 years of age. In other words,costs are incurred for national coverage while benefitsare measured for only a tiny population segment. Itshould also be noted that emerging evidence suggeststhat vitamin A provided during pregnancy may havea significant impact on all causes of maternalmortality. Due to the lack of scientific consensus onthis emerging data, the potential life-saving impactof vitamin A on women was not included in theanalysis. Further, it should be noted that additionalvitamin A supplied to children via a healthiermother’s breast milk was not calculated in the CIPanalysis.

In summary, it may be that the conservativeassumptions used in this analysis may not showvitamin A fortification in a “cost-effective” light. Otheranalyses, using other benchmarks, show vitamin Afortification to be very cost-effective. For example,the Latin American and Caribbean Health andNutrition Sustainability Project of the US Agencyfor International Development (USAID) reviewed

51 USAID/Latin American and Caribbean Health and NutritionSustainability Project, Cost Effectiveness of Vitamin A Interventions(USAID, 1991).

52 Figures in the summaries, unless otherwise indicated, are drawnfrom the analysis in each country’s full CIP.

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national, public-private consultative process, theIndonesia CIP affirms the need for governmentleadership in legislating mandatory regulations for thefortification of wheat flour, palm oil, and complementaryfoods. Major implementing government organizationsinvolved in the CIP include the National FoodFortification Commission for management andoperational issues; the Ministry of Industry and Tradefor regulation, technology, and training; the NationalAgency for Drug and Food Control for program andmarket monitoring; and the Ministry of Health forsocial marketing and biological evaluation.Universities, research institutions, and relevantprivate sectors were integrally involved in thedevelopment of the CIP and, in some cases, will beinvolved in implementing the proposed activities. TheCIP proposes integrated program managementamong all proposed fortification vehicles forcost-efficient enforcement and nutrition monitoring.

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Wheat flour products, particularly noodles, areconsumed regularly by approximately half of theIndonesian population. Most wheat is imported andmilled at five large, modern facilities. Recognizing thisopportunity to supply additional nutrients, theGovernment of Indonesia established regulations in1998 mandating the fortification of all wheat flour.While the milling industry has generally supportedfortification and complied with the regulation, thesituation is fragile. The price of fortificant mix, set inUS dollars, has soared since the Indonesian rupiahplunged in 1998. Moreover, weak communication andenforcement capacity resulted in a 20%–30% rise inthe importation of less expensive and nonfortifiedflour. In this fluid situation, only the generous supportof the Canadian International Development Agencyand the USAID for a subsidy on micronutrient mixhas enabled the program to continue.

The CIP proposes an integrated approach toaddressing this unsustainable situation. First,capacity-building in food control and customs areneeded to ensure that regulations are transparentlyenforced and that domestic and international flourcompetes on an equal footing. While food control forthe few domestic millers is a relatively simple matter,the enforcement of imports at Indonesia’s many portsis more difficult. Second, the CIP proposes a social

marketing campaign to raise awareness of the healthbenefits of fortified products and to protect thegrowing market share of flour products. And finally,as these programs take hold, the CIP proposes adeclining 3-year subsidy to cushion the transition tomarket financing.

With only 45% of the population consumingflour on a consistent basis, it is difficult to quantifythe impact of the flour fortification program. Basedon estimates provided by the milling industry, the CIPestimates that two-thirds of flour consumers are frommore affluent families. Only an estimated one-thirdof flour consumers are at high risk of anemia.Consequently, with limited coverage and conservativeassumptions, anemia is projected to fall down to asmuch as 4% among flour consumers and as much as2% on a national basis. However, given the cost-efficient industrial environment, the benefit-cost ratiofor added iron and folic acid is 5:1.

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Indonesia is one of the world’s largest producers andexporters of coconut palm oil. Palm oil is inexpensiveand widely consumed. There is little reportedvariation in intake among socioeconomic segmentsor between rural and urban populations. While otheroils, such as coconut and soybean oil, are on themarket, these account for less than 5% of purchasedoil products and are usually premium products; theyare not consumed by the at-risk populations. About90% of families consume palm oil at least weekly, withan average intake of 21 grams per person per day. Onaverage, fortification with 50 IUs (15 µg)of vitamin Aper gram—even with an estimated retention of only60% during distribution, storage, and cooking—canprovide the consumer with approximately 25% ofdaily requirements.

With palm oil processing centralized in 57processing plants, fortification is feasible andcost-efficient. While palm oil fortification istechnically uncomplicated in the current processingenvironment, it has not been evaluated foreffectiveness on a commercial scale. Therefore, aprogram of product development is proposed. Thisincludes efficacy and effectiveness trials, to befollowed by legislation mandating the fortification ofcooking oils by 2006. The CIP projects a 3-year periodfor industrial phase-in to achieve 100% fortification

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at all facilities. The program will be supported by anextensive commercial and social marketing campaignconducted cooperatively by palm oil producers andtheir trade association, along with the Ministry ofHealth. The campaign will be integrated with healtheducation, which will be delivered at the grassrootslevel through the health workers and NGOs.

Based on conservative projections of childrenconsuming 25% of the average oil consumption ofadults, the prevalence of VAD among this at-riskgroup is projected to fall about 20%. Over 10 years,this is projected to save more than 44,000 lives andmore than $500 million53 in health care costs. Thebenefit-cost ratio is about 11:1.

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Although fortification legislation for commerciallyproduced complementary foods has been in place inIndonesia since 1995, consumption is low. Whileseveral government distribution programs for high-risk children have indicated acceptance ofcommercial complementary foods in poor and ruralareas, these programs have not been sustainable. TheCIP proposes a collaboration among Gizindo Foods(a domestic producer), DULOG (the national publicfood distribution agency), and the MOH to target 25%of Indonesia’s less affluent rural children aged 6–12months. The program involves the production anddistribution of approximately 3,800 MT ofcomplementary foods annually—sufficient toprovide 210,000 children with 50 grams per day.

Industry analysts in Indonesia note that access,price, and awareness are major barriers to thewidespread commercial use of complementary foods.The public-private collaboration proposes to create asustainable business model to address these barriers.First, ongoing trials are working to develop a lessexpensive product and packaging. Second, the CIPproposes simultaneously lowering distribution costs andincreasing access among the rural poor via multiple andless expensive distribution lines. Along withconventional distribution and marketing, DULOG,which currently supplies the rural poor with subsidizedrice, will use its provincial and district facilities,

personnel, and capabilities to distribute fortifiedcomplementary foods. In addition to the DULOGnetwork, complementary food products will be suppliedto rural stores as well as directly to families via a networkof MOH clinics and a grassroots organization ofmidwives. Third, the program will work to raiseawareness and demand via traditional media, and via atargeted marketing campaign utilizing rural communityradio, the DULOG and Ministry of Health networks, andthe targeted opportunities provided by the midwives.

The proposed program provides fiscalincentives for the DULOG and local midwives withmark-ups of approximately 10%; this is less thancommercial distributors, and it provides channelsthat reach deeper into rural areas. A revolving fundwould provide midwife saleswomen with a free firstmonth’s supply of the product. The CIP requests aninitial grant of $350,000 for the completion of productdevelopment, as well as training and education forthe rural workers in the DULOG and MOH network.

Table 32 summarizes the 10-year budget for eachproposed project, the amount to be provided by theGovernment and through market channels, and theamount requested from donors.

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Per capita incomes in Pakistan have tripled over thelast 50 years. As a result, by the late 1980s, theproportion of the poor population had declined to17.6% (though recent upheavals in the country havecaused this figure to rise). However, there seems tohave been no corresponding improvement in thenutritional status of the population. Half the childrenbelow 5 years of age are malnourished; of these, 40%are underweight, 50% are stunted, and 9% are wasted.

Iron deficiency is the most prevalentmicronutrient problem in Pakistan. About 60% ofpregnant and lactating women and two-thirds ofchildren are anemic.54 The CIP analysis estimates that,

53 Again, Indonesia reports the highest reported VAD prevalence inchildren in the region (over 50%). This figure for projected healthcare costs saved remains under review.

54 The 1985–1987 National Nutrition Survey showed that 65% ofchildren aged 7–60 months were anemic. A regional study in theNorth West Frontier Province by Paracha reported that 56% of thepregnant women aged 16–35 years were anemic as well.Countrywide, it was estimated in the World Bank Health SectorReview that about two thirds of young children, half of the womenof child-bearing age, and a slightly higher percentage of pregnantand lactating mothers are suffering from anemia.

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TABLE 32: Costs of Proposed Fortification Projects for Indonesia, and the Amount Requested from Donors

Ten-Year Government Market SeedBudget Share Share Financing

($) ($) ($) Request ($)

Wheat FlourProduction Costs

Premix and Recurring Costs 15,233,700 2,304,705 12,291,760 768,235Capital and Equipment 131,000 131,000Subtotal 15,495,700 2,304,705 12,422,760 768,235

Public FunctionsFood Control Costs 464,579 232,290 232,290Biological Monitoring 2,042,578 2,042,578Social Marketing 2,714,500 904,833 1,809,667Subtotal 5,221,657 232,290 904,833 4,084,535

Total 20,586,387 2,536,995 13,327,593 4,852,770% of Total Budget 12% 64% 24%

Cooking OilProduction Costs

Product Development 500,000 500,000Premix and Recurring 50,769,325 7,615,399 38,076,994 5,076,933Capital and Equipment 1,425,198 213,780 1,068,898 142,520Subtotal 52,694,523 7,829,179 39,145,892 5,269,453

Public FunctionsFood Control Costs 1,713,254 1,713,254Biological Monitoring 535,183 535,183Social Marketing 5,429,000 5,429,000Subtotal 7,677,437 7,677,437


Complementary FoodsStart-Up Costs

Product Development and Advocacy 250,000 250,000

Recurring Production Costs3825.5 MT Complementary

Fortified Food 45,990,000 11,497,500 27,594,000 6,898,500

Food Control and BiologicalMonitoring Costs

Food Control 193,240 193,2401/6 of Integrated Epidemiological

Surveillance 130,500 130,500Subtotal 323,740 323,740

Marketing CostsDistribution (DULOG) 4,599,000 4,599,000Midwife/Sales Mark-Up 5,518,800 5,518,800Social Marketing Trainings 4,149,000 4,149,000Social Marketing Materials 6,021,200 6,021,200Revolving Fund for Local Midwives 286,000 286,000Subtotal 20,574,000 10,117,800 10,456,200


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as a result of this high prevalence, Pakistan suffers18,000 maternal deaths and $4.2 billion inproductivity losses annually.

In WHO’s 1994 classification of countries bylevel of vitamin A deficiency, Pakistan is in the severesubclinical category, i.e., countries needing urgentattention. Surveys estimate individual dietary intakeof vitamin A at 62% of the RDI for females and 76%for males. Biochemical analysis shows a VADprevalence of 24% among children under age 5. Astudy by Aga Khan University Hospital in 1990 ofchildren from low-income families demonstratedmarginal vitamin A deficiency in almost half thechildren examined. VAD, in combination with highrates of infectious disease and limited access to healthcare, puts these children at high risk of dying beforetheir 5th birthday. Computer models indicate morethan 43,000 child deaths a year and several billiondollars in annual health care costs to the economy asa result of this high rate of VAD.

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Wheat is the staple food of Pakistan. The reportedaverage per capita monthly consumption of wheatflour is 9.27 kilograms (kg). In rural areas, it is 10.11kg and, in urban areas, it is 7.23 kg. Consumption isrelatively constant across income classes—the percapita monthly consumption of flour by the poorestsegments of the society is 9.2 kg, and of the richest,9.1 kg. Wheat flour fortified with 60 parts per million(ppm) iron and 1.5 ppm folic acid is currently beingproduced at two mills in Peshawar for the World FoodProgram (Afghanistan). Currently, three mills invarious regions of Pakistan are conducting markettrials and testing for optimally acceptable andbioavailable iron compounds.

The technical environment for fortification atPakistan’s large-scale roller mills, which produce 50%of Pakistan’s flour, is positive. This flour is processedat 690 roller flourmills with a total grinding capacityof more than 113,000 tons per day.55 These mills areorganized into a national association. The remainingmilling is at a large and undetermined number ofsmall-scale chakki mills. Although research intofortification at chakki mills is ongoing, strategies for

commercial sustainability have yet to be established.The relative distribution of flour products made fromchakki mills versus the larger formal sector has notbeen extensively surveyed, but these small mills areestimated to produce more than half of the nation’sflour.

The Pakistan Country Team proposes a 5-yearplan to complete product development and mandateand expand flour fortification on a phased basisthroughout the large-scale sector. Capital and startupcosts are estimated at $24 million. Ten-year costs forpublic-sector capital investment and capacity-building in food control and regulatory institutions,as well as social marketing campaigns, are estimatedat $4–5 million over 10 years. The cost ofmicronutrient mix and other recurring costs areestimated to run approximately $137 million over 10years. Given the current market environment and thecompetitive situation of roller-milled versus chakkiflour, temporary premix subsidies—declining over5 years—are envisioned.

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The enrichment of vegetable ghee56 with vitamin Awas legislated in 1965, but most manufacturers havenot adhered to fortification standards. A survey of 80industrial units in 1993 found vitamin A in vegetableghee/oil to be only 40% of the required level. Monthlyper capita consumption of vegetable ghee is high at0.65 kgs, and is almost constant across urban andrural populations. While in rural settings low-incomegroups consume less than the average, the urban poorconsume 150% of the average of the highest-incomegroup. With current technologies and Pakistanistorage, distribution, and cooking conditions, theselevels of consumption are sufficient to deliver nearly20% of RDI to the lowest-income rural consumers.There are about 130 vegetable ghee and 52 solventextraction plants.

The benefits of fortification have been estimatedto be quite substantial: 42,000 lives saved andeconomic benefits of $120 million over a 10-yearperiod as a result of vitamin A fortification. The total10-year cost of oil fortification as proposed byPakistan is approximately $37 million.

55 Revised figures may put this at closer to 1,000 mills. 56 Vegetable ghee is a clarified, semifluid vegetable oil product.

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Innovative public-private collaboration to addresstransparent regulation and enforcement is required.The Government’s performance in enforcing existingfortification standards for vegetable ghee does not yetinspire confidence in its ability to manage a muchwider food fortification program. The Country Teamproposes reducing reliance on the Government bydeveloping an independent regulatory mechanism thatwill result from collaboration between the public andprivate stakeholders. The development process will tryto build on the experience of other countries and shalladopt their best practices. Ample technical assistancecan be solicited from the international community. Nocosts are currently included for this collaborativemechanism, as the concept is still in development.

Table 33 summarizes the 10-year budget for eachproposed fortification project, the amount to be providedby the Government and through market channels, andthe amount requested from donors.

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During the past 15 years, national strategies to ensurefood security and alleviate poverty have had positiveimpacts on nutritional status throughout the PRC.However, a predominantly plant and cereal-baseddiet, particularly among the poor, means continuedlow intake of key micronutrients. Anemia amongadult women in urban areas remains a public healthproblem, given a prevalence rate of 27.5%. In ruralareas, IDA prevalence is 41%. In the PRC’s westernprovinces, IDA is projected to depress economicactivity by $1.5 billion over 10 years. In theseprovinces, VAD also remains a public health problem.While life-threatening vitamin A deficiencies inchildren have been reduced to less than 20% amongall children under 5 years old nationally (the thresholdfor public health concern), the prevalence of VAD inthe five western provinces ranges far above 20%,reaching 42% in some areas.

TABLE 33: Costs of Proposed Fortification Projects for Pakistan, and the Amount Requested from Donors

Ten-Year Government Market FinancingBudget Share Share Request

($) ($) ($) Seed ($)

Wheat FlourCapital and Start-Up Costs 23,824,000 6,152,000 12,800,000 4,872,000Recurring Production Costs 137,043,730 41,113,119 68,521,865 27,408,746Food Control and Biological

Monitoring Costs 2,689,170 2,689,170Marketing Costs 2,036,620 2,036,620


Cooking OilRecurring Production Costs 31,107,220 6,221,444 21,775,054 3,110,722Capital and Start-Up CostsFood Control and Monitoring Costs 2,689,170 2,689,170Marketing Costs 2,036,620 2,036,620


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The PRC CIP focuses on initially addressingmicronutrient malnutrition in rural and less-affluentregions. The Country Team’s consumption analysisindicates that wheat flour and soy sauce are the mostplausible populationwide vehicles.57 The plan worksthrough two broad strategies: improving industrialcapacity and product quality, and building affordabledistribution channels to the poor.

The experience of the past decade indicates that,as the PRC’s economy grows, consumers are eager tomove to higher-quality products that improve theirlives. The CIP builds on these changing market trendsand consumer preferences. The strategy focuses onthe expansion and centralization of the PRC’s foodprocessing industry into more efficient productionunits delivering higher-quality foods—foods that aresafer, more hygienic, and more nutritious. Thisincludes adopting industry standards such as HACCP,GMP, and Sanitation Standard Operating Procedures(SSOP), as well as, in parallel, building effectivegovernment food regulation and control. The planworks to simultaneously address micronutrientdeficiencies, meet consumer preferences for higher-quality foods, and strengthen public and privatecapacity for product quality assurance.

The CIP recognizes that economic developmentis not always even-handed and sometimes leavesbehind those most in need. Therefore, a second keycomponent of the strategy presented in the CIP is tobuild operational links to established povertyreduction programs and create partnerships withinstitutions offering channels to the poor. The focusfor several food vehicles is piloting and expansion inthe western region, where poverty reductionagreements with many donors, such as ADB, areconcentrated. A key component in all of the proposedprograms is distribution and social marketing toprovide access and often lower pricing for low-incomeand rural populations. Requested support frominternational sources is specifically geared toaccelerating the penetration of fortified products

among the poor and at-risk. The CIP projects that themore upscale commercial markets will sustainthemselves without public support.

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Soy sauce is consumed by nearly 80% of householdsin the PRC at an average consumption of 12.6milliliters(ml) per person per day, and at nearly 11 mlper person per day in rural areas. Industryconsolidation over the past decade has resulted in 200large firms producing 42% of total soy sauce output.This process of consolidation is expected to continue.Industrial and market trials have determined that theselarge production facilities can easily adopt fortificationtechnology. Production is ongoing, and limitedquantities of fortified products are already available,albeit restricted to more affluent consumer markets.

The PRC Ministry of Health’s Centers for DiseaseControl and other public agencies, together with theChina Soy Sauce Manufacturers Association, haveagreed on a collaborative plan to engage the nation’s200 major firms with a variety of incentives to fortify.These include a marketing campaign, a fortificationlogo, and access to special markets and distributionchannels targeting rural areas. A partial subsidy forfortificant will be provided to companies thatparticipate in the earlier years of the program. The 5-year plan aims to expand from 10 producers in year 1to 200 in year 5, resulting in the fortification of 36%of total national output by 2008.

Ultimately, this program is expected to reach upto 500 million consumers nationally, including 250million in targeted northwest provinces and as manyas 129 million women and children at high risk ofanemia. Based on large-scale effectiveness trials withsoy sauce fortified with NaFeEDTA, which have foundprevalence reductions of more than 50%, it isanticipated that anemia will be reduced by one-thirdamong consumers of this product. Ten-year benefitsin increased productivity emerging from theprevention of anemia are projected at more than $2.25billion. The CIP estimates a benefit-cost ratio of 9:1.

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While in most of the PRC rice is the major staple food,people living in the northern and western regions of

57 The CIP also includes an analysis of oil fortification with vitaminA. While technically feasible, the consumption of cooking oil isprojected to affect a narrower population, has a relatively lowbenefit-cost ratio, and thus is not included in this summary.Nonetheless, fortified oil could save many lives. A description isavailable in the full CIP.

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the country consume wheat flour products as theirmajor staple. Surveys report average daily wheatconsumption of 200-400 grams per day in this region.And in targeted low-income provinces, consumptionamong the poor is equal to or greater thanconsumption among the more affluent. Therefore,wheat flour provides an opportunity to targetfortification to those most at-risk in these areas andto reduce iron and other micronutrient deficienciessubstantially.

Large-scale product development and biologicaleffectiveness trials for fortified wheat are currentlyunderway. Upon completion of these trials, the CIPproposes a three-phase expansion. In the first phase,all flour in a public distribution program targetingsome 91 million consumers in five western provinceswill be fortified. In the second phase, the programwill be expanded to the commercial market for all 12western provinces, thereby reaching more than 250million people. This phase involves upgrading themilling industry in the western PRC frompredominantly small enterprises to large-scale,efficient mills. This transition to larger-scaleproduction will be driven by investments inproduction upgrades, local legislation, regulatoryincentives (including a market-access license system),and a major marketing and education campaign. Asnew production and distribution systems are builtand consumers recognize the benefits of the higher-quality and more nutritious flour products, theenforcement of new regulations will be extendedincrementally to phase out smaller mills. The finalphase includes expansion to a comprehensivenational program.

External financing assistance is requested formarket development and communications, theextension of distribution systems, the costs ofindustry consolidation, and the development ofquality assurance mechanisms and regulatoryprocedures. Some subsidies for the lowest-incomeconsumers as well as start-up modifications for themilling industries will be offered on a short-termbasis.

At 300 grams per day, with the specifiedfortification levels, average flour consumption willprovide 100% of the RDA of iron; this high amount isneeded due to the low iron bioavailability in the dietsof people living in the western PRC. The CIP projectsthat this added intake will reduce IDA prevalence by

15%, avert more than 32,000 deaths over 10 years, andresult in more than $500 million in increasedproductivity and health care cost savings.

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The lack of adequate nutrition, including requiredmicronutrients, among children from 6- to 36-months old is the most serious form of malnutritionfound in the PRC today. Commercially processed,fortified complementary foods provide anopportunity to improve this tragic situation. In thePRC’s poorest provinces, 9–25% of children aged 9–12 months receive some commercially purchasedcomplementary food. This indicates accessibility,awareness, and perceived value. However, priceremains a major obstacle to sustained use. The PRCCountry Team’s analysis of the pricing structure forcommercial complementary foods indicates that 50%of the current high price of this product is due to thecosts of marketing, distribution, and overhead/profit.Therefore, the premise of this proposal is thatsubstantial price reductions are possible via a public-private partnership in which generic versions arepurchased, distributed, and marketed through publicchannels. Both Heinz and Nestlé have indicated theirinterest in a partnership for producing alternative,generic fortified products for consumers in westernrural areas.

Building on a current maternal and child healthoutreach project covering 40 counties across fiveprovinces of the northwest PRC, the Ministry ofHealth and UNICEF propose a market trial of thisconcept. The population of children under 3 years oldin 12,000 villages in this region is approximately750,000. Agreements to assist in distribution andpromotion are being reached with a number of localand provincial government agencies and NGOs, aswell as private distribution and retail outlets. The CIPproposes to reach 20% of the 6- to 36-month olds inthese 40 counties in the first year of the program andscale up to 50% by year 5. If successful, the partnerswill propose expanding across the whole northwestprovince area. While most production anddistribution costs will be borne by the Governmentand the market, donor support is requested for a 5-year marketing campaign. The estimated cost is $5million, including an initial $500,000 for feasibilityand project development and $100,000 annually for

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marketing and distribution activities in each of ninewestern provinces. A second strategy based on the“in-home fortification” of complementary foods isunder development. Table 34 summarizes the 10-yearbudget for each proposed fortification project, theamount to be provided by the Government andthrough market channels, and the amount requestedfrom donors.

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With prevalence rates ranging from 15% to 25%, irondeficiency anemia is projected to depress the Thaieconomy by more than $200 million annually. Over10 years, deaths attributed to lack of folic acid—viabirth defects and coronary heart disease (CHD)—areconservatively estimated at approximately 1,000annually. And many of the 36,000 CHD cases reportedin Thailand each year, which cost the nation $15million annually, could be prevented with additionalfolic acid in the diet.

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The Thai Nutrition Seal program is a public-privatecollaboration to create a comprehensive communication,advocacy, and quality assurance program that willstimulate demand for and awareness of fortifiedproducts among consumers and motivate producersto fortify. The Nutrition Seal, which includes a graphiclogo denoting the official approval of the ThaiMinistry of Public Health (MOPH), will be offeredspecifically to companies involved in the productionof fortified foods that the MOPH considers accessibleto rural, poor, and at-risk populations. Initially thisincludes three food vehicles: fish sauce fortified withiron, wheat flour with multiple vitamins and minerals,and precooked ground rice as an inexpensivecomplementary food for children aged 6–12 months.The Nutrition Seal program will conduct marketresearch and implement logo recognition campaignsand other promotions using traditional mediachannels as well as in coordination with publicinstitutions such as schools, the MOH, and NGOs. Inaddition, the launch of each fortified product line,such as fish sauce or wheat flour, will be coordinatedwith a generic, vehicle-specific marketing campaign.Nutrition Seal marketing programs will be coordinated

by the MOPH but implemented via a subcontract toan advertising and marketing agency. The programincludes a quality assurance component involvingroutine food analysis, which will be subcontracted toprivate laboratories. This cooperative public-privateapproach to quality assurance and consumerprotection may provide a model for other programs.Though ambitious, this voluntary and market-drivenapproach is considered realistic in Thailand given thehistory of close collaboration between the MOPH andthe private sector.

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Recent trials at Mahidol University and fish sauceprocessing facilities have indicated the feasibility andconsumer acceptability of fish sauce with added iron(in the form of ferrous sulfate), along with citric acidas a chelating agent. Fish sauce is widely consumedamong all socioeconomic classes at an average of 15ml per day. Production facilities are modern andcentralized, with 20 producers holding 80% of themarket. Therefore, fish sauce is considered a feasiblevehicle for delivering additional iron to the vastmajority of the Thai population, including those atrisk. Fortification sufficient to deliver 33% of the RDAfor iron at average consumption level is estimated tocost 0.31 cents per 750 ml bottle. The CIP proposesexpanding fortification to 100% of fish sauceproduced at the 20 largest plants over 4 years.

In addition to ongoing Nutrition Seal promotions,an intensive 3-year generic marketing and mediacampaign is planned in conjunction with the FishSauce Producers Association. The Thailand CIPproposes incentives for participation such as afortification subsidy for producers participating in theearly years of the program. IDA rates are estimatedto fall 8-10% through this intervention. Ten-yearreductions in economic losses are projected at $160million.

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Consumption of wheat flour in Thailand has grownsteadily. Eight large, modern plants currently have thecapability for fortification, and can adopt fortificationtechnology quickly and efficiently. It is consideredfeasible as well as inexpensive to implementfortification and assure quality. The CIP projects that

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TABLE 34: Costs of Proposed Fortification Projects for the PRC, and the Amount Requested from Donors

Tzen-Year Government Market SeedBudget Share Share Financing

($) ($) ($) Request ($)

Wheat FlourRecurring Production Costs 101,081,100 101,081,100

Capital and Start-Up CostsFacilities and Equipment 10,000,000 10,000,000Laboratory Equipment 41,950,000 1,650,000 36,400,000 3,900,000Q/A System (HAACP, GMP, SSOP) 2,500,000 2,500,000Subtotal 54,450,000 1,650,000 48,900,000 3,900,000

Food Control and BiologicalMonitoring CostsTraining 900,000 792,000 108,000Nutrition Monitoring 70,000 70,000Food Control 1,224,000 1,224,000Subtotal 2,194,000 792,000 1,402,000

Marketing CostsSocial Marketing/Seal 26,400,000 8,200,000 14,800,000 3,400,000


Soy SauceRecurring Production Costs

Fortificant 198,030,000 450,000 196,980,000 600,000Plant Operations (HAACP, GMP, SSOP) 15,750,000 350,000 15,050,000 350,000Subtotal 213,780,000 800,000 212,030,000 950,000

Capital CostsProduction and Q/C Analysis Equipment 5,625,000 5,363,000 262,000

Food Control and BiologicalMonitoring Costs 4,900,000 4,304,000 596,000

Marketing CostsLegislation and Advocacy 20,000 20,000Social Marketing/Seal 15,913,000 500,000 14,150,000 1,263,000Subtotal 15,933,000 520,000 14,150,000 1,263,000


Complementary FoodsRecurring Production Costs

Recurring CostsFortificant 3,144,600 64,000 3,064,600 16,000Plant Operations (HAACP, GMP, SSOP) 275,000 80,000 145,000 50,000Subtotal 3,419,600 144,000 3,209,600 66,000

Capital CostsQ/A Analysis Equipment 160,000 110,000 50,000

Food Control and BiologicalMonitoring Costs 1,943,170 1,897,000 46,170

Marketing CostsSocial Marketing/Seal 8,800,000 2,800,000 1,000,000 5,000,000


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all eight plants will fortify 10% of their productionduring the first year of the program, reaching 50% inthe second year, and 100% in year 3. Since flour ismainly an industrial rather than consumer product,a modest, one-year public education campaign isplanned via the Nutrition Seal program

While the Thai population, particularly the mostat-risk in poor and rural areas, predominantlyconsumes rice, consumption surveys indicate thatmore than 11% of the rural, low-income populationconsumes an average of 30 grams per day of flourproducts. Thirty percent of the low-income urbanpopulation consumes more than 70 grams per day.At these consumption levels, fortification with 60 ppmiron and 2 ppm folic acid can deliver an average of10-30% of RDA for both micronutrients. Prevalencereduction is estimated at about 2%, suggesting 10-year savings of more than $13 million in current andfuture productivity lost to IDA. Given the low cost ofwheat flour fortification, these reductions show abenefit-cost ratio of nearly 5:1.

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In Thailand, foods for children aged 6–12 months aremostly home-prepared, rice-based foods. Theseproducts are known to be low in key vitamins andminerals. A commercial preparation of dried, groundrice is increasingly popular among low- to medium-income populations due to time saved in preparation.

Using available technology, Mahidol University,along with a major producer, has successfully fortifiedthis product with multiple micronutrients, includingcalcium, iron, vitamin B

1, and folic acid. The

production technology is simple and can be easilyadapted by related industries. The incremental costfor micronutrient premix, as well as energy, labor, andnew packaging, is estimated at $0.004 per package orabout $0.036 per child per year. The producercurrently preparing to launch this product can supply10% of children ages 6–12 months who are currentlybeing fed commercial complementary foods, a totalof about 25,000 children. With advocacy and socialmarketing via the Nutrition Seal program, it isexpected that within 5 years an additional fivecompanies will enter this market, enabling thefortified product to reach 250,000 infants (50% of thelow- to medium-income 6- to 12-month olds).Alternatively, the current producers may expand

production facilities to increase market share. Giventhe need to increase supply and generate demand fora new line of product, the Nutrition Seal marketingcampaign in support of this product will be relativelyintense (for this narrow market) and will continueover a number of years.

Table 35 summarizes the 10-year budget for eachproposed fortification project, the amount to beprovided by the Government and through marketchannels, and the amount requested from donors.

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Indicators of health and wealth often rise and fall intandem. In Viet Nam, however, despite a per capitaGDP of only $410, many health indicators are muchbetter than might be expected. This is in part due togovernment investment in and successfulimplementation of public health programs. Forexample, overall child mortality has dropped to 30/1,000 live births, much lower than most countrieswith comparable per capita incomes.

In large part, this low child mortality rate is dueto the distribution of vitamin A capsules, whichlowered VAD among children to 22%. Micronutrientdeficiencies remain a severe public-health problemin Viet Nam, however. VAD still accounts for 4,000–5,000 child deaths annually. The national prevalenceof anemia in women and children remains alarminglyhigh at 40–50%. As a consequence, nearly 16,000women are expected to die in childbirth due toanemia-related complications over the next 10 years.With no improvement, current and futureproductivity losses attributable to IDA will mount to$150 million annually. The CIP focuses on anemiareduction through iron fortification of several foodvehicles.

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The National Strategy for Nutrition, ratified by VietNam’s Prime Minister on 22 February 2001, affirmedfood fortification as an important measure to controlmicronutrient malnutrition and contribute to povertyreduction and human resource development. Thestated goal is to provide 30% of the RDA for vitaminA and iron to at-risk households via fortified foodsby 2012. A National Food Fortification Steering

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TABLE 35: Costs of Proposed Fortification Projects for Thailand, and the Amount Requested from Donors


Share ($) ($) ($) Request ($)

Wheat FlourPrivate Sector

Production Costs 1,958,534 1,816,534 142,000Analysis Costs 216,090 216,090

Public FunctionsNutrition Monitoring 145,370 106,913 38,457Social Marketing 385,313 100,313 285,000Food Control 54,010 30,000 24,010

Total 2,759,317 237,226 2,032,624 489,467% of Total Budget 9% 74% 17%

Fish SaucePrivate Sector

Fortificant 22,926,009 22,841,009 85,000Analysis 10,524 10,524

Public FunctionsNutrition Monitoring 195,370 156,913 38,457Social Marketing 1,315,625 220,000 1,095,625Food Control 25,714 20,000 5,714

Total 24,462,719 396,914 22,851,533 1,139,796% of Total Budget 2% 93% 5%

Complementary FoodPrivate Sector

Recurring Costs 3,215,476 3,015,476 200,000Analysis 14,167 14,167

Public FunctionsNutrition Monitoring 175,370 136,913 38,457Social Marketing 365,313 79,999 285,313Food Control 26,310 19,999 6,310


Committee has been established under the leadershipof the Ministry of Health, with technical coordinationby the National Institute of Nutrition. The committeerecognizes that, to advocate and plan for foodfortification, it is essential to establish mechanismsto legally control the process. Therefore, the CIPproposes building national food regulatory andcontrol structures as well as nutrition surveillanceand monitoring systems. These functions will becoordinated by the newly established MOH FoodControl Authority in conjunction with localPreventive Health Centers and other governmentministries, as well as municipal governments andcommunes. Technical and operational support willbe provided by the NIN. The committee is developing

a series of supportive policies and regulations,including the elimination of a 30% duty that currentlyapplies to imported micronutrient mixes.

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Fish sauce is consumed by more than 80% ofVietnamese. High consumption among lowersocioeconomic groups—averaging more than 8 mlper day—indicates that fortification with iron candeliver a significant portion of the RDA to populationsat risk of anemia. With 70% of the productioncentralized in 30 large facilities—many controlled orpartially owned by the Ministry of Fisheries—fortification is considered technically feasible and

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cost-effective. The CIP outlines a 3-year phased planto fortify all medium- and low-quality fish sauceproduced at these large plants. Premium-quality fishsauce, with a 50-100% higher retail price, will not bepart of the program. As Viet Nam’s food-quality andsafety systems are implemented, 200 or more smallerfish sauce operations will be upgraded and/orconsolidated with the larger operations. Consequently,the market share of fortified fish sauce is projectedto rise from 70% to 90% by the 10th year of theinvestment plan.

Product development and testing have beensystematic. Early trials indicated that traditional ironforms were organoleptically unacceptable in fishsauce. The compound NaFeEDTA, newly approved bythe Joint FAO/WHO Expert Committee on FoodAdditives, was found to perform well in fish sauce. A1998 field survey found that factories could addNaFeEDTA to fish sauce with only minor processmodifications. NaFeEDTA offers at least twice thebioavailability of traditional iron compounds,particularly in the cereal- and legume-based diets ofthe poor. In fact, in large-scale market trials of morethan 14,000 consumers, NaFeEDTA reduced anemiaby 50%. Consumer reaction is positive and acceptancehas been demonstrated. In 2002, the Ministry ofHealth in Viet Nam approved NaFeEDTA as a foodadditive. The MOH, in conjunction with the Ministryof Fisheries and private producers, proposes to mountan extensive marketing campaign. Conservativelyprojecting a conservative 25% decline in theprevalence of anemia (half that achieved in theeffectiveness trials), 10-year gains in current andfuture productivity should surpass $250 million,indicating a benefit-cost ratio of nearly 12:1.

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Surveys indicate that, due to limited availability and highcost, only 5-10% of low-income rural Vietnamesechildren consume processed complementary foods.Anemia rates among this vulnerable group are oftenmore than 60%. While there is no large-scale domesticproduction of complementary foods in Viet Nam, apilot program in three rural communities hasdemonstrated the technical and commercialfeasibility of producing fortified complementaryfoods at the community level. The pilot program isrun by rural entrepreneurs with assistance from NIN,

the Viet Nam Women’s Union, and the French NGOInstitute de Recherche Pour le Development. Theproduction of Favina, a complementary food productdiscussed previously, utilizes simple extrusiontechnologies and locally purchased soybeans, rice,and other materials. The NIN and IRD train localpersonnel, assure product quality, and supplymicronutrient mix, packaging, and education andmarketing materials. Distribution through ruralcommercial outlets is complemented by an innovativehome-visit sales program coordinated through theVWU. Favina has proven acceptable to the targetpopulation in terms of taste, preparation, packaging,and, most significantly, price. Sales have beensufficient to provide an attractive profit for producersand supplementary income for the VWU rural salesforce. Preliminary biological evaluation by the IRDand the NIN indicate that anemia rates are cut bymore than half. Data for other micronutrientdeficiencies are not yet available.

Based on these product and marketdevelopment activities, the CIP outlines a 10-yearprogram of expansion to 97 production lines at 50production sites strategically located in rural areasof Viet Nam. These would be sufficient to produce8,500 MT of the product annually and reach 15% ofthe most at-risk rural 6- to 24-month olds, orapproximately 360,000 children annually. The VWUis committed to marshalling local investment andproviding their volunteer infrastructure as agrassroots sales force.

In addition to providing critical nutrients to themost vulnerable 6- to 24-month-old age group, theprogram is attractive to a number of nationalstakeholders because it targets high-risk povertyareas, provides a commercial outlet for localagricultural products, and creates entrepreneurialopportunities at the grassroots level. Therefore,contributions from government agriculture, ruralemployment, and poverty reduction programs areanticipated. Costs are estimated at $44 million, withanother $22 million for the purchase of raw materials.

+%��

Since 1996, wheat flour consumption in Viet Nam hasrisen nearly 1,000%, from 79,000 MT to more than700,000 MT annually. While average per capitaconsumption remains relatively low, a recent survey

�� $��

in low-income, rural areas shows that 10–20% ofwomen and children consume 100-140 grams perday of wheat products—sufficient to provide anadditional 6-8 mg per day of iron (fortified at 60ppm). Fortification is feasible in 16 relatively largeand modern mills. While flour fortification isrelatively inexpensive to implement, the narrowconsumption profile yields limited but stillsignificant impact. The CIP’s impact analysissuggests anemia prevalence decreases of 6-7%among wheat consumers and about 2% nationwide.These small decreases are sufficient to prevent morethan $35 million in productivity losses over 10 years.Savings in health care costs from reduced birthdefects and heart diseases as a result of additional

folic acid intake were estimated at an additional $2million. Given the low cost of flour fortification inViet Nam, estimated at less than half a milliondollars annually, the benefit-cost ratio isapproximately 9:1. Given this positive projection, theNational Fortification Steering Committee requests$150,000 to initiate the legally mandated process forefficacy trials to move toward the nationalfortification of wheat flour at levels recommendedat ADB’s Regional Workshop on Flour and CookingFortification (November 2001).

Table 36 shows the 10-year budget for eachproposed project, the amount to be provided by theGovernment and through market channels, and theamount requested from donors.

��

TABLE 36: Costs of Proposed Fortification Projects for Viet Nam, and the Amount Requested from Donors


($) ($) ($) Request ($)

Wheat FlourFish SauceProduction Costs

Capital and Equipment 884,000 707,200 176,800Premix and Recurring Costs 15,450,000 3,090,000 10,815,000 1,545,000Subtotal 16,334,000 3,090,000 11,522,200 1,721,800

Public FunctionsFood Control Costs 1,753,000 876,500 876,500Nutrition Monitoring 410,000 410,000

Social Marketing 3,243,000 1,081,000 1,081,000 1,081,000Subtotal 5,406,000 1,957,500 1,081,000 2,367,500


Complementary FoodsCapital and Start-Up Costs

52 Production Units: Facilities and 1,230,280 738,168 492,112Equipment*

Recurring Production Costs** 34,626,639 1,731,332 31,163,975 1,731,332

Food Control and BiologicalMonitoring Costs 805,000 805,000

Marketing CostsStart-Up Training for VWU 2,388,420 1,194,210 1,194,210Annual Marketing 4,587,014 458,701 1,834,805 2,293,507Subtotal 6,975,434 1,652,911 1,834,805 3,487,717


Wheat FlourProduction Costs

Premix and Recurring Costs 2,448,510 2,326,085 122,426Capital and Equipment 171,700Subtotal 2,620,210 2,326,085 122,426

Public FunctionsFood Control Costs 285,000 142,500 142,500Nutrition Monitoring 410,000 205,000 205,000Social Marketing 500,000 200,000 100,000 200,000Subtotal 1,195,000 547,500 100,000 547,500


* Includes all land, building renovation, extrusion, and packaging equipment.** Includes all labor, packaging, overhead, 7% tax, and fortificant. Does not include raw materials (soy, sugar, rice etc.).

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��

��(Team Leader)Deputy, Coordinating Ministry of Economic AffairsChairman of National Food Fortification CommissionJakarta Pusat, IndonesiaIndonesiaPhone No. 62 21 3521978Fax No. 62 21 3521971/ 3156541e-mail: [email protected]

�� (Principal Investigator)Executive DirectorCenter for Food and Nutrition Policy Studies BogorAgricultural University and Principal InvestigatorNational Food Fortification CommissionBogor, IndonesiaPhone No. 62 251 621363Fax No. 62 251 625846/662276e-mail: [email protected]

��Director GeneralDirectorate General of Chemical,Agro, and Forest-Based IndustryDepartment of Industry and TradeJakarta, Indonesia

��

This section lists the many individuals who contributed to the development of the Country Investment Plans.Listed first are individuals who served on the research and planning teams to develop each country’s CIP,and/or who attended international capacity-building workshops as country delegates. Team leaders andprincipal investigators are noted for each country. Next is listed the principals from the Asian DevelopmentBank, the sponsoring and convening institution. Finally, under The Keystone Center heading are listed theconsultants who led the design and implementation of the workshops and consulted with the Country Teamson the technical, economic, and other aspects of program planning and CIP development.

�� Executive DirectorFood and Beverage AssociationJakarta, Indonesia

��HeadSub-Directorate of Food ConsumptionDirectorate of Community NutritionMinistry of HealthJakarta, Indonesia

��Staff of the Deputy Coordinating Ministry ofEconomic AffairsJakarta, IndonesiaPhone No. 62 21 3521861Fax No. 62 21 3521855e-mail: [email protected]

�� MA, Deputy Director of External FundsDirectorate General of BudgetMinistry of FinanceJakarta, Indonesia

��

��DirectorDirectorate of Community NutritionMinistry of HealthJakarta Selatan, Indonesia

�� National Food Fortification CommissionJakarta, Indonesia

��Deputy Director of External FundsDirectorate General of BudgetMinistry of FinanceJakarta, Indonesia

��DirectorateAgro IndustryMinistry of Trade and IndustryJakarta, Indonesia

��PT Indo FarmaJakarta, Indonesia

��DirectorFood Inspection and CertificationFood and Drug AdministrationJakarta, Indonesia

�� PT Gizindo Prima NusantaraJakarta, Indonesia

�� PT Gizindo Prima NusantaraJakarta, Indonesia

�� President DirectorPT Ogan Komelir HilirPT Parkepunan Mitra Ogan PalembangJakarta, Indonesia

��Director of Community Nutrition

Ministry of HealthJakarta Selatan, Indonesia

��Marketing ManagerPT Indofood Sukses MakmurBogasari Flour MillsJakarta, Indonesia

��

��(Team Leader)Assistant Chief, Nutrition SectionPlanning and Development DivisionIslamabad, PakistanPhone No. 9251 9211348/2211278Fax No. 9251 9211347/1370/1371e-mail: [email protected] [email protected]

��(Principal Investigator)Director, Pakistan Institute of DevelopmentEconomicsIslamabad, PakistanPhone No. 9251 9217879/9266108Fax No. 9251 9206407e-mail : [email protected] [email protected]

��Professor and ChairmanDepartment of Food TechnologyUniversity of AgricultureFaisalabad, Pakistan

�� Senior Joint SecretaryEconomic Affairs DivisionMinistry of FinanceIslamabad, Pakistan

��Deputy Director GeneralMinistry of HealthIslamabad, Pakistan

��%�� &��

�� ChairmanPakistan Flour Mills AssociationLahore, Pakistan�� DirectorSufi Cooking IndustryIslamabad, Pakistan

��

�� (Team Leader)DirectorCenter for Public Nutrition and Development of ChinaBeijing, People’s Republic of ChinaPhone No. 8610 63908082/8083Fax No. 8610 63908486e-mail: [email protected]

�� (Principal Investigator)Economic officerChinese Mission to the European CommunitiesAvenue de Tervuren 443-4451150 Wolluwe St. Pierre, Bruxelles, BelgiumPhone No. 322 7794554e-mail: [email protected]

�� Associate ProfessorChinese Academy of Preventive Medecine

�� Chinese Academy of Preventive MedicineBeijing, PRCPhone No. 8610 63170892Fax No. 8610 83159164e-mail: [email protected]

�� ProfessorInstitute of Nutrition and Food HygieneBeijing, PRC

��Project Officer

Center for Public Nutrition and Development ofChinaBeijing, PRC

��General ManagerBeijing Gu Chuan Flour GroupBeijing, PRC

�� Deputy DirectorMarketing DepartmentFulingmeng Oil Company

�� Chinese Academy of Preventive MedicineBeijing, PRC

��International DepartmentMinistry of FinanceBeijing, PRC

��Deputy ManagerBeijing Gu Chuan Flour GroupBeijing, PRC

�� Associate ProfessorChinese Academy of Preventive MedicineBeijing, PRC

��OfficialState Grain AdministrationBeijing, PRC

��Assistant ConsultantDivision of NCD ControlDepartment of Disease ControlMinistry of HealthBeijing, PRC

��DirectorChina Cereal and Oil Institute

��

�� Deputy DirectorCenter for Public Nutrition and Development of ChinaBeijing, PRC

��

�� (Team Leader)DirectorNutrition DivisionMinistry of HealthNonthaburi, ThailandPhone No. 662 5904328Fax No. 5904339/5918162e-mail: [email protected]

�� (Principal Investigator)Associate Professor and Deputy DirectorInstitute of NutritionMahidol UniversitySalaya, ThailandPhone No. 662 8002380 ext.416Fax No. 662 4419344e-mail: [email protected]

��Palm Oil Marketing ExpertWheat Flour IndustryBangkok, Thailand

��Expert in Food StandardThai Food and Drug AdministrationMinistry of Public HealthNonthaburi, Thailand

�� PresidentNutrition Association of ThailandNutrition DivisionDepartment of HealthMinistry of Public HealthNonthaburi, Thailand

�� Food SpecialistFood Control DivisionFood and Drug AdministrationMinistry of Public HealthNonthaburi, Thailand

�� LecturerFood Science and Technology DivisionInstitute of NutritionMahidol UniversitySalaya, Thailand

�� Regional Marketing ManagerHuman Nutrition and Health DepartmentBangkok, Thailand

��Nutrition DivisionMinistry of HealthNontharubi, Thailand

�� Vice ChairmanFood Processing Industry ClubThe Federation of Thai IndustryNestle (Thailand)Bangkok, Thailand

�� Nutrition DivisionDepartment of HealthMinistry of Public HealthNonthaburi, Thailand

�� Marketing ManagerWheat Flour Miller (UFM)Bangkok, Thailand

�� Professor and Director for Research and Academic

AffairsInstitute of Nutrition

��%�� &��

Mahidol UniversitySalaya, ThailandPhone No. 662 4419740/8002380 ext305Fax No. 662 4419344e-mail: [email protected]

�� General ManagerRayong Fish Sauce Industry Co., Ltd.Bangkok, Thailand

��

��(Team Leader)DirectorNational Institute of NutritionMinistry of HealthHanoi, Viet NamPhone No. 844 9716058Fax No. 844 9717885e-mail: [email protected]

��(Principal Investigator)Head of Micronutrient Research UnitNational Institute of NutritionHanoi, Viet NamPhone No. 844 9713784/9719280Fax No. 844 9717885e-mail: [email protected]

��Vice Director of Food AdministrationMinistry of HealthHanoi, Viet Nam

��EngineerHanoi, Viet Nam

��Secretary of Food Fortification ProgramNational Institute of NutritionHanoi, Viet NamPhone No. 844 9713784/9719280Fax No. 844 9717885e-mail: [email protected]

��Head of Food Registration UnitFood AdministrationMinistry of HealthHanoi, Viet Nam

��Officer of Department Technology and Product

Quality ManagementMinistry of IndustryHanoi, Viet Nam

��Vice DirectorPlanning DepartmentMinistry of HealthHanoi, Viet Nam

��Deputy DirectorForeign DepartmentState Bank of Viet NamHanoi, Viet Nam

��Director of Food Administration DepartmentMinistry of HealthHanoi, Viet Nam

��Vice DirectorFood Technology DepartmentBienhoa Sugar CompanyHanoi, Viet Nam

��Vice DirectorFood Technology DepartmentHaiha Confectionery CompanyHanoi, Viet Nam

��Vice Director of Cathai Fishery Processing

Service CompanyHanoi, Viet Nam

��

��

�� Senior Health and Nutrition Specialist (retired)59 Edwin StreetDorchester, Massachusetts 02124 USAPhone No. 1(617) 822-9474e-mail: [email protected]

�� !

�� (Co-Team Leader)Private Investment SpecialistPresident, The Keystone CenterKeystone, Colorado, USAPhone No. 202 4521590Fax No. 202 4521138e-mail: [email protected]

�� (Co-Team Leader)Communication SpecialistAtlanta, Georgia, USAPhone No. 404 3151845/3156466Fax No. 404 3151845e-mail: [email protected] [email protected]

�� Cooking Oil SpecialistVice PresidentCaravelle FoodsToronto, Canada

��Public Sector Investment SpecialistPresidentCenter for Economic Policy ResearchQuezon City, PhilippinesPhone No. 632 4152156Fax No. 632 7212032e-mail: [email protected]

��Director, Science and Public PolicyThe Keystone CenterKeystone, Colorado, USA

��Health EconomistSocial Sectors Development StrategiesSturgeon Bay, Wisconsin, USA

�� Flour Technology SpecialistPresidentQuican, Inc.Toronto, Canada

�� Regulatory and Trade Policy SpecialistAtlanta, Georgia, USA

�� Complementary Foods SpecialistPalm Desert, California, USA

�� Senior AssociateThe Keystone CenterWashington, DC, USAPhone No. 202 4521590ext.16/1301 6491865Fax No. 202 4521138e-mail: [email protected]

�� Nutrition Monitoring and Surveillance SpecialistAssociate ProfessorDepartment of EpidemiologyEmory UniversityAtlanta, Georgia, USA

�� EditorLarmer ConsultingWatertown, Massachusetts, USA

�� Quality Assurance and Food Control SpecialistArlington, Virginia, USA

��

The following consensus statements were developed at the regional workshops discussed in Chapter 1.

�� Regional Workshop on Flour and Cooking Oil Fortification

6–8 November 2001Asian Development Bank

Manila, Philippines

After 3 days of deliberation, participants from five Asian nations,58 attending a workshop on wheat flour andcooking oil fortification on 6–8 November 2001, sponsored by the Asian Development Bank, agreed on the followingset of principles, strategies, and actions.

1. We recognize:

• that Vitamin A Deficiency (VAD) is awidespread problem with well-documentedhuman and economic impacts;

• that improved Vitamin A status worldwidewould be expected to prevent approximately1.3–2.5 million deaths among children under5 years of age (WHO 1993);

• that improvement of Vitamin A status in theyoung child population leads to a reduction of23% in all-cause child mortality (UNICEF 1993);

• that improved Vitamin A status can reducemortality during pregnancy;

• that prevalence of VAD in this region isgenerally considerably higher than the WHOcut-off point, ranging from 20% to 50% amongcountries participating in this initiative.

2. We affirm:

• that the addition of Vitamin A to all cookingoil59 sold for human consumption is a well-established method for eliminating VAD as asocietal problem;

• that fortification of cooking oil with Vitamin Ais an inexpensive and effective intervention toreduce VAD;

• that fortification of cooking oil with Vitamin A isfeasible technically, economically, and politically;

• that successful models of fortification ofcooking oil products with Vitamin A alreadyexist and are operating in the Asian market;

• that people of the region should have access toaffordable, safe, and efficacious fortified foodsas a permanent commitment to the eliminationof micronutrient malnutrition;

58 Indonesia, Pakistan, the PRC, Thailand, and Viet Nam. Anunofficial delegation from India was also present. The Governmentof India reserved its opinion regarding the consensus statement.

59 The important contribution of other oil-based products (e.g.,shortening, margarine) was fully recognized by the group as carriersfor Vitamin A. However, it was felt by participants that these otherproducts might not be as well targeted to at-risk populations.

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• that the consequences of not implementingfortification programs at the national level willbe high mortality and morbidity rates forchildren and mothers, poor child development,low educational achievement of children, anddecreased earnings and economic growth;

• that significant benefits can also be achievedby simultaneously addressing micronutrientmalnutrition through regional alliances,networks, and institutions.

3. We recommend:

We therefore recommend the following national andregional actions to achieve reduction of VAD in theregion.

NATIONAL ACTIONS

• Pass mandatory oil fortification laws orregulations in all participating countries in theregion by 2006. Implementation schedules willbe developed on a country-by-country basisdepending upon the size and complexity of thefortification projects. The minimum level offortification should be 25 IU per gram, withprecise levels to be determined by the individualcountries. Alternatively, the minimum level offortification should deliver 25% of RDA ofVitamin A per average daily consumption, afteraccounting for all losses.

• Develop and effectively implement programsfor universal oil fortification within allcountries in the region.

• All countries in the region should takemeasures to ensure consumer acceptanceby embarking upon consumer educationcampaigns regarding the health benefits, safety,and quality of fortified oil.

• All countries in the region should ensureadequate regulatory control and enforcementof fortification laws to ensure successfulimplementation.

• Each country government should facilitate arobust public-private partnership to ensure thesustainability of fortification programs and toprovide ample controls to safeguard the safetyand health of the consuming public.

• In order to assist with the development ofconsumer confidence in and nationalconsensus around fortified oils, research shouldbe conducted into stability, efficacy, andpackaging options according to each country’sproduction and consumption circumstances.Existing scientific literature can serve as usefulreference.

• Countries should urge the elimination ofnontariff trade barriers to food fortification, topromote timely implementation andsustainability.

REGIONAL ACTIONS

• Establish a Regional Center of Excellence inFood Fortification, to undertake the followingactivities regarding cooking oil fortification:

• Development of regional and internationaltrade standards and guidelines for fortifiedfoods

• Development of quality assurance procedures• Provision of relevant training and capacity

building• Research into stability, efficacy, and new

packaging materials in order improvecontinuously upon the quality and effectivenessof end products

• Take measures to reduce the price of thefortificant, including investments in producingthe fortificant in the region.

• Secure strategic investment in private/publicquality assurance capability in the region,including investment in adequate training andtesting facilities.

• Participating countries hope that ADB willcontinue to play a constructive leadership rolein supporting fortification efforts in theregion.

4. Signatories:

The participating delegations from Viet Nam,Thailand, People’s Republic of China, Pakistan, andIndonesia endorsed this statement by consensusduring the workshop. Delegations represented abroad partnership of public- and private-sectorrepresentatives.

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�� Regional Workshop on Flour and Cooking Oil Fortification

6–8 November 2001Asian Development Bank

Manila, Philippines

After 3 days of deliberation, participants from five Asian nations60 attending a workshop on wheat flour andcooking oil fortification on 6-8 November 2001, sponsored by the Asian Development Bank, agreed on the followingset of principles, strategies, and actions.

a feasible, affordable, and efficacious methodto reduce the prevalence of these keymicronutrient deficiencies;

• that white flour of ash content up to 0.80% shouldinclude a basic package of micronutrientsaccording to the following guidelines as an initialreference point:

1. 60 ppm iron as electrolytic iron61 or 30 ppmiron as ferrous sulfate

2. 30 ppm zinc3. 2.5 ppm thiamine4. 4 ppm riboflavin5. 2 ppm folic acid

• that atta flours (unrefined brown flours) orflours with ash content of more than 0.80%include a basic package of micronutrientsaccording to the following guidelines:

1. 60 ppm electrolytic iron2. 30ppm zinc3. 2 ppm folic acid

• that when considered feasible and affordable,standards for electrolytic iron in atta flourssubstitute equivalent levels of sodium iron-EDTA or disodium EDTA plus ferrous sulfate;

• that where these deficiencies are of high publichealth concern, the basic package above beenhanced with the addition of Vitamin A, Niacin,B

6, B

12, and/or calcium at levels delivering 25% of

RDA at average levels of daily consumption;

1. We recognize:

• that iron deficiency is causing serious damageto social and economic development throughpoorer pregnancy outcomes, impaired cognitionespecially in young children, reduced workcapacity, and increased morbidity frominfectious diseases;

• that zinc deficiency is associated with loweredimmunity, slower growth, and increased risk ofheavy metal poisoning in contaminatedenvironments;

• that folic acid deficiency in women who becomepregnant contributes to congenital abnormalitiesof the central nervous system of the newborn andis an independent risk factor for coronary heartdisease, and contributes to anemia;

• that the key B-vitamins thiamin, riboflavin, andniacin along with most iron and folic acidare removed during milling, contributing tomicronutrient malnutrition among populationswhose diets include noodles, bread, and otherflour-based foods;

• that while additional research and developmentis needed in specific areas to define optimaliron fortification approaches, it is alsorecognized that nutrition delayed is equivalentto nutrition denied, and therefore countries ofthe region should move forward consistent withthe current evidence and scientific consensus.

2. We affirm:

• that the addition of micronutrients to flouraccording to the guidelines elaborated below is

60 Indonesia, Pakistan, PRC, Thailand, and Viet Nam. An unofficialdelegation from India was also present. The Government of Indiareserved its opinion regarding this consensus statement.

61 Electrolytic iron appears to be the best choice of the elemental ironpowders at the current state of our knowledge. If electrolytic ironis not available at a reasonable cost, another type of elemental ironpowder may need to be considered. Whatever type of elementaliron powder is selected, it is recommended that 325 mesh (<45microns) be used rather than 100 mesh as specified for reducediron in the current FCC guidelines.

��

• that there are no capacity constraints for privateroller millers to implement the guidelines aboveand to provide affordable fortified flour to theirconsumers;

• and that the consequences of not implementingfortification programs at the national level willbe poor child development, low educationalachievement of children, and decreasedearnings and economic growth.

3. We therefore pledge

• that governments and producers work togethertowards a goal of fortifying all flour used in thepreparation of staple foods such as leavenedand unleavened breads, noodles, pastas,biscuits, and other flour products that areconsumed by populations at risk of micro-nutrient deficiencies by the year 2006.

4. We recognize that the achievement of thesecritical goals will require:

• that countries of the region establish anenabling environment for fortification of flourby working towards national mandatorystandards for all flour used in the preparationof staple foods such as breads, noodles, pastas,biscuits, and other flour products that areconsumed by populations at-risk of micro-nutrient deficiencies;

• that food laws and regulations be reviewed andamended to ensure they support and enable theaddition of all essential micronutrients inappropriate food carriers;

• that public policies and regulationsconstraining or impeding investment in foodfortification be reviewed and amended andthat all nations collaborate to produce uniformor consistent standards based on internationalbest practices;

• that customs protocols and trade regulationsbe revised or enacted to facilitate the importand export of certified and safe fortified foods;

• that the cost of food fortification mustultimately be borne by the producer and theconsumer, but a transition period of costsharing between the public and private sectorsmay be necessary;

• that efforts be continued to inform the publicof the benefits of fortified flour to the learningand earning capacities of the region’s children;

• that food fortification must be a part of acomprehensive strategy of anemia preventionand control that includes supplementation,dietary diversification, breast feedingpromotion, and other public health measures.

NATIONAL ACTIONS

5. We further recognize that the achievementof flour fortification will require thefollowing coordinated actions at national,provincial, and local levels:

• Pass and effectively implement mandatorylaws for flour fortification in a timely fashion,that these laws reflect consideration of theguidelines for the minimum basic packageand enhanced package of micronutrientselaborated above.

• Enhance current regulatory frameworks andbuild capacity to implement food controland enforcement functions in a systematic,transparent, and fair manner.

• Establish a monitoring framework to assess theeffectiveness of flour fortification on thepopulation with particular emphasis onpopulations defined as at-risk of micronutrientdeficiencies.

• Urge the elimination of all tariffs, sales taxes,value-added taxes, and other fees or charges onthe inputs to fortification and fortified foodproducts.

• Systematically review all tariffs, sales taxes,value-added taxes, and other fees orgovernment charges that impact the price offortified flour products to identify appropriatemechanisms for government cost sharing untilsuch time as the costs of fortification can befully passed on to the consumer.

• Systematically review all government sourcesof revenue derived from the import and sale ofwheat, flour, and flour products to identifyappropriate mechanisms to ensure full supportto government regulatory and enforcementfunctions, nutrition surveillance andmonitoring functions, and public educationand social marketing of fortified flour.

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• Collaboration among public and private sectorsto ensure that any consumer price rise infortified products is reasonable and fairlyreflects only the incremental costs of flourfortification.

• Collaboration among government, industry,and international donors to define sustainablemechanisms passing all costs of fortification,quality assurance, enforcement, and marketingto the consumer as soon as feasible.

• Integrate fortification into national programsand policies, including a requirement that allpublic purchases of flour and flour products befortified.

• In countries where the small milling sectorrepresents a significant proportion of flourproduction, move forward on an acceleratedbasis to address technical and commercialconstraints at the small mill (chakki).

• Promote an expanded public/private sectordialogue on the fortification of wheat flour andorganize advocacy events to increase programand donor support.

• Develop and implement a communicationstrategy to raise public awareness of thebenefits of fortified wheat flour and wheat flourproducts and promote increased consumerpreference for these products.

REGIONAL ACTIONS

6. We further recognize that the achievementof flour fortification will require thefollowing coordinated actions at theregional level:

• Develop a framework for drafting and proposingharmonized regional and international tradestandards and guidelines for fortified foods.

• Develop regional activities such as roundtables,joint reports, and crosscountry training focusingon legislation, communication strategies, andcapacity building for public and private sectorsincluding the establishment of a regional millers’association.

• Open a dialogue with regional and globalsuppliers of premix, microfeeders, and otherfortification-related technology to explorepartnerships for cost-effective regional produc-tion and distribution of these critical inputs.

• Demonstrate through regional policy dialogueto economic planning agencies and the generalpublic the large economic damage caused bypoor nutrition and the proven low-costsolutions available to the region.

• Advocate resource mobilization by governmentsfrom domestic budgets, public and privatesectors, and strategic investments fromdevelopment partners, and share countryexperience in regional forums.

• Review and recommend financial and capacity-building incentives to sustain food fortificationand its expansion to other essential foodswidely consumed by the poor.

• Create communication mechanisms to shareadvocacy, technical, and promotional activitiesamong themselves and with the globalcommunity.

• Include micronutrient malnutrition issuesinto the agenda of regional expert groupconsultations such as associations of pedia-tricians, nutritionists, and reproductive healthspecialists.

• Prepare progress reports toward elimination ofmicronutrient malnutrition to the appropriatecouncils of regional organizations such asASEAN, SAARC, as well as APEC.

• Develop expert committees and othermechanisms to finance, undertake, peer review,and develop regional consensus of research anddevelopment in areas including:

1. Fortification and quality assurance at smallmills

2. Comparative bioavailability of iron compoundsin all flours with particular attention to attaflours

3. Interaction of micronutrients and theirimpact on both organoleptic characteristicsand bioavailability

4. Loss of vitamins during cooking andprocessing

5. Accelerate review, replication, and expansionof NIN/Hyderbad’s current research into thebioavailability of iron in atta flours

6. Review national and regional regulatory andtrade protocols with a view to smoothing outthe import and export of fortified foodproducts

��

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Regional Workshop on Regulation, Quality Assurance, Surveillance, and Trade of Fortified Food Products23–25 April 2002

Bangkok, Thailand

After 3 days of deliberation at the Regional Workshop on Regulation, Quality Assurance, Surveillance, and Trade,62

delegations representing the public and private sectors from Indonesia, Pakistan, People’s Republic of China,Thailand, and Viet Nam,63 along with other esteemed participants, agree on the following set of principles, strategies,and actions.

1. We recognize that:

• Micronutrient deficiencies are causing seriousdamage to social and economic developmentthrough poorer pregnancy outcomes, impairedcognition especially in young children, reducedwork capacity, and increased morbidity andmortality from infectious diseases;

• Improved nutrition is one of the key componentsto the reduction of poverty and the raising ofhuman resource quality contributing tosustained economic and social development;

• Efforts to improve nutrition are the jointresponsibility of the public and private sectors;

• Privatization of poverty reduction involves thepartnership of the public, private, and civicsectors, and the processed food industry’scontribution of fortified, affordable, andessential foods widely consumed by the poor isan example of such a partnership;

• Food fortification offers a significant low-costand sustainable approach to reducing theprevalence of these deficiencies;

• The contribution of food fortification to theMillennium Development Goals arises frompublic-private partnerships, especially the

reduction of hunger and absolute poverty andthe mortality of women and young children,while supporting the readiness of children tolearn to their full potential;

• While additional research and development isneeded in specific areas to better define optimalfortification approaches, it is also recognizedthat nutrition delayed is equivalent to nutritiondenied, and therefore countries of the regionshould move forward consistent with the currentevidence and scientific consensus.

2. We affirm that:

• It should be the public policy to make availableto our populations foods fortified with VitaminA, iron, iodine, folic acid, and other criticalmicronutrients at levels sufficient to impactpublic health.64

62 Sponsored by the Asian Development Bank, The Keystone Center,and the Institute of Nutrition at Mahidol University.

7. Signatories:

The participating delegations from Viet Nam,Thailand, People’s Republic of China, Pakistan, and

Indonesia endorsed this statement by consensusduring the workshop. Delegations represented abroad partnership of public and private sectorrepresentatives.

63 The delegation from India believes that appropriate ministries ofGovernment must review this statement to have the opportunityto assess its content, and suggest changes and amendments.Therefore, the Indian delegation reserved the right to become asignatory to this statement at a later date.

64 Vitamin A, iron, iodine, and folic acid are viewed as especiallyimportant at this time because of the magnitude and widespreadnature of their deficiencies, the evidence of significant public healthand socioeconomic problems that the deficiencies are causing, andthe availability of cost-effective interventions.

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• Each delegation’s country currently has, or willat the appropriate time propose, the legalauthority needed for adequate regulation of afortified food supply.

• Collaboration between government, privatesector, and civil society is the key to sustainedand effective implementation of food fortificationto reduce micronutrient deficiencies.

• Investment in food fortification offers asignificant opportunity over the medium to longterm for poverty alleviation and the accelerationof national social and economic development.

• Substantial additional investments will benecessary to implement quality foodfortification initiatives throughout the region,and these investments are justified due to thehigh human, social, and economic returns, suchas:

1. Substantially increased GDP for all countriesin the region;65

2. Increased economic competitiveness due toimproved nutritional status;

3. Substantial reduction in several chronic andsubchronic disease states;

4. Substantial additional effects in improvingthe overall food inspection systems and;

5. Promoting Asian competitiveness andpenetration of the global markets in foodtrade.

• While the precise range of vehicles selected forfortification will vary from country to country,the delegations propose that their countriesfortify flour with iron and folic acid, cooking oilwith vitamin A, salt with iodine, and that furtherresearch on the bioavailability in brown or attaflours and the fortification of sugar with VitaminA be researched.

• Investments and reforms to expand existingfood control and quality assurance systems willenable production and trade in fortified foodproducts, on a domestic and internationalbasis, fairly and transparently throughout theregion.

3. To achieve the above, the following nationalactions are necessary:

1. Legal and Regulatory Framework—TheGovernments of the nations whosedelegations were party to this ConsensusStatement should:

• Establish appropriate intergovernmental and/orinstitutional mechanisms to implement effectivepolicy in concert with partners in industry andcivil society.

• Communicate clearly the benefits of fortificationto the public, make appropriate legalrequirements and standards to be observed bythe food industry, and ensure consistency andcoordination among government agencies.

• Establish mechanisms enabling the privatesector and civil society to bring the full extentof their resources, expertise, and credibility tobear on the promotion of fortified food products.

• In the case of mandatory fortification programs,minimize taxes and duties on inputs tofortification as well as taxes on domesticallyproduced fortified food products.66 Participatingcountries agree to refer to the appropriateministries the proposed suspension of all tariffson fortificants and fortification technologies.The impact of these actions will be reviewed byan independent expert panel that will allow theregion to assess (1) the revenues foregone versusprofitability of the private sector, and (2) thesocial benefits to consumers, especially thepoor.67

2. Food Control and Quality AssuranceFramework—Appropriate governmentalauthorities from the nations whosedelegations were party to this ConsensusStatement should:

• Ensure adequate legal power to enforcefortification laws, with respect to the inspectionof plants, records, and products.

65 Additionally, some delegations also believe that increased emphasison nutritional development will have substantial direct positiveeffects on the development of industry in the region, therebyshifting public resources for other societal problems.

66 Delegations noted that consultations with national parliaments andin some cases international organizations may precedeconfirmation of the noted recommendation.

67 The Indian delegates respectfully believe that this issue may notbe considered for India due to revenue loss to the Government.

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• Initiate programs to empower inspectors andtechnicians. This should include a range ofincentives as well as penalties to enable personnelto enforce laws fairly and transparently. Acombination of improved recruitment, training,protocol development, oversight, and increasedpenalties should be implemented, with a viewtoward zero tolerance of corruption in theinspection force and in industry.

• Empower consumer protection organizations toidentify abuses and bring them to light in thepublic media, the judicial process, and thegovernment.

• While current sampling, analytical, andlaboratory capacities are limited, work to definethe human and financial resources necessary foreffective functioning and enforcement of qualityassurance systems.

• Work toward a flexible system of sampling andenforcement that provides incentives to theprivate sector for consistently performing toquality standards.

3. Nutrition Surveillance Framework—Theappropriate public health authorities in thenations whose delegations were party to thisConsensus Statement should work to:

• Implement nutrition surveillance systems forfour key micronutrients: iron, Vitamin A, iodine,and folic acid.

• Produce reliable and regionally equivalent dataon population micronutrient status through theuse of the following harmonized approaches:

� Common protocols and methods ofsurveillance at a regional level;

� Standardized representative cross-sectionalsurveys of sufficient sample size;

� Targeting surveys to parallel populationgroups as follows:

� iron–women of child-bearing age andadolescent girls;

� Vitamin A–preschool children andpossibly pregnant and lactatingwomen;

� iodine–6- to 12-year-old childrenand/or women of child-bearing age

� folic acid–women of child-bearingage

� Use of common biochemical indicators asfollows:

� iron–hemoglobin with the additionof other indicators;

� Vitamin A–serum retinol;� folic acid–serum or RBC folate;� and iodine–urinary iodine.

• Endeavor to use intermediate surveys to assessthe household and intrahousehold use offortified foods and to periodically reassessindividual biological indicators when coveragemeets accepted goals, particularly people intarget at-risk groups.

• Mobilize additional financial and human resourcesfor the upgrading of national laboratories as wellas training for lab technicians and field workers.

4. To achieve the above, the five countriessignatory to this Consensus Statementrecognize that networks building regionalcollaboration and capacity will provide anAsian framework for effectively workingtogether to:

1. Establish a Legal and Regulatory Framework:

• Create mechanisms, under the auspices ofexisting institutions (e.g., WHO, ASEAN, SAARC,APEC), to harmonize standards and ensure nounnecessary barriers to trade.

2. Establish a Regional Food Control andQuality Assurance Framework:

• Through collaboration of regional institutionssuch as ASEAN and SAARC with internationalaccreditation bodies such as ISO or NABL,establish accreditation of quality-controllaboratories in government, industry, andacademe. Through this process a harmonizedregional laboratory network for fortified foodsshould be in place by 2005.

• A Regional Center of Excellence and Expertise—new or existing—should initiate a training-of-trainers program for inspectors, analysts, andtechnicians. This trained corps will besufficiently empowered and resourced toconduct sequential in-country trainings of theirrespective national government, industry, andacademic institutions.

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• For the purposes of fair and transparent regionaltrade as well as domestic food control, when theabove-described laboratory accreditation andhuman resource development process isestablished, certification from an accreditedlaboratory will validate product and/ormicronutrient quality to the appropriateinspectors.

3. Nutrition Surveillance Framework:

• Mobilize investments that will lead to: acommon surveillance framework and commonguidelines; adequately staffed regional referencelaboratory and individual country laboratories;and the bulk purchasing of lab kits.

4. National and Regional Investment Planningand Resource Mobilization:

• The signatories to this consensus statementappreciate the importance of reaching regionalconsensus on appropriate food fortification

technologies, the applications of science tomeasure food composition, and the assuranceof food safety and domestic nutritionimprovements. Of equal importance, thesignatories recognize that Country InvestmentPlans prepared under the project will requirecareful review of existing policies and programsfor surveillance, quality assurance, andregulatory, customs and trade protocols. Bothstructural reforms and resource mobilizationare the next steps for each countryand for the region. The signatories requestassistance of the Asian Development Bank, TheKeystone Center, and other DevelopmentPartners to raise the level of resourcecommitments for Asia.

Signatories

Delegations representing the public and privatesectors of Pakistan, Viet Nam, People’s Republic ofChina, Indonesia, and Thailand.

�� Regional Workshop on Optimizing Child Growth and Development Through Improving

Complementary Feeding Including Use of Fortified Processed Complementary Foods25–27 June 2002

Singapore

After 3 days of deliberation at the regional workshop, delegations representing the public and private sectors fromIndonesia, India, Pakistan, People’s Republic of China, Thailand, and Viet Nam, along with other esteemedparticipants, agree on the following set of principles, strategies, and actions.

1. We recognize that:

• The numbers of underweight, stunted, andmicronutrient-deficient children in Asia are thehighest in the world, and the consequences ofthis condition are avoidable, premature death;mental and physical disabilities that lead to highschool dropouts, low employability, low wages,and low household investment in the quality ofthe next generation’s children; and losteconomic growth that will jeopardize theregion’s ability to compete in the globalmarketplace.

• Early Child Nutrition is an essential part ofHuman Resources Development Policy in allAsian countries.

• The optimal period of physical and mentaldevelopment is in pregnancy and the first 2 years,and the maximum prevalence of malnutritionmainly occurs from 6 to 24 months. This is alargely unexplored “window of opportunity” forsociety to influence the hopeful prospects of Asia’snewborns for lifelong learning and earning.

• The Millennium Development Goals, to whichall Asian nations and their Development

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Partners subscribe, set the world’s agendathrough 2015: virtual elimination of maternal,infant and young child mortality; universalprimary school enrollment and completion; andhalving of hunger and poverty in the developingworld.

• The role of government is critical in settingpolicies, programs, and standards that involveall stakeholders through participation andaccountability, and in utilizing public funds forthe lowest cost to government and highest benefitto optimal child growth and development.

• The guiding principles to optimizing child growthand development according to the WHO include:ensuring adequate supplementation for pregnantand lactating women as long as they are lactating,universalizing exclusive breastfeeding for the first6 months of life,68 followed by introduction ofcomplementary foods of both locally produced/home-prepared and industrially processed types,reinforced by good infant feeding practices andgood domestic hygiene.

• Processed Complementary Foods (CFs) representan important niche in the family’s options to meetthe extraordinarily high requirements formicronutrients in the first 2 years, and shouldbe developed with the adequate standards ofquality, safety, efficiency and cost-effectivenessso that they will be widely available andaffordable to lower socioeconomic groupswhere the worst nutrition problems areconcentrated. These foods are not a replacementfor breastfeeding or home-prepared CF.

• Convergence of nutrition in public healthstrategies should support optimal child growthand development, and the interventions includequality health, health education, and nutritionservices to mother and child, incorporation ofcomplementary feeding into health care delivery,promotion of healthy nutrition behaviorsthrough home visits for assessment care andreferral, social marketing of CFs of every typefor informed choice by parents and otherprimary caregivers, and compliance with theInternational Code for Marketing of Breast MilkSubstitutes.

• Delivery of the Comprehensive Maternal andChild Health and Nutrition Package is the mostcost-effective way to assure high levels ofeducational achievement and productivecontribution to society.

• There is scope and need for building apublic-private-civil society partnership to makemutually reinforcing contributions to optimizingchild growth and development.

• This depends crucially on the adoption andmaintenance of the accepted professionalstandards, i.e., avoidance of unethical practice,such as offering free samples of CFs to mothersof infants under 6 months.

2. We affirm that:

• CFs are an integral component of programs foroptimizing nutrition for young children.

• The addition of micronutrients to CFs accordingto the Codex Alimentarius along with themost current guidelines such as WHO-UNICEFrecommendations of 2002 is a feasible,affordable, and efficacious method to reduce theprevalence of key micronutrient deficiencies inchildren 6-24 months.

• Public policy should strive to enable productionto make available to children 6–24 monthsCF-fortified critical micronutrients at levelssufficient to impact public health.

• As an initial reference point, guidelines forfortification for processed CF should include atleast iodine, iron, vitamin A, and folic acid at 50–100% of RDA on the basis of daily consumption.Additional micronutrients at these levels couldbe considered by individual countries on a case-by-case basis.

• A collaboration of public, private, and civic sectorsis critical to creating an enabling environment toexpand production and distribution of affordableand appropriate fortified complementary foods.

• Substantial investments will be needed toprovide access to affordable and appropriatefortified CF, and these investments are justifieddue to the high human, social, and economicreturns.

68 The Indonesian delegation reserves its opinion regarding this clause.

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3. We therefore pledge to raise the priority ofComplementary Feeding and fortified CFs asan integral component of the child nutritionpackage through these activities:

• Develop a regulatory environment that supportsand promotes complementary feeding andexclusive breast feeding as equally importantcomponents of health and nutrition for childrenunder 2 years of age.

• Multisectoral advocacy to build support at alllevels of government for investment in earlychild nutrition within government and politicalleadership including local and municipalinstitutions.

• Develop national standards for appropriate andethical marketing of micronutrient-fortified CFbased on the current WHO-UNICEF Guidelines.

• Set national goals for increased production anddistribution of affordable fortified CF includingboth public and private sectors.

• Review public policy and behavioral barriers tothe expansion of production and marketingcapacity including small- and medium-scaleenterprises.

• Develop opportunities to integrate investmentin production, distribution, and promotion offortified CF into public health and developmentprograms with clear linkages to all key childnutrition strategies, including breastfeeding,child care, hygiene, and maternal health andnutrition.

• Include fortified complementary foods in allpublic distribution and food subsidy programs.

• Conduct technical research regarding CFfortification in five areas, several of which maygenerate concern in specific country situationsregarding the introduction of CFs into nationalsystems. These areas are nutritive value, safety,affordability, accessibility, and acceptability.

4. We recognize that the following coordinatedset of actions will be necessary at national,provincial, and local levels:

• A variety of technologies, products, andmarketing strategies including complete CFs,nutrient supplements, and dietary educationtargeted according to risk status, local foods, andcultures.

• Public incentives to enable the production sectorto expand affordable product offerings to at-riskchildren through the awarding of governmentseals of approval, generic public promotionalcampaigns, and special access to governmentchannels of distribution and communication aswell as targeted subsidies.

• Public policies regarding use of subsidies willbe reviewed to ensure that adequate resourcesare focused on the Comprehensive Package,including pregnant and lactating women andunder-twos. Where appropriate, resourcesshould be redirected to fortify food provisionsfor young children and their mothers, uses ofexternal food assistance should be directed tounder-twos and their mothers, and partial useof special public funds should be reserved forinnovative approaches to poverty reduction.69

• Public-private partnership should be extendedto industrial and trade policies, with carefulconsideration of whether the pattern and levelof tariffs and value-added taxes help or impedethe delivery of processed CFs to children in need.Adjustments to those fiscal and trade policiesmay be required if potential revenues foregoneare exceeded by long-term benefit streams tofamilies and nations.70

• Governments will ensure that the code ofconduct for the private sector will includemarketing guidelines for CFs, including labelingand advertisement that direct the consumer tofeed children older than 6 months only.

• Industry should be encouraged to introducemultitier pricing for products directed to less-affluent market segments without compromisingon product quality.

• Capacity building to upgrade medium- andsmall-scale enterprises to enable production offortified CF to simultaneously develop localbusiness and income generation opportunitiesalong with provision of CF.

• Comprehensive social communications andmarketing to raise consumer demand andawareness based on research to determine feedingpractices, motivations, and barriers to acceptanceand efficacy of fortified complementary foods.

69 The Indian delegation reserves its opinion regarding this statement.70 The Indian delegation reserves its opinion regarding this statement.

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• Training of health care providers to provideessential communication to support the use offortified CF in all contacts with pregnant womenand mothers of newborns as well as all childrenunder 24 months of age.

• Based on individual country situations, researchmay be needed before widespread imple-mentation of CF production and distributionsystems are put in place:

(i) nutritional quality and safety–developappropriate guidelines for smalland medium enterprises to enableadherence to Good ManufacturingPrinciples and Codex Alimentarius,and for food safety (protection againstmicrobiological, antinutritional, andtoxic factors).

(ii) market research on affordability of theCF products for lower socioeconomicsegments.

(iii) research linking assessment ofmicronutrient deficiencies in targetpopulations, and analysis of idealprotein, energy, and micronutrientbalance in CFs, including risk of under/over dosing.

(iv) consumer acceptability tests (sensory)based on updated methodologiesresearch linking appropriate and hygienicintroduction of locally prepared CFs andbalanced use of processed CFs.

(v) accessibility of processed CFs, particularlyin remote areas, related to localproduction using appropriate technology(with production manuals) anddistribution networks.

(vi) develop the feasibility of nutrient foodsupplements such as “sprinkles,” “spreads,”and “foodlets” of appropriate size andportion in locally prepared CFs whereprocessed foods are not accessible oraffordable, and testing consumerpreference, food preparation practice, andpotential risks.

(vii) research on product/process developmentand technology transfer with industry’scooperation.

(viii) behavioral research on pregnant andlactating mothers (in terms of feedingpatterns and energy expenditure ofinfants along with the nutritional quantityand quality of breast milk and sustainingtheir own nutritional needs duringprolonged lactation).

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Vitamin A deficiency (VAD) is a significant globalhealth problem. A variety of intervention strategieshave been devised to eliminate VAD and thereforeprevent the morbidity and mortality associated with it.Interventions to prevent VAD include the use of vitaminA supplements and the fortification of commonly eatenfoods. While vitamin A supplementation has played animportant role in preventing VAD, the distribution ofcapsules to target groups (usually preschool children andwomen after delivery) can be difficult to maintain,particularly at high coverage levels over long periods.The fortification of commonly consumed processedfoods is an alternative that has a number of advantagesover supplementation. The impact of vitamin A fortifiedfoods on VAD has been infrequently studied. In thismanuscript, we estimate the impact of vitamin Afortified food on the prevalence of VAD.

A review of the literature identified three studieson the effect of vitamin A fortified foods on theprevalence of VAD, based on laboratory assessmentin children. These studies used the prevalence of lowserum retinol levels to define VAD. The studies are asfollows.

• A study in Indonesia using fortifiedmonosodium glutamate (MSG; 810 microgramsof retinol equivalent (RE)/gram), a controlledfield trial, and serum retinol values in preschoolchildren. In the study area, 80% of the MSG wasfortified (Muhilal, et al., 1988).

• A study in Guatemala using fortified sugar (10micrograms RE/gram), a “before and after”assessment of 10 sentinel sites, and serumretinol values in preschool children (Arroyave,et al., 1981).

• An assessment of sugar fortification inGuatemala using fortified sugar, serum retinolvalues in adults, and national estimates using a“before and after” design (Dary, 1999).

The results of the studies are depicted in TableC1. The foods fortified were either MSG or sugar; theestimated daily intake of vitamin A from the fortifiedfoods varied from 117 to 345 micrograms; and thebaseline prevalence of VAD varied from 26% to 48%.The estimated daily intake of vitamin A from thefortified food takes into account the level offortification and estimates of the amount of the foodconsumed per day and the proportion of individualsconsuming the fortified product. While the foodvehicles and overall diets involved vary in thesestudies and assessments, for the purposes ofprojecting the impact of added vitamin A on theprevalence of VAD it is assumed that each microgramof actual vitamin A intake will have a consistent andcomparable impact regardless of the vehicle.

These studies provide three point estimates. Toenable an estimation of the impact of a fortified foodon prevalence, we assumed the following.

1. If the daily intake were half as high as reported,then the ratio from the pre- to post-prevalenceof VAD would be halved. For example, if an

71 Annexes C, D, and E were written by consultants specifically forthis report. They have not been published elsewhere.

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average daily vitamin A intake were 200micrograms and the ratio was .5 (i.e., a 50%reduction in the prevalence from baseline), thenwith an intake of 100 micrograms we wouldexpect a ratio of .75. For example, if a study wereperformed with 200 micrograms vitamin A perday and a baseline prevalence of 50%, if the ratiowere 0.5, then the post-fortification prevalenceestimate would be 25% (50% * .5); assuming halfthat intake would be 100 micrograms per day,with a baseline prevalence of 50%, the reductionwould equal ([37.5% {100% - 50%} / 2] +50%=.75). Similar relationships were assumed ifthe daily intake were one quarter, where theimpact on prevalence would be one quarter.

2. If the daily intake were doubled, then the declinein the prevalence of VAD would be doubled; ifthe dose were halved, the reduction would behalved.

These estimates are presented in Figure C1 andTable C2. These points were plotted and curves wereplotted to determine which type of curve fit the databest. The quadratic approach appeared to fit best. (Seethe “curve fit” explanation at the end of this annex.)The quadratic equation is as follows.

Post-fortification prevalence = pre-fortificationprevalence x(1.019752 – .003178(vit A µg/day)+ .00000282156958(vit A µg/day)2)

“Post-fortification prevalence” is the estimatedprevalence (%) of vitamin A deficiency afterfortification, “pre-fortification prevalence” is theestimated prevalence (%) of vitamin A deficiencyprior to the fortification program, and “vit A µg/day”is the estimated daily intake from consuming avitamin A fortified product. Use of the quadraticestimates compared with the actual reported post-fortification prevalence of vitamin A deficiencyshows that the estimation procedure seems to workwell. (See Table C3.)

TABLE C1. Results of studies estimating the impact of vitamin A fortification on the prevalence of vitamin A deficiency

Ratio:Average Intake of Daily Pre- Post- Pre-/Post-Vitamin A from Fortification Fortification Fortification

Food Fortified Food Prevalence Prevalence PrevalenceFortified (µg) of VAD of VAD of VAD

Field Trial MSG 117 48% 31% .645Sentinel Site Sugar 345 27% 9% .333NationalEstimates Sugar 135 26% 16% .615

FIGURE C1. Comparison of three studies on the impactof vitamin A fortication on the prevalence

fo VAD in preschool children(based on serum retino)

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TABLE C2. Actual daily intake of vitamin A and estimates if intake had been double, half, or onequarter of the ratio of pre- to post-fortification prevalence of VAD

Average Daily Intake Ratio: Pre-/Post-of Vitamin A (RE) Fortification Prevalence

(µgs) of VAD

Study 1 Double 234.00 .3300Actual 117.00 .66001/2 58.50 .83001/4 29.25 .9150



For study 1: Going from 117 to 234 micrograms: .66/2 = .33Going from 117 to 58.5 micrograms: [(1– .66) / 2] + .66 = .83

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There are relatively few studies available thatdescribe the impact of vitamin A fortified foods onthe prevalence of vitamin A deficiency. Three studieswere used to make this estimation. Linearity wasassumed between the daily intake of vitamin A andthe ratio from pre- to post-fortification vitamin Adeficiency prevalence. It is unknown whether thislinear assumption is approximately correct. Inaddition, these results are based on only three studiesand should be interpreted cautiously. We hope thatothers will perform randomized clinical trials toprovide additional estimates of the impact of vitaminA fortified foods.

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Thanks to the following individuals for theircomments and suggestions: Molly Cogswell, GlenMaberly, and Larry Grummer-Strawn.

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Arroyave, G., Mejia, L.A., and Aguilar, J.R. The effectof vitamin A fortification of sugar on the serumvitamin A levels of preschool Guatemalanchildren: A longitudinal evaluation. Am J ClinNutr 34 (1981): 41–9.

Table C3: Comparison of the actual vs. estimated impact of vitamin A fortified foods on the post-fortificationprevalence of vitamin A using the quadratic approach

EstimatedAverage Intake of Daily Pre- Post- Post-Vitamin A from Fortification Fortification Fortification

Food Fortified Food Prevalence Prevalence PrevalenceFortified (µg) of VAC of VAD of VAD

Field Trial MSG 117 48% 31% 33.0%Sentinel Site Sugar 345 27% 9% 7.0%National Estimates Sugar 135 26% 16% 16.7%

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Muhilal, Permiesih, D., Idjradinata, Y.R., Muherdiyantiningsih,and Karyadi D. Vitamin A-fortified monosodiumglutamate and health, growth, and survival ofchildren: A controlled field trial. Am J Clin Nutr48 (1988): 1271–6.

Dary, O. Central America on the Verge of Ending VAD.A paper delivered to a conference sponsored bythe Micronutrient Initiative and the InternationalSugar Organization, entitled “Sugar Fortificationto End VAD in Southern and Eastern Africa,” June1999.

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OUTPUT FROM SPSSMODEL: MOD_5.

Dependent variable.. RATIO Method.. LINEARListwise Deletion of Missing DataMultiple R .87964R Square .77376Adjusted R Square .75113Standard Error .13220

Analysis of Variance:DF Sum of Squares Mean Square

Regression 1 .59771976 .59771976Residuals 10 .17476965 .01747697F = 34.20043 Signif F = .0002

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Variable B SE B Beta T Sig TVITA -.001247 .000213 -.879635

-5.848 .0002(Constant) .848117 .055134 15.383 .0000_Dependent variable.. RATIO Method.. QUADRATIListwise Deletion of Missing DataMultiple R .97517R Square .95096Adjusted R Square .94006Standard Error .06488


Regression 2 .73460718 .36730359Residuals 9 .03788224 .00420914F = 87.26339 Signif F = .0000

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Variable B SE B Beta T Sig TVITA -.003178 .000354 -2.241152

-8.968 .0000VITA**2 2.82156958E-06

4.9477E-07 1.425107 5.703 .0003(Constant) 1.019752 .040471 25.197 .0000Dependent variable.. RATIO Method.. EXPONENTListwise Deletion of Missing DataMultiple R .94322R Square .88966Adjusted R Square .87863Standard Error .19285


Regression 1 2.9986516 2.9986516Residuals 10 .3719104 .0371910F = 80.62833 Signif F = .0000

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Variable B SE B Beta T Sig TVITA -.002794 .000311 -.943217

-8.979 .0000(Constant) .921241 .074093 12.434 .0000

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To encourage countries to consider the fortification offlour with iron, it is useful to estimate the potentialimpact of flour fortification on the prevalence ofanemia and iron deficiency. Many factors may affectthe impact of iron-fortified flour on the prevalence ofanemia and iron deficiency, including the following:

• average daily consumption of flour• type of flour (e.g., wheat, corn)• type of iron compound used• incorporation of other micronutrients in the

fortificant mix• baseline levels of anemia and iron deficiency• extraction rate (i.e., amount of bran removed

from the wheat)• diet (certain things may enhance or inhibit iron

absorption)

The fortification of wheat flour with iron andother nutrients began in the United States in the1940s. A number of other countries began similarfortification programs in the 1950s and later. While

anecdotal information suggests that some of thesefortification programs were associated with declinesin anemia and/or iron deficiency, there has generallybeen no adequate baseline information to accuratelyestimate the impact of fortification or to assesswhether declines in the prevalence might be due toother causes.

Few population-based studies have estimatedthe impact of iron-fortified foods on the prevalenceof anemia or iron deficiency. Probably one of the best-studied situations was in Venezuela (Scrimshaw,2001). In this study, a baseline survey was performedin 1992 and a follow-up survey in 1994. The prevalenceof anemia in children from low socioeconomic stratawas estimated to be 19% at baseline and declined to9% in 1994. Likewise, iron deficiency dropped from37% in 1992 to 16% in 1994. However, surveys in 1997,1998, and 1999 found the prevalence of anemia to be15%, 19%, and 17%, respectively; for iron deficiency,the prevalence estimates in these years were 14%, 11%,and 16%, respectively. (See Table D1.)

TABLE D1. Results from five surveys, showing the prevalence of anemia and iron deficiencyin children from the low socioeconomic strata of the Venezuelan population

Survey Population Anemia Population Iron DeficiencyYear (N) (%) (N) (%)

1992 282 51 19.0 282 105 36.61994 317 30 9.3 317 50 15.81997 590 86 14.6 571 80 14.01998 478 89 18.6 466 52 11.21999 545 93 17.1 537 83 15.5

From Scrimshaw et al., 2001.

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Many factors can cause anemia, iron deficiencybeing only one of them. So, in general, it would seemthat iron-fortified foods have the potential to reducethe prevalence of anemia; however, the level of impactwill depend upon the proportion of anemia in thepopulation that is attributable to iron deficiency. Also,the impact of iron-fortified food products would beexpected to be greater if measuring iron deficiencyrather than anemia (i.e., hemoglobin). Unfortunately,very few studies have been done on the impact of ironsupplements or iron-fortified foods on indicators ofiron deficiency.

In our early attempts to estimate the impact, weused a manuscript by Leif Hallberg (1982). Hallbergdepicted an estimated relationship between increasediron absorption and its impact on anemia (Figure D1).The population from which he drew his conclusionswas made up of Swedish women. For the curvilinearrelationship, the upper bound of the prevalence ofanemia was 30%. In attempting to apply thiscurvilinear relationship to populations with higherprevalences (such as 50% or 60%), the model did notappear to predict very well.

We therefore decided to base estimates of theimpact of iron fortification on the results of studiesof iron supplementation, to estimate a relationshipfor lower daily intakes of iron.

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A review of iron supplement studies was used for thisestimation process (Beaton and McCabe, 1999; seeFigure D2). The data were limited to 19 studies of dailysupplementation to compare the baseline prevalenceof anemia with the final prevalence. The details of thestudies are available in the appendices of Beaton andMcCabe’s document. In general, the age groups of thestudy groups varied: they included pregnant womenor school-age children/adolescents (usually femaleonly). The majority were based on 60mg iron/day andmost included folate. A few studies provided otherinterventions simultaneously, such as deworming.The duration of the iron supplementation and thelevel of supervision of the supplement intake varied.

Because the amount of iron received daily fromiron-fortified foods is generally less than the 60mgin a supplement, we assumed that the impact of loweramounts of iron on the prevalence of anemia waslinear. For example, if a population had an initialprevalence of anemia of 50%, and it was estimatedthat a daily iron supplement of 60mg reduced theprevalence to 25%, then had only 30mg of iron beenprovided per day, the prevalence would be reduced to37.5%.

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A number of features can be seen from Figure D2(which is Figure 7.1 from Beaton and McCabe).First, there was variability between studies on theeffectiveness of iron supp-lementation to reducethe prevalence of anemia. This level of variabilitywas greatest in the “severe” baseline prevalenceof anemia. The figure presents the regression linecombining all studies. The intercept and slope ofthis graph were estimated as follows:

Final anemia prevalence = 1 + baseline anemiaprevalence x (.467)

An example of using this formula is asfollows. Assuming a population received 60 mg/day and the baseline prevalence was 50%, the finalprevalence would be estimated as 24.4%:

24.4% = 1 + 50% x (.467)

FIGURE D1. Figure from publication by Hallberg, 1982

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While most studies in Beaton and McCabe’sanalysis used 60mg iron supplements, there were afew that used slightly less or more iron. For ourpurposes, we assumed that all used 60mg iron.

To estimate the impact of less than 60mg iron/day, we used the following equation:

Predicted prevalence = baseline - ((baseline -(1 + (baseline x 0.467))) x (mg / 60))

“Predicted prevalence” is the predicted finalanemia prevalence in percent; “baseline” is thebaseline anemia prevalence in percent; and “mg” is

the estimated daily intake of iron from the fortifiedproduct. For example, for a population with a baselineprevalence of anemia of 50% and an estimated dailyintake of iron from a fortified product of 30mg:

Predicted prevalence = 50% - ((50% - (1 + (50%x 0.467))) x (30 / 60))

This would estimate a final anemia prevalenceof 37.2%. Table D2 presents the predicted final anemiaprevalence for a variety of baseline prevalences andiron intake.

Figure D3 shows this data in graphical form.

FIGURE D2. Figure from publication by Beaton and McCabe, 1999

TABLE D2. Estimates of predicted final anemia prevalence for various baseline anemiaprevalence estimates and iron intake

Baseline Prevalence Iron intake (mg/day)of Anemia (%) 1 5 10 20 30 60

60 59.5 57.4 54.8 49.7 44.5 29.050 49.6 47.9 45.7 41.5 37.2 24.440 39.7 38.3 36.6 33.2 29.8 19.730 29.8 28.8 27.5 25.0 22.5 15.020 19.8 19.2 18.5 16.8 15.2 10.3

Values presented in the table are the predicted final anemia prevalence estimates (%)

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Ideally, estimates of the impact of iron-fortified foodsshould be based on randomized clinical trials, and theoutcome should be the reduction of iron deficiency.Unfortunately, only sparse data are available, andtherefore iron supplement studies were used in thisdocument. It is possible that there is no linearrelationship between daily iron dose and a reductionin the prevalence of anemia. The studies selected variedon a number of factors, such as age, duration ofintervention, and perhaps quality of data collection/supervision. Therefore, these results should beinterpreted cautiously. It is hoped that others willperform more definitive clinical trials to improve theestimates of the impact of iron-fortified foods onreducing the prevalence of iron deficiency and anemia.

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On the first page of this document a number of factorswere listed that likely impact the effectiveness of ironfortification. Some other issues that might affect thisdocument’s estimation procedure are described below.

Reasons why the approach taken in this document mightunderestimate the effect of iron fortification:

FIGURE D3. Estimates of the predicted final prevalenceof anemia for vaious baseline prevalences; from top tobottom 60% baseline prevalence, 50%, 40%, 30% and

20%, for various daily intakes of iron

• The curve might not be linear. There are datato suggest that around 50 mg of iron or moreas a supplement might not affect, to any greatextent, the final prevalence of anemia. Thissuggests that the “true” response curve may fallbelow those depicted in Figure D3, at least forthe higher levels of daily iron intake.

• It has been suggested that small amounts ofiron in fortified foods consumed daily over along period of time may have a more beneficialeffect than the curves presented in Figure D3.This might involve issues of pharmokineticsand cumulative dose.

• Using anemia as the endpoint likelyunderstates the effect of iron fortification oniron deficiency.

Reasons why the approach taken in this document mightoverestimate the effect of iron fortification:

• Fortified foods are consumed with a meal thatmay include inhibitors that might reduce theimpact of the iron.

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Thanks to the following individuals for their commentsand suggestions: Molly Cogswell, Glen Maberly, RichardHurrell, and Larry Grummer-Strawn.

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Beaton, G.H., and McCabe, G.P. Efficacy of IntermittentIron Supplementation in the Control of IronDeficiency Anaemia in Developing Countries.Ottawa: Micronutrient Initiative, 1999.

Hallberg, L. Iron nutrition and food iron fortification.Seminars in Hematology 19, no.1 (1982): 31-41.

Scrimshaw, N.S., Guzman, M.A., Layrisse, M., Mende-Castellano, H., Chavez, J.F., and Garcia-Casal,M.N. Success of the Micronutrient Fortification ofCereal Flours in Venezuela: Draft Report. Ottawa:Micronutrient Initiative, April 30, 2001.

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The PROFILES model developed by the Academy forEducation Development in collaboration with USAID(Ross and Aguayo, 2001) has been adapted andmodified for the purpose of assessing the economicbenefits and costs of fortification in the CountryInvestment Plans (CIPs). This short annex discussesthe underlying principles and assumptions used. Theannex has three main sections. The first presents thecomposition of the PROFILES model—i.e., theworksheets and calculations used in the benefit-costassessments. The second section deals with themeasurement of the stream of costs and benefitsassociated with the fortification projects in the CIPs.The last section discusses the different benefit-costindicators used.

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Adapting and using the PROFILES model to come upwith a sound assessment of the various fortificationprojects required a coordinated effort between theCountry Teams—which generated most of the datainputs—and the members of the consulting teamtasked with developing the model. Much preparatorywork was needed to gather, verify, and complete allthe necessary information. Equally demanding wereefforts to validate the soundness of the assumptionsused by the model. As a rule, we used the moreconservative assumptions. (Note this later, forexample, in the parameters used for productivitylosses for blue-collar and heavy manual labor.)

The process is illustrated in Figure E1. The firststeps involved gathering the data needed to drive the

model. This was done primarily by the Country Teamsand covered three major areas: (1) the prevalence ofmicronutrient deficiency, (2) the demographics of thetarget populations, and (3) the costs and economicparameters. The data served as introduced into thecalculations for estimating the benefits fromfortification (e.g. lives saved, productivity gains, andhealth care costs saved), as well as the costs. The costdata were mainly derived from industry studies thatwere undertaken to estimate private production costs,food control costs, nutrition monitoring costs, andsocial marketing costs, among others.

In PROFILES, the results of the variousactivities, from Country Teams’ data preparation toindustry studies, were introduced into the variousworksheets. The worksheets included in PROFILESare listed in Table E1.

Four worksheets provide the major inputs forthe model. These include 1Prev, malnutrition

FIGURE E1. Process involved in completing PROFILES

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TABLE E1. PROFILES Worksheets

prevalence, 2Dem, the demographic variables, and3Rel, other related inputs, as well as 11 FortifCosts, thecost input worksheet. For the 3Rel worksheet, threetypes of information were gathered:

1. mortality variables• estimates of infant mortality and under 5

mortality rates, maternal mortality ratio,and relative risk of mortality for those withmicronutrient deficiency

2. economic variables• labor force, wage, and national income

accounts data• used in estimating productivity impacts of

the fortification project3. morbidity variables

• costs of clinic attendance and hospitaladmissions, and relative risks of morbidityfor those with micronutrient deficiency

• used to estimate the impact of thefortification project on health care costs

The remaining worksheets are modelcalculations. Filling in the information in the inputworksheets automatically yields the benefit-costassessment indicators. The next sections attempt toexplain how the model does this.

For some country studies, there may be a needto add further refinements and modifications to theworksheets, depending on the type of food vehiclesand unique data requirements. It is also interestingto note the variance in estimates for a number of theseinput variables across countries, particularly thepopulation, average earnings, health care costs, andother morbidity variables in 3Rel, which could leadto significant differences in the resulting estimatesof benefits and costs across these countries.

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For costs, the estimation procedure is straightforwardbut still rather laborious. The cost estimates shouldcover whatever costs are incurred in carrying out theproject, including (1) those incurred by privateproducers (the costs of micronutrients, energy,capital, labor, and other costs over the lifetime of theproject) and (2) those incurred by government(including social marketing, food control, andnutrition monitoring). These are presented in theworksheet 11 FortifCosts of the PROFILES spreadsheet.

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Estimating the benefits from fortification is muchmore complicated, in the sense that benefits are moredifficult to discern and quantify. Economic benefitsfrom fortification arise from averting the economiccosts of the micronutrient deficiencies. In general, thecosts of micronutrient deficiencies are measured interms of (1) higher mortality, (2) higher morbidity,and (3) lower productivity. Accordingly, the benefitsfrom fortification are derived from a reduction in theprevalence of micronutrient deficiency, which resultsin:

• a reduction in mortality (lives saved),• reduced morbidity (translated to health care cost

savings), and• increased productivity.

In particular, vitamin A, iron, and folic aciddeficiencies are found to have profound impacts onthese three outcomes.

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For vitamin A deficiency (VAD), the most seriouseffects are for children under 5 years old. In particular,the relative risk of mortality and morbidity has beenfound to be considerably higher for this age groupwith VAD. (See Ross and Aguayo (2000) for a detaileddiscussion of the effect of VAD on mortality andmorbidity.)

For this project, we used the relative riskestimate of mortality for children under 5 years oldwith VAD from the original PROFILES model ofHorton and Ross, which is approximately 1.75. Thismeans that the risk of mortality for children with VADis 1.75 times the risk of mortality for children withoutVAD. This implies that vitamin A fortification thatleads to a reduction in VAD prevalence would resultin lives saved.

While the number of lives saved is enoughindication of the benefits of fortification, the modelattempts to quantify such benefits to allow theirinclusion in benefit-cost calculations. Toward thatend, the economic benefits from lives saved aremeasured by what those individuals are expected toproduce and contribute to the gross national

product.72 This is estimated as the present value ofaverage earnings during gainful employment,assumed, on average, to be age 16-50. Gainfulemployment could last beyond age 65. However, notall individuals will survive up to retirement age. Theshortened period of gainful employment is used asan approximation of the average number of years ofgainful employment. The benefit estimate is alsoadjusted for unemployment. The estimation processfor lives saved and productivity gains is found in4VADmort of the PROFILES spreadsheet.

In terms of morbidity, children under 5 yearsold are more likely to seek treatment at clinics andhospitals. Again we use the estimates from the Hortonand Ross study, which are 1.19 and 1.84, respectively,for the relative risk of clinic attendance and therelative risk of hospital admission, both for childrenunder the age of 5. Thus, VAD for children under 5years old results in:

• Increased clinic attendance. Thus, reducedmorbidity because of fortification would meanbenefits arising from reduced clinic attendanceand consequently health care cost savings (i.e.,a reduction in health care costs).

• Increased hospital admission. Similarly, reducedmorbidity because of fortification would alsomean reduced hospital admissions and thussavings in the costs of hospitalization.

These estimates are included in worksheet 5VADmorbof the PROFILES spreadsheet. Figure E2 illustrates theprocess flow for estimating the benefits from VADreduction.

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For iron deficiency, the most serious impacts are onmortality and productivity losses. Again, refer toHorton and Ross (2001) and Ross and Aguayo (2000)for a detailed discussion of the effects of irondeficiency and anemia on mortality and productivity.Pregnant women carry the greatest mortality risk.Studies find that approximately 22.6% of maternal

72 There is some discussion about whether to net out the increasedconsumption with survival. Increased consumption meansincreased demand, which translates to a contribution to GNP. Theapproach here is not to net out consumption and consider the wholefuture earnings as an addition to GNP.

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deaths are due to IDA. A reduction in IDAprevalence from fortification is thereforeexpected to reduce maternal deaths. This isestimated in worksheet 6 IDAmort of thePROFILES spreadsheet.

Productivity losses come from two sources:

1. lifetime (irreversible) productivity lossesfrom cognitive losses arising from havingIDA from 6 months to 2 years of age, and

2. reversible productivity losses for blue-collar and heavy manual labor.

Productivity losses due to anemia for lessphysically demanding labor are assumed to beminimal and are thus not measured.

For lifetime productivity losses IDA isfound to result in a 0.5 standard deviation dropin cognitive scores, which Horton and Ross(2001) estimate to result in irreversibleproductivity losses of about 4%. The lifetimeproductivity loss from cognitive losses due to IDA isthus taken to be 4% of future earnings, which isestimated as the present value of average wagesduring gainful employment, again assumed, onaverage, to be age 16–50.

In the case of reversible productivity losses forblue-collar labor, Horton and Ross estimatedadditional loss due to adult anemia among blue-collarworkers to be about 1%. For heavy manual labor, theestimate of additional loss due to adult anemia amongheavy manual laborers is approximately 12%.

The productivity losses are estimated inworksheet 7 IDA Pdty of the PROFILES spreadsheet.

The process flow for generating these estimates ispresented in Figure E3.

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We used a different approach to measure the benefitsof folic acid fortification, given the lack of robust dataon folic acid deficiency (FAD) prevalence and therelative risks involved for those with FAD. The studyby Tice et al. (2001) looked at the impact of grainsfortification on coronary heart disease (CHD). Themodel makes use of the results of this study asindicated below.

The benefits arise from two main sources:

• reduction in births with Neural Tube Defects(NTD) and

• reduction in the CHD event rate.

Births with NTD are estimated to be reduced byapproximately 30% with grain fortification of 140 µgof folic acid per gram of grain.73 Honein et al. (2001)estimates the prevalence of births with NTD to havedeclined by about 19% in the United States since folic

FIGURE E2. Benefits from a reduction inVAD prevalence

FIGURE E3. Benefits from a reduction inIDA prevalence

73 Horton, S. and J. Ross, “The economics of iron deficiency,” FoodPolicy 28 (2003): 51–75.

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acid fortification was made mandatory in 1998—from 37.8 per 100,000 live births before fortificationto 30.5 per 100,000 live births conceived afterfortification. In Canada, Ray et al. (2002) estimates alarger decline of about 48% in the early- to mid-trimester prevalence of NTDs with folic acidfortification, from 113 to 58 per 100,000 pregnancies.We chose to use a lower rounded average of a 30%reduction. This implies:

• children’s lives saved and• economic benefits gained (estimated, as in the

case of VAD in children, as the present value offuture earnings).

The estimation is done in worksheet 8 FADmort.In the case of CHD:

• The US Food and Drug Administration, sinceJanuary 1998, has required the fortification ofenriched grain products with 140 µg of folic acidper 100 grams, a level found to decrease thehomocysteine level, which has been identifiedas a risk factor for CHD.

• Tice et al. (2001) predicted that folic acid grainfortification would reduce CHD events by 8% inwomen and 13% in men, with comparablereductions in CHD mortality.

• As such, the benefits arise from a reduction inhealth care costs due to the reduction in numberof CHD cases, and thus hospital admission andclinic attendance.

This estimation is done in worksheet 9 FADmorb.

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Finally, the results from the benefit-cost assessmentsare summarized and put together in the worksheetson BCsum and IRR, which provide benefit-cost ratios,net present values, and internal rate of return for theproject. These measures ultimately indicate theoverall desirability (or nondesirability) of eachproject. These concepts are explained further in thefollowing section.

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A number of indicators could be used to assess thedesirability of a project. Among the more widely usedare:

1. benefit-cost ratio (B/C),2. net present value (NPV), and3. internal rate of return (IRR).

These indicators are calculated by the PROFILESmodel. They are basically the same, in that theyattempt to weigh the benefits against the costs of aproject. All three need to estimate the stream ofbenefits and costs over the lifetime of a project.

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The benefit-cost ratio directly compares benefitsagainst costs. Clearly, if B/C > 1, then benefitsoutweigh costs and the project is desirable. If B/C <1, the benefits from the project would only be afraction (less than 1) of the cost of the project. Thecosts would then outweigh the benefits, and theproject would thus be undesirable.

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For net present value, the stream of benefits and costsare discounted to bring them to present values, usinga discount rate that represents how much future costsand benefits are valued compared with the present.This is important because a unit value now (e.g., adollar now) is valued differently than a dollar in thefuture (e.g., next year). Specifically, a dollar now ismore valuable than a dollar next year. The discountrate represents how much more the dollar is worthnow compared with the future. What this means isthat we cannot simply and directly add benefits (orsubtract costs) occurring at different time periods.We need to discount them first to their present valueto make them comparable and additive.

Thus, if B represents the present value of thestream of benefits of a project (i.e., the sum of thestream of properly discounted benefits), and similarly,C represents the present value of the stream of costsof the project, then the NPV is simply B – C. Hence,

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the NPV is basically accomplishing the same end asthe B/C ratio—weighing benefits against costs.

In the NPV criterion, a project is desirable if B –C > 0. That is, the project is desirable when benefitsare greater than costs.

This is exactly the same as the B/C ratio, if the Band C in the B/C ratio are properly discounted beforebeing summed up. The B/C ratio could be estimatedyearly, but a one-year estimate would not accuratelyindicate the desirability of a project on the whole (overits lifetime). The B/C ratio estimated for a normal,representative year could, of course, be a goodapproximate.

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The internal rate of return measures the rate ofdiscount that makes a project break even (NPV = 0).What does such a measure indicate? Using a discountrate that is anything less than the IRR in evaluating aproject would make the NPV of the project positive.In essence, finding that rate of discount where theNPV becomes zero is an accounting measure of howmuch returns could be attributed to capital. Whetherthis return is good enough or not is the next thing todetermine.

If the IRR is greater than the social rate ofdiscount, r, (usually measured by the opportunity costof capital), then the capital invested in the project isearning more than its opportunity cost. In addition,if the IRR is greater than r, then the NPV of the projectis positive (>0). As such, benefits would outweighcosts. Hence, the IRR criterion, IRR > r, is the same

as the NPV criterion, NPV > 0, and B/C criterion, B/C> 1, in assessing the desirability of a project.

In the PROFILES model, the projects use a 10-year time frame. This would tend to underestimatethe benefit-cost ratio and the IRR since the capitalinvestment is expected to last longer. This follows ourgeneral guideline of being biased towardsconservative assumptions.

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Honein, M.A., Paulozzi, L.J., Mathews, T.J., Erickson,J.D., and Wong, L.Y. Impact of folic acidfortification of the US food supply on theoccurrence of neural tube defects. Journal ofAmerican Medical Association. 2001; 286(18):2236.

Horton, S. and Ross, J. The economics of irondeficiency. Food Policy 28 (2003): 51–75.

Ray, J.G., Meier, C., Vermeulen, M.J., Boss, S., Wyatt,P.R., and Cole, D.E. Association of neural tubedefects and folic acid food fortification in Canada.Lancet 360(2002): 2047–8.

Ross, J. and Aguayo, V. PROFILES Guidelines:Calculating the Effects of Malnutrition onEconomic Productivity, Health, and Survival.Washington, DC: The Academy for EducationalDevelopment, 2000.

Tice, J. et al. Cost-effectiveness of Vitamin Therapy toLower Plasma Homocysteine Levels for thePrevention of Coronary Heart Disease: Effect ofGrain Fortification and Beyond. Journal ofAmerican Medical Association. 2001; 286(8):936-43.

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The profiles on the following pages offer snapshots of ten of the fortification projects proposed in the CIPs.Each profile includes the rationale for, background, and current status of the project. These profiles mayprove useful to analysts in making easy comparisons or in summarizing projects for colleagues.

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atta flour – unrefined brown flourchakki mills – small-scale stone mills serving local communitiescomplementary foods – semisolid foods fed to infants and very young children as a

complement to breast-feeding or commercial or homemade formula,as a means of better meeting the nutritional requirements of thechild

ferritin – an iron-containing protein complex that functions as the primaryform of iron storage in the body, used as an indicator of irondeficiency

HAACP (Hazard Analysis and Critical Control Point) – a food-safety programused by the US Food and Drug Administration that focuses onpreventing hazards that could cause food-borne illnesses by applyingscience-based controls, from raw material through to finishedproducts

hemoglobin – the iron-containing respiratory pigment in red blood cells, used as abiochemical indicator of anemia

homocysteine – an amino acid (a building block of protein) that is produced in thehuman body. At high levels, homocysteine may irritate blood vessels,leading to blockages in the arteries. Most people with highhomocysteine levels do not have enough folic acid or vitamin B

6 or

B12

in their dietsNaFeEDTA (sodium iron ethylenediaminetetraacetic acid) – a highly absorbable

iron compound that can be used as a fortificant in brown flours, soysauce, and fish sauce

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µg microgramsADB Asian Development BankASEAN Association of Southeast Asian

NationsCAPM Chinese Academy of Preventive

MedicineCHD coronary heart diseaseCIP Country Investment PlanDULOG the national food distribution

agency in IndonesiaFAD folic acid deficiencyFAO Food and Agriculture

Organization of the UnitedNations

GAIN Global Alliance to ImproveNutrition

GMP good manufacturing practicesGRET Group D’Exchange et de

Recherche TechnologiqueHACCP hazard analysis and critical

control pointIDA iron deficiency anemiaIRR internal rate of returnIU international unitJFPR Japan Fund for Poverty

Reduction

mg milligramsMDG Millennium Development GoalMOH Ministry of HealthMOPH Ministry of Public HealthMT metric tonsNaFeEDTA sodium iron

ethylenediaminetetraacetic acidNGO nongovernment organizationNIN National Institute of NutritionNPV net present valueNTD neural tube defectppm parts per millionPRC People’s Republic of ChinaRDA recommended daily allowanceRDI recommended daily intakeSAARC South Asian Association for

Regional CooperationSSOP sanitation standard operating

proceduresUSAID US Agency for International

DevelopmentUSDA US Department of AgricultureVAD vitamin A deficiencyVWU Viet Nam Women’s UnionWHO World Health Organization

Documents

˘ˇ ˆ · Food fortification is one of several strategies that can lift the tremendous human and economic burden of micronutrient deficiencies and malnutrition in Asia. And it is