Sri Lankans’ average spend on food

Wednesday, 13 May 2020 00:00 - - {{hitsCtrl.values.hits}}

This morning I read most of the articles appeared in today’s Guest Columns of the DFT including Ajith de Alwis’s captioned article. While I enjoyed reading the diverse set of articles, I am puzzled by the following section in Ajith’s article.

I quote: “Today on average each one of us spends 52% of our income on food. This is a significant drain and reduces the disposable income of any individual. Consider the USA, the value is about 13% and for EU the value may be on average 17%. As I have stated in these columns earlier, this is an imperative to address. The overall benefits of reducing this value through meaningful action would have enormous benefits to society.” [End of quote]

May be I am ignorant of what he really means or he is not aware of the Engel’s Law in Economic theory. This German statistician pointed out in 1857 that the percentage of income spent on food decreases as income rises. Thus in low income countries people spend a higher proportion of their income on food relative to those in high income countries because what is true for individuals holds true on average for countries as a whole too. This explains simply why the proportion spent on food in the US is much lower when compared with that of Sri Lanka.

And more disturbingly he says: “This is a significant drain and reduces the disposable income of any individual.” Sure it reduces the disposable income. But is it possible for anyone to argue that it is a drain given that it is spent on food unless that amount is spent on food that is unhealthy or simply unnecessary? Should they spend a lower proportion then (out of their low income)?

The worst part of the whole statement is this: “As I have stated in these columns earlier this is an imperative to address.” (The answer of course lies in increasing incomes.)

We know this share will definitely come down when people’s income rises.

I kindly request you to publish this mail in your paper as appropriate to correct a grave mistake in the published article.

Nimal Fernando