3 International solutions fortification cost transfers

Flour fortification is mandatory in 85 countries globally. The mix of micronutrients is dependent on individual government policy reflecting national priorities for the population. For example, in Australia mandatory fortification of flour used for making bread is in place for thiamin (vitamin B1 and folic acid, while in the UK white flour fortification is mandatory for iron, calcium, thiamin and niacin (vitamin B3) and, government consultations are ongoing for the inclusion of folic acid. While some countries not intervening in the wheat and flour market would allow the fortification cost to be absorbed through the value chain, e.g. UK and Australia, there are examples where country government that do intervene in the wheat and flour market via distribution, subsidy and/or fixed prices have successfully addressed fortification financing. Examples include:5

• In Morocco and Yemen, the fixed flour price at the retail level was adjusted upwards to account for the onetime increase from fortification. • In Egypt where the Ministry of Supply imports and distributes ~80% of the national wheat supply at highly subsidized prices, the cost of fortification is deducted from the wheat price charged to millers. • In Oman, Bahrain and Iran the cost of premix is covered via a line item in the Ministry of Health Budget (in the same way as importation and distribution of essential drugs). • In Jordan, revenue from a government service fee/tax charged on the import of wheat is specifically targeted for the fortification cost of the wheat (Jordan imports nearly all its flour). • In Uzbekistan, a sales tax on the sale of fortified flour is recycled back to industry via the miller’s association bank account and used to pay fortification costs (as the price of flour rose, this tax yielded significantly more than the price of premix).

5 Based on personal knowledge and experience of international experts Jack Bagriansky and Quentin Johnson