Food-Ratio Poverty Line

A PRIVATE CONSUMPTION-BASED method of determining poverty, food-ratio lines draw from the proportion of a household's money that is spent on food to calculate official poverty levels. It is a method, though alternately used by various nations, to distinguish between the poor and nonpoor on an estimated basis of what ratio of a household's income is spent maintaining a sustainable diet. Like other measurements used in calculating poverty, it has been the center of much dialogue concerning its applicability in the wake of recent changes in economic and social conditions that have occurred worldwide over the course of the last two decades.

Poverty statistics for use in all executive departments in the United States are based on Mollie Orshan-sky's definition of poverty thresholds, first developed in 1964, and slightly revised by committees in 1969 and 1981. Orshansky, an economist with the Social Security Administration, drew from a 1955 study that found that families with at least three members generally spent approximately one-third of their net income on food, and she used these findings in conjunction with four nutritionally adequate food plans designed by the Department of Agriculture to determine poverty thresholds.

The least costly or economy plan was taken and multiplied by three in order to calculate poverty thresholds for families throughout the country. For smaller families, such as two-person units, the cost of the food plan was multiplied by 3.7. Annual updates of the Social Security Administration poverty thresholds were based on changes in the prices of items on the economy food plan.

Calculating official poverty thresholds on the basis of the percentage that a household spends on food has been rather widely criticized by a number of individuals and organizations in the United States. Advocates for new measures of poverty suggest that food-ratio lines are antiquated and do not speak to economic trends that have followed in the wake of the 1960s, when this method of determining poverty was originally devised. They point to the increase in healthcare and transportation costs, the slow rise of minimum wages, and the impact of geographical housing markets as significant factors that are too often disregarded in current poverty calculations.

Though food too is impacted by inflation, there has been growing concern that it does not constitute the percentage of a family's income that it did in previous [Page 373]years, nor that it rises in response to inflation at the same rate as do these other costs. As a result, it is feared that families lacking basic necessities of food, clothing, shelter, and adequate healthcare are growing in number throughout the country, even as they are officially considered to be above poverty thresholds. Thus, many individuals are looking toward renewed forms of poverty measures that take account of income levels and the costs of affording basic needs that are not primarily based on food costs.

In Thailand, for example, the official poverty line is also consumption based, and is calculated from an estimated cost of basic needs that includes both food and non-food items. According to the National Development and Social Development Board, the food poverty line is derived from estimating the cost of food baskets. Per capita household caloric requirements are determined by adding up the required calories per day of each household member with respect to age and sex.

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