SERA Policy Brief: Food Basket Costs in Tanzania

Food is the largest expenditure item for the typical Tanzanian household and accounts for significantly more than half of total expenditures for the poorest. Consequently, food prices and food costs are very important to consumers and to the Government of the United Republic of Tanzania (GOT) as it addresses food security concerns. Since the typical diet and food prices vary greatly across Tanzania, it is important to consider the cost of the entire food basket in each region in order to fully understand the implications for food security. The SERA Policy Project and the Economic Research Service of the U.S. Department of Agriculture worked closely with the Department of Food Security and the Department of Policy and Planning of the Ministry of Agriculture, Food Security, and Cooperatives to develop and pilot a comprehensive and systematic approach to measuring food costs. This approach is referred to as the Food Basket Methodology (FBM), and it is used to measure the monthly costs of the typical food basket.

This Policy Brief explains the Food Basket Methodology and provides estimates of the monthly food basket costs from January 2011 to July 2015 for 21 regions in Tanzania and considers the implications for food security. Food basket costs can be used to provide early warning of regional food cost increases, but they can also provide valuable insights into broader food security issues by showing how prices of individual food items affect overall food basket costs and how food prices are related within a region and between regions. This information can be used to assess the impact of a particular food price increase on food basket costs. For example, maize is the main food staple in Tanzania accounting for about 40% of total calories in the typical diet; but it accounts for only 14.5% of the cost of the typical food basket and less than 8% of the food basket cost in Dar es Salaam. Consequently, an increase in maize prices has less of an impact on food costs and food security than implied by its calorie share or market visibility. Such detailed knowledge of food basket costs can contribute to better understanding of food security in Tanzania and lead to better policy decisions and better targeting of food assistance by identifying vulnerable regions and their consumption patterns.

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