Improving human health has been an important global goal due to its linkages to human capital growth, productivity, income generation and economic development [28]. As a result, global health care expenditure has risen dramatically over the last two decades from 4–9.8% of the global gross domestic product [38, 44]. However, high income countries constitute the largest share of the observed health care expenditure (80%) while low income countries mostly found in Sub-Saharan Africa (SSA) and South Asia constitute the lowest share amounting to 0.24% of the growth in health care expenditure [38, 44]. To achieve sustainable development goal 3-“achieve healthy lives” in low income countries, it was estimated that an additional 41 US$ per capita per year will be needed from the current 34.9 US$ per capita [44, 46].
The observed increase in health care expenditure in low income countries over the last decade has been attributed by factors including an increase in food poverty which affects about 10% of people worldwide whereby 60% of these are found in developing countries [15]. Malnutrition due to poor diets also affects around two billion people world -wide and has a significant impact on health and health expenditure. Other factors include the emergence of chronic diseases including diabetes and heart disease and partially due to investment in health care facilities [38]. Food poverty and malnutrition account for 3% of global total health care spending and 45% of deaths occurring to children under five years annually [44].
Per capita health expenditure in Tanzania as in other low income countries is low at an average of US$ 40.3 relative to an average of US$79.4 for SSA, US$ 5638.7 per capita for high income countries and the World average of US$ 1121.9 per capita [44]. Similarly, food poverty and malnutrition which are linked to health care expenditure are estimated at 8% and 31.8% respectively [31, 42]. The rate of malnutrition is higher than the average for SSA (23.2%) thus placing the country in the third position of countries with chronic malnutrition in SSA [14, 23].
There is an increase in extant literature linking food poverty, dietary diversity and health care expenditure [6, 10, 11, 18, 28, 43]. Food poverty affects health expenditure through a number of ways including reliance on less health diets relative to the required minimum amount and quality, and trade-off between food purchase and health care expenditure [11]. It also correlates more with health behaviours and outcomes and health care access than income [26]. Food poverty strongly predicts mental and physical health among adults [6]. Similarly, dietary diversity provides macro and micro nutrients necessary for proper functioning of body mechanisms and thereby affecting health [28].
Food poverty and dietary diversity are in turn affected by household’s agricultural production among other factors including political, institutional, environmental and social factors. Agriculture sector is essential in reducing food poverty and ensuring an increase in dietary diversity in Tanzania since it employs about 61% of its population, generates 24–29% of the country’s gross domestic product (GDP) and 30% of its export earnings [42]. Agricultural production affects food poverty and dietary diversity through two pathways – 1) direct pathway, 2) indirect pathway. Existing empirical evidence show a direct link between agricultural production, food poverty and dietary diversity through own food production [7, 9, 30, 35, 36]. Since about 50% of households in Tanzania sell less than 15% of their annual food produce, their diets are largely determined by the agricultural output produced [28]. Food poverty and Dietary diversity thus influences health expenditure through the extent of food security and micronutrient provision. An increase in the quantity and diversity of food produced leads to an increase in own food security, affects price level and micronutrient availability which in turn affects health expenditure.
The second pathway (indirect pathway) involves income generated from the sale of agricultural produce. With developed market outlets for agricultural produce, the sector generates income that could be used to purchase more food and highly nutrient dense foods to supplement own-food production and thus reducing food poverty and an increase in dietary diversity [8, 13, 16, 17, 34]. Income from agricultural production also influences the purchase of health services. However, the causal link between food poverty, dietary diversity and health expenditure is complex.
The complexity emanates from whether it is food poverty and dietary diversity that affect health and hence low or higher health expenditure, or it is health status that affects food poverty and dietary diversity through provision of labour force in agriculture (reverse causality). In this study, we examined whether there is a link from agriculture to health expenditure. The pathways from household’s participation in agricultural production to health expenditure mediated by food poverty and dietary diversity are shown in Fig. 1.
Despite existence of evidence on the linkages between agricultural production and health outcomes, most of the previous studies focused on the effects of crop diversity or specific crop production on nutrition and dietary diversity thereby breaking the causal link between agriculture and health care expenditure [4, 9, 12, 40]. Even few existing studies that tried to link agriculture and health used anthropometric measures of health status and were specific to a certain proportion of population including children, women of reproductive age and adults [18, 28, 36, 37]. Others examined the effect of specific crop production on health care expenditure [10]. Furthermore, some studies focused on the effect of food insecurity specifically to developed countries including the United States of America [6, 18, 37]. Similarly some existing studies have presented mixed results. For example, [26] showed that there was a positive relationship between agricultural production diversity and height-for-age Z-score among children in Zambia while [39] examined the effect of crop diversity on height –for-age Z-score in Nepal and found an insignificant effect.
Agricultural production has been shown to positively and negatively affect human health. On a positive stand point, a study by [43] in Tanzania, using an instrumental variable approach, found that, households participating in urban agriculture increased the consumption of more food groups translating into significant improvement in health of children in both short and long run. This reduces health care expenditure resulting from malnutrition incidences and the budget that could be used in purchasing medication could be used to purchase more food varieties and further improve health [6].
[28] studied the effects of household crop diversification on child health using anthropometric measures of health including weight –for-age Z-score (WAZ), and height-for age Z-score (HAZ). Based on the three waves of Tanzania national panel survey, the study findings showed that crop diversification positively affected child health with a marginal effect for HAZ measure even though it resulted into increased dietary diversity among households who diversified their crops cultivation. [10] examined the effects of participation in oil palm cultivation on household living standard measured in terms of health expenditure as a proxy for health status, education, nutrition, social connectedness and living condition status. The results from this study showed that households cultivating oil palm had higher dietary diversity (6.94) than that of non-cultivators (6.59). Due to higher income generated from oil palm production, cultivating households had 40% more health expenditure than non-cultivating households which implies that participating in oil palm cultivation improves household health.
[36] conducted a study on the effects of household participation in irrigation on an anthropometric measure of health called weight-for-height z-score (WHZ), women’s and household’s dietary diversity in Ethiopia and Tanzania. Through the use of panel fixed effect model, the study findings showed that, participating in irrigation agriculture resulted into higher dietary diversity and was reflected in the improved child health where children of households participating in irrigation had a WHZ of 0.87 standard deviations higher than those who did not participate. This signifies that participating in the irrigation agriculture improved household economic access to food, improved nutrition and health and thus reduces health expenditure on malnutrition related diseases.
However, on the negative side, low farm productivity which is linked to food insecurity results into malnutrition and hence high health expenditure. For example, a study by [6] examined the effect of food insecurity on health care expenditure in the United States using zero inflated negative binomial regression. The results showed that, food insecure households had significantly higher average annual health expenditure of $ 6072 than those who were food secure ($ 4208). The paper implied that food insecurity is associated with increased health care expenditure. The results from this study are in conformity with those of [20, 21] in the United States of America which found that an increase in food insecurity was associated with an increase in health care costs. Food insecurity is linked to a variety of chronic health conditions like diabetes, depression, heart attack and hence leading to increased health care expenditure in curing these diseases [19].
Similarly, agricultural production negatively affect human health through exposure to harmful agro-chemicals and injuries associated with agriculture. Through a review of literature on the pesticide formulants and their distribution pathways on human health, [20] showed that occupational exposure, local/imported foods, as well as occurrence of accidental spills of agrochemicals mutates the human genetic make-up and metabolism which in turn affects endocrine and reproductive development. [22, 45] examined the environmental and health hazards resulting from agricultural pesticide use in Ethiopia. The study findings showed that household members exposure to pesticides results into negative health impacts including skin irritation, nausea, headache, discomfort and dizziness. These in turn could lead to increased health care expenditure. Similarly, a study by [20] in China showed that, a one percent increase in pesticide application by rice producers would result in a 0.213 million US $ increase in medication costs in China.
Our current study contributes and deviates from existing literature in the following ways. First, our study examines the effect of household’s agricultural participation on health expenditure mediated by food poverty and dietary diversity in a developing country perspective unlike previous studies [33]. Second, we use country representative data on aggregate crops produced to provide a holistic picture on the relationship between agricultural participation and household’s health expenditure with evidence from Tanzania. The paper is organized as follows. Section 2 presents the methodology explaining the source of data and description of key and control variables used as well as an analytical framework. Section 3 presents the empirical results while the conclusion and policy implications are presented in section 4.