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BREASTFEEDING AND THE
MEASUREMENT OF ECONOMIC
PROGRESS
Julie P. Smith and Lindy H. Ingham
Thoughtful economists have long been aware of the limitations of
conventional National Accounts in measuring economic activity and
material wellbeing (Smith 1982). In principle, estimates of Gross
Domestic Product (GDP) attempt to cover all transactions in economic
goods and services. As early as 1941, a pioneer of national accounting,
Simon Kuznets, observed that:
‘Exclusion of the products of the family, characteristic of
virtually all national income estimates, seriously limits their
validity as measures of the scarce and disposable goods produced
by the nation’ (Kuznets 1941, p. 10).
Since the early 1970s, the conventional measure of the economy, the
United Nations’ System of National Accounts (SNA), has come under
increasing criticism for providing an inaccurate and misleading measure
of economic well being (Nordhaus and Tobin 1972; Mamalakis 1996;
Weinrobe 1974; Zolotas 1981; Nordhaus 2000).
By excluding the value of unpaid work, GDP understates economic
production. For example, estimates for the United Kingdom show that
the fraction of disposable adult time devoted to market work is only
around 20 per cent (Ausubel and Gruebler 1995; Nordhaus 2000).
Increased participation of women in the paid workforce over recent
decades also involves a shift in the economy from unpaid work which is
not measured, to paid work which is measured. This has been shown in
studies in the United States (Weinrobe 1974) and Australia (Smith 1982)
52 JOURNAL OF AUSTRALIAN POLITICAL ECONOMY No 47
to bias estimates of economic growth upward, and give misleading
indications of economic progress.
As conventionally measured, GDP also overstates economic growth
because it does not take proper account of the environment:
• Expenditures on remedying damage from pollution, etc, are included
in GDP but are more properly measured as ‘defensive expenditures’
(which are made to compensate for, redress or guard against losses
resulting from production) or degradation of the value of natural
resource assets.
• The national accounts exclude the value of (non-economic)
environmental assets and hence take no account of the depletion of
assets such as the wilderness, air and water. However, the income
received from sale of the products is included. This means the
nation's economic income is wrongly estimated. Receipts from
selling assets should take account of a fall in the nation's assets, not
just be counted as a flow of current income.
• Where production within the scope of the national accounts causes
pollution or damage to natural assets which is not remedied, the full
resource costs of that production are not measured, so GDP
overstates growth in economic welfare.
Moves have been made to respond to such criticisms. Recent progress is
summarized in Boskin (2000), with non-market work time seen as the
most important area for further work in the US. Boskin also lists
environmental capital and human capital among items of high priority for
inclusion as ‘satellite accounts’,1 and notes recent US initiatives in this
area. Economists attempted during the 1970s to adjust measures of Gross
National Product to account for the costs of pollution in reducing ‘Net
National Welfare’ or ‘NNW’ (Nordhaus and Tobin 1972; Peskin and
Peskin 1978). A recent study by the US Environment Protection Agency
1 Satellite accounts are accounting statements which are separate from, but
consistent with, the core national accounts detailing market transactions. See
discussion below on the Revised System of National Accounting.
BREASTFEEDING AND ECONOMIC PROGRESS 53
(1997) shows the economic impact of air quality on human health is
highly significant (see also(Nordhaus and Kokkelenberg 1999).
Moulton (2000) surveys improvements in US national accounting
practice and notes, for example, the work of Landefeld and Carson
(1994) who provide satellite accounts for natural resources to estimate
the contribution of environmental assets to national income. Landefeld
and McCulla (1999) also present satellite accounts for nonmarket
household production, incorporating unpaid household work and the
value of services provided by consumer durables in the US.
Surveying new directions in national economic accounting, Nordhaus
(2000) points out the importance of properly valuing human capital,
with a large and growing share of economic resources devoted to
investments in education and health. A recent study (Nordhaus 1999)
considers how standard measures of income would change if they
adequately reflected improvements in the US population’s health status.
Asking how much consumption the individual would be willing to pay as
a trade-off for better health status, this research showed that proper
accounting of the value of mortality and morbidity improvements would
produce a major revision to our measured standard of living over the last
century. Specifically, between 1900 and 1998 in the US the value of
improvements in life expectancy alone equaled the growth of all other
market goods and services put together.
Also, a number of countries including Australia now publish official
estimates of the economic value of unpaid work (for example, see
Australian Bureau of Statistics 1992). In the early 1990s, work began at
the Australian Bureau of Statistics (ABS) to estimate the value of
Australia's natural resource assets and include them in balance sheet
accounts (Australian Bureau of Statistics 1990; Ingham 1991; Ingham
1993).
Since 1997, the Australia Institute has produced an alternative to GDP as
a measure of economic progress, the Genuine Progress Indicator or GPI
(Hamilton 1997, 1999). This measure, which is known in some countries
as the Index of Sustainable Economic Welfare or ISEW, now adjusts
GDP for items such as income distribution changes, the value of unpaid
54 JOURNAL OF AUSTRALIAN POLITICAL ECONOMY No 47
and community work, and environmental degradation (Hamilton and
Denniss 2000).
However, feminist economists have also criticised the failure to include
reproductive functions and breastfeeding in measures of economic value
(Waring 1988), and this remains unaddressed. By ignoring human milk
production and the adverse health consequences of artificial infant
feeding, the national accounts produce incomplete and biased estimates
not only of food production, but also of economic progress and well
being.
While the health care cost implications of breastfeeding for developing
countries have long been accepted, recent research has highlighted
significantly increased health costs for artificially fed infants in
developed countries such as Australia (Drane 1997), the US (Ball and
Wright 1999; Riordan 1997), and the UK (Broadfoot 1995). In 1997, the
American Academy of Pediatrics ‘Policy Statement on Breastfeeding and
the Use of Human Milk’ cited epidemiological research from developed
countries, among predominantly middle class populations, showing that
human milk and breastfeeding of infants significantly decreased risk for
a large number of acute and chronic diseases.2 Breastfeeding has also
been related to possible enhancement of cognitive development (Drane
and Logemann 2000), and artificial feeding has been shown to have
significant adverse long-term effects on the health of mothers (Labbok
1999).
This paper examines the treatment of human milk production in
international standards for national accounting and in Australian national
2 This research was said to provide ‘strong evidence that human milk feeding
decreases the incidence and/or severity of diarrhea, lower respiratory infection,
otitis media, bacteremia, bacterial meningitis, botulism, urinary tract infection and
necrotizing enterocolitis’. The Academy of Pediatrics also pointed to a number of
studies showing a possible protective effect of human milk feeding against sudden
infant death syndrome, insulin-dependent diabetes mellitus, Crohn’s disease,
ulcerative colitis, lymphoma, allergic diseases, and other chronic digestive
diseases. Since the AAP study, several important high quality epidemiological
studies have provided further evidence of the health risks of artificial formula
feeding, including its long term effects on the risk of obesity, high blood pressure
and heart disease as well as pneumonia, gastroenteritis, respiratory illness, allergy
and necrotizing enterocolitis.
BREASTFEEDING AND ECONOMIC PROGRESS 55
accounts, and shows that human milk meets the criteria for inclusion in
Australia’s GDP. It then sets out the process for appropriately adjusting
the national accounts to incorporate human milk supply, and externalities
associated with infant feeding method. Using previously published
estimates of the economic value of human milk supplied in Australia for
1992, we show that economic gains from increased breastfeeding are
substantial compared with gains from recent major microeconomic
policy reforms. We also estimate the capitalised value of Australia’s
human milk production capacity, conceptually integrating our estimates
of human milk production with the building block for national
accounting, the nation’s capital stock.
The Revised System of National Accounting (1993)
In 1993, revised international guidelines were published for National
Accounting (commonly referred to as SNA93) (Commission of the
European Communities 1993). SNA93 describes how to compile
estimates of GDP, broadly comprising paid or marketable goods and
services.
SNA93 now includes in the measured boundary of production the ‘own
account’ production of goods by households. This includes agricultural
subsistence production, such as sowing, planting, tending and harvesting
field crops; growing vegetables, fruit and other trees and shrub crops;
gathering wild fruits, medicinal and other plants; tending, feeding or
hunting animals mainly to obtain meat, milk, hair, skin or other products;
and storing or carrying to some basic processing of this produce. In
Australia, the ABS already includes the value of homegrown fruit,
vegetables, eggs, beer, wine and meat in estimates of final private
consumption expenditure and therefore GDP. Continuing present
practice, SNA93 includes in the core accounts the value of agricultural
produce consumed on the farm. This means the national accounting
framework includes all non-marketed goods, including the production,
processing and storage of food by households, within the production
boundary for GDP. According to the ABS, the core accounts now include
‘the own account production of all goods retained by their producers for
their own final consumption or gross capital formation’ (Australian
56 JOURNAL OF AUSTRALIAN POLITICAL ECONOMY No 47
Bureau of Statistics 1992, pp. 6-7), thereby following the practice set
down in SNA93 (para 6.18).
Like its predecessor, SNA93 excludes from the core production
boundary for GDP ‘own account’ production of services within
households. However, it recommends for the first time incorporating
estimates of unpaid work, including unpaid household work (such as
domestic chores and childcare) and volunteer and community work, into
an expanded boundary of production. Production of services for own
final consumption within households are to be placed outside the core
accounts, in ‘satellite accounts’. However, SNA93 still makes no
mention of ‘reproductive work’ in either the core accounts or in satellite
accounts. Reproductive work covers a range of women's activities,
including childbearing, and breastfeeding.
It may be argued in this context that breastfeeding (which includes
human milk production) should be viewed as own account production of
a service for own consumption. In national accounting language, a
breastfeeding mother (the producer) would be providing an output
(human milk) to the consuming unit (her child). By the time the
production is completed the ‘service’ is consumed. It might be argued
that, unlike a good, this ‘service’ cannot be stored or resold; production
and consumption occur simultaneously (Commission of the European
Communities 1993, para. 6.3). Breastfeeding would then be excluded
from the core national accounts, but included in a ‘satellite account’.
However, this approach suggests that when a mother expresses milk to
feed her baby, for example in a bottle or for tube-feeding, SNA93 defines
it as a good included within the core production boundary. When she
breastfeeds her or another mother’s baby, it is excluded from both the
core and satellite accounts of the national accounting framework, as
neither apparently include breastfeeding ‘services’. This approach
amounts to defining human milk according to the container the consumer
obtains it in.
An alternative interpretation is that the value of ‘breastfeeding services’
and ‘human milk production’ can be considered separately, and that
human milk is a food commodity or good. As such, its production and
BREASTFEEDING AND ECONOMIC PROGRESS 57
value should be included in core account estimates of national food
production, consumption and GDP.
More specifically, human milk can be viewed as ‘own account’
production of ‘a good’ for ‘own consumption’. As noted above, the ABS
now considers that the core accounts include the own account production
of all goods retained by their producers. In national accounting language,
human milk is a good because it can be produced, stored, sold on
markets, and thus be valued (Commission of the European Communities
1993, para. 6.7). Viewed as a commodity which is supplied by mothers,
either through breastfeeding, or through expressing and storing for
supply via other mechanisms, human milk thus qualifies for inclusion in
the core accounts.
Human milk is a commodity, like home-produced and consumed goods
including on-farm production and use of milk, eggs and meat which, as
noted earlier, are included in the core accounts and GDP. Human milk is
a food commodity produced and expressed by mothers, and commonly
stored for various uses: this may include for tube feeding to sick or
premature babies; for feeding in a bottle or cup to a mother’s baby during
her absence such as while at work, or it may be fed to her own or another
mother’s baby either mixed with weaning foods or undiluted. Ηuman
milk is a commodity like blood, sperm or human organs which can, in
principle, be valued for national accounts purposes. The fundamental
criterion for inclusion of a good is that it can be traded in a market.
Numerous milk banks operate around the world, buying and selling
human milk.3 The existence of a market in human milk means there is a
price of a closely related or analogous product - a shadow price - from
which to impute its economic value.
3 Information on the operation of human milk banks in North America, Europe and
Asia is provided in (Arnold 1994; Arnold 1996; Fernandez, Mondkar and Nanavati
1993; Gutierrezde and Almeida 1998; Human Milk Banking Association of North
America 2001; Springer 1997; Tully 1991; United Kingdom Association for Milk
Banking 2001)
58 JOURNAL OF AUSTRALIAN POLITICAL ECONOMY No 47
Implications of Current Practice
There is clearly a very fine line between what is a good, and what is a
service for national accounts purposes, particularly regarding "own-
account" consumption within households. The distinction between a
good and a service in some areas is controversial among national
accountants.
National accounts provide a misleading picture of human food
production and consumption activities because they continue to exclude
human milk while including the manufacture and sale of artificial
formula milk. GDP presently also includes expenditures on health which
are needed to treat infant illnesses attributable to artificial feeding, and
thus overstates the gain in economic welfare from higher spending on
breastmilk substitutes and medical services.
Present practice has the startling result that increased breastfeeding and
human milk production reduces national food output and GDP, because
it lowers artificial formula and commercial baby food sales and reduces
private and public health expenditures. This is in spite of the substantial
economic gains from using a virtually-free, and environmentally-friendly
food resource, and despite the economic resource savings from
maintaining good health and reducing illness without the need for use of
medical services or products.
An equally questionable corollary is that the dramatic drop in
breastfeeding rates during the 1960s and 1970s improved national output
and economic growth by expanding production of formula and adding to
national health expenditures. This illustrates that increased expenditures
on formula and commercial baby food and associated higher health
spending cannot be interpreted as necessarily benefiting economic
growth or material well-being.
For example, the value of human milk production in Australia has been
estimated for 1972 and 1992, using several accepted valuation methods –
replacement cost, opportunity cost, and market cost (Smith, Ingham and
Dunstone 1998; Smith 1999). Using estimated breastfeeding prevalence
and daily milk yields for different ages of infants, annual human milk
production in Australia in 1992 was found to be 33 million kg. Based on
BREASTFEEDING AND ECONOMIC PROGRESS 59
the value of human milk traded by milk banks in Norway of US$50 per
litre (Oshaug and Botten 1994), this had a market value of around $2.2
billion a year. It was also shown this could be increased by $500 million
annually (0.1% of GDP) by meeting the National Health Target for
breastfeeding4 (Nutbeam et al. 1993) in the year 2000. If virtually all
Australian infants were breastmilk fed, in line with World Health
Organisation and UNICEF recommendations for optimal nutrition, the
implied increase in the value of output was $3.5 billion a year (0.7% of
GDP) to around $5.5 billion.5 This work showed that the extent of
artificial feeding in 1972 meant a loss of over $1 billion annually in the
value of Australia’s human milk production compared to 1992 levels,
and a loss of output of around $5 billion annually compared to the
biological potential production.
The ability of women to breastfeed represents a significant economic
productive capacity. As the production flow from this human capital
asset is not recorded as contributing to GDP or economic well-being, or
even acknowledged as a service in the satellite accounts recommended
by SNA93, it is rendered invisible to policymakers who use economic
statistics and GDP estimates to determine economic priorities.
Accounting for Human Milk
Properly applying existing definitions of the goods production boundary
for GDP would mean including estimates of human milk production
within the core accounts and in GDP. For meaningful and conceptually
consistent measures of economic well being, the attributable health costs
of formula feeding would be deducted from measured GNP.
The estimate of unpaid work would treat the value of time spent by
households nursing infants ill from artificial feeding as a ‘defensive
4 The National Health Target is for at least 50 per cent of infants to be fully
breastfed at 6 months of age.
5 According to WHO/UNICEF, optimal infant feeding involves exclusive
breastfeeding for around 6 months with continued breastfeeding to aged 2 years or
more (UNICEF 1999; WHO/UNICEF 1995).
60 JOURNAL OF AUSTRALIAN POLITICAL ECONOMY No 47
expenditure’,6 not an increase in imputed income. Costs of waste-
disposal attributable to artificial feeding would be deducted from the
value of GDP and counted as another ‘defensive expenditure’. The
degradation of natural (e.g. land) assets arising from the additional
production of animal milk supplies, would be counted as an added cost of
production, or as a depletion of assets as appropriate. For example,
increased dairy herds to provide bovine milk supplies represent an
unnecessary resource cost.7
Similarly by-products of the manufacturing process for artificial formula,
and associated products, packaging, transportation, etc, will add to air
and water pollution (Bundrock 1992; Radford 1992). To the extent the
costs of these production ‘externalities’ are not borne by the
manufacturers, they should be treated in the national accounts as a cost of
production or as ‘negative production’. On the other hand, the economic
opportunity cost of breastfeeding - where this is truly incompatible with
productive economic activity - should be recognised as an offset to the
value of human milk output. Some allowance might be made for any loss
of economic output (market and unpaid work productivity) attributable to
a mother’s lactation status.8 That is, the economic value of human milk
should be reflected in the Australian National Accounts by:
• adding to measured GDP the annual market value of human milk
produced, after
• deducting the goods cost of human milk production (additional food
consumption for lactating mothers is already included in final
6 That is, expenditures made to compensate for, redress or guard against losses due
to artificial feeding.
7 Each dairy cow typically requires 0.77 ha of land to produce around 5000 litres of
milk annually. Hence producing the 32 million kg estimated annual production of
artificial formula milk powder, equivalent to 238 million litres of milk, requires
the use of around 37,000 ha of Australia's prime farming land which could be used
for other productive purposes.
8 Many Australian mothers combine continued lactation with paid employment,
especially those with sufficient maternity leave to allow proper establishment of
lactation, those with flexibility in their working arrangements and/or timing of
return to work, or those with an older baby requiring less frequent milk feedings.
Employment is not given by mothers as the major reason for early weaning in
most surveys of breastfeeding cessation.
BREASTFEEDING AND ECONOMIC PROGRESS 61
consumption expenditures but should be counted as intermediate
consumption), and
• deducting from GDP an amount reflecting any reduction in market
output by mothers which is necessary on account of their lactation
status.
In principle, accounting for the economic value of human milk requires
adjusting for the negative externalities of artificial formula manufacture,
distribution and use:
• deducting from measured GDP the public and private health
expenditures associated with increased relative risks of infant and
maternal ill heath from current levels of artificial feeding;
• deducting from GDP and national natural capital stock estimates, the
attributable waste and degradation of economic land assets from
dairy production to supply manufactured formula milks or cows
milk to infants under two years old;
• deducting the pollution and waste disposal costs arising from
artificial formula milk production, packaging, distribution,
sterilisation, preparation and disposal.
A full accounting for the economic implications of breastfeeding would
also be reflected in satellite accounts for household services where time
assumed to be economically unproductive or unnecessary should be
deducted:
• reducing estimates of the value of unpaid household work to reflect
any additional time cost of breastfeeding compared to artificial
feeding;
• deducting the additional home nursing and other unpaid time costs
attributable to artificial formula feeding.
62 JOURNAL OF AUSTRALIAN POLITICAL ECONOMY No 47
Capital Stock Estimates
A basic building block of SNA93 is an estimate of a nation's capital
assets. These assets, of physical (‘man-made’) capital, and natural
resources such as land, (along with, theoretically, human capital),
produce a production and income flow. Increases in that income flow are
measured as economic growth.
The capacity of Australian women to breastfeed yields a potential annual
flow of economic income. Breastfeeding is a skill that is largely
culturally acquired. Our society's ability to sustain breastfeeding, and
therefore to maintain current or potential production levels of breastmilk
and its beneficial health ‘externalities’, depends on a supportive
breastfeeding culture. This ‘culture’ or knowledge of breastfeeding,
passed on from mother to mother, or through public education and
institutional or organisational knowledge, is therefore a valuable
economic asset. Whether this asset is used to its full capacity in
nourishing children depends on whether institutional arrangements and
cultural values or practice are fully supportive of breastfeeding.9
To maintain consistency between estimates of annual contributions to
national income from breastfeeding and estimates of the capital stock
underpinning such production, it is necessary to value this underlying
human capital asset.10
The usual way of valuing an asset is as the capitalised value of its future
net income stream. The net economic value of breastfeeding in Australia
is estimated at around $2 billion a year, after adjustment for additional
maternal food consumption (Smith, Ingham and Dunstone 1998). The
capitalised value of Australia's current breastfeeding capacity is therefore
9 Breastfeeding also contributes to the long term health status and productive
capacity of the labour force because it promotes better health for both mother and
child.
10 The conceptual basis for such a calculation is implicitly acknowledged in research
by the Commonwealth Treasury on Australia's public investment performance
(Depta, Ravalli and Harding 1994), which suggests increased public investment in
human capital in the form of certain health and education expenditures as an offset
to slower expansion of public investment in physical capital in recent years.
BREASTFEEDING AND ECONOMIC PROGRESS 63
around $37 billion, assuming a 50 year time horizon and a 5% rate of
discount of future benefits.
The value of this human capital asset in 1992 makes it comparable with
the value of Telstra, at around $30 billion (Quiggin 1995). It greatly
exceeded the value of Australia’s livestock ($17.9 billion) and Australia's
plantation forests ($4.5 billion) (Australian Bureau of Statistics 2000).
The potential economic value of Australia’s human milk productive
capacity is currently considerably greater than its actual level. In the
1920s, around 80 per cent of Australian infrants were reportedly fully
breastfed at aged 9 months (Mein-Smith 1991). According to WHO,
around 95-98% of women are physiologically capable of breastfeeding
(World Health Organisation 1991). If all Australian infants met this
criteria for optimal nutrition, the value of human milk production would
be nearly three times its value based on present breastfeeding rates
(Smith 1999). The value of this capital asset at the physiological
maximum is thus around $100 billion, standing alongside Australia's sub-
soil mineral assets, currently valued by the ABS (2000) at around $152
billion.
The above capital stock value estimates are in gross terms, that is, they
ignore depreciation on the asset. Physical assets are usually depreciated
at a rate which reflects the economic life of the asset. In principle, the
economic life of the asset represented by women’s biological capacity to
produce human milk is unlimited or infinite. Recognising the importance
of cultural and institutional influences on breastfeeding rates in a market
economy suggest nevertheless that maintaining the value of the asset
intact, or ensuring its full utilisation, is not totally costless.11
11 This is, for example, because of the apparent need for provision of breastfeeding
support services, lactation consultants and counsellors, and breastfeeding
education, and the small but significant conflict between employment institutions
and breastfeeding for some mothers. The actual cost is difficult to estimate,
although the Federal government recently allocated a total of $2 million over 3
years for breastfeeding promotion through its National Breastfeeding Strategy,
while some State governments also provide financial support for breastfeeding
programs through their health departments.
64 JOURNAL OF AUSTRALIAN POLITICAL ECONOMY No 47
In fact, the difference between this biological maximum value of of
Australia’s breastfeeding capital stock at around $100 billion, and the
estimated current value of $37 billion, is a measure of the extent to which
industrialisation, and commercialisation of infant feeding, has degraded
this component of Australia’s natural capital.
Implications
Previous research has shown that human milk is important enough
economically in Australia that increasing breastfeeding overshadows all
government ‘microeconomic reform’ measures in raising national output
and living standards (see Table 1). Yet governments continue to devote
effort to reforming relatively low return sectors of the national economy.
Table 1: Micro-Economic Policy Changes
Policy Estimated Economic Gain
Deregulating statutory marketing for dairy
producers (Industry Commission 1995a) $50 million
Waterfront reform (Industry Commission
1995b) $15 million
Deregulating telecommunications or public
utilities (Quiggin 1996) $500 million - $3 billion (0.1-0.6%
of GDP) annually over 5 to 10 years
Introducing a Goods and Services tax (GST)
(Chisholm 1993) $1 billion (0.2% of GDP)
Achieving National Breastfeeding Targets
(Smith 1999) $500 million (0.1% of GDP)
annually
Source: Table 9, Smith, Ingham and Dunstone (1998).
Unlike for many other ‘microeconomic reforms’, the economic gains
from increased human milk production are potentially ongoing. Unlike
other efficiency boosting measures, increasing breastfeeding has the
potential to directly improve equity, as breastfeeding is equally possible
BREASTFEEDING AND ECONOMIC PROGRESS 65
physiologically for virtually all mothers and babies regardless of income
(World Health Organisation 1991).12
As well as being a major economic issue, infant feeding practices are
significant to public health. Increasing pressures to lower health costs are
leading to a focus on preventing health problems, rather than treating
illness and disease after it occurs. Breastfeeding is a key preventative
health measure (American Academy of Pediatrics 1997). Promoting,
encouraging and supporting breastfeeding is a primary aim of nutrition
and better health programs in Australia (National Health and Medical
Research Council 1996). Making human milk more widely available
would produce significant savings in national health costs, including
costs met by taxpayers. Most studies of breastfeeding vastly understate
its economic value because of difficulties quantifying the health costs of
artificial feeding.
Breastfeeding is an activity with elements of a “public good”, with a
strong tendency to be under-produced if infant-feeding choice is left to
market forces alone. As the Australian Panel on Marketing of Artificial
Infant Formulas commented in 1994:
Breast milk does not have the marketing resources of commercial
products. Its superior nutritional, immunological and health
advantages are not well known. Industry promotion has
contributed to the belief held by many health professionals that
infant formula resembles breast milk so closely that it does not
really matter which is used (Advisory Panel for the Marketing in
Australia of Infant Formula 1994).
There are strong commercial pressures promoting artificial milk
formulae and commercial baby foods as an alternative to breastfeeding.
Annual sales of infant formula in Australia are estimated at around $135
million (Smith, Ingham and Dunstone 1998), while the size of the
12 Realising this potential gain would however, require policy, institutional and
policy change to ensure that mothers in disadvantaged socio-economic groups
have comparable access to breastfeeding support and flexible employment as other
mothers. Although in developing countries, poorer, rural mothers are more likely
to breastfeed than urban, middle-class mothers, the reverse is generally true in
Australia (Donath and Amir 2000).
66 JOURNAL OF AUSTRALIAN POLITICAL ECONOMY No 47
commercial baby food market, such as for cereals and other weaning
foods, is unknown but likely to be of at least a similar magnitude.
Notwithstanding the efforts of volunteer breastfeeding support groups
such as the Nursing Mothers’ Association, or the growing number of
lactation consultants with a professional interest in breastfeeding
problems, there is no comparable industry lobby developing a market for
breastfeeding, or promoting the wider availability of human milk. Nor is
there any powerful force redressing the negative cultural images,
misinformation and mythology about human milk and breastfeeding
management that became prevalent during the 1960s.
Making human milk more widely available to Australian babies depends
on the active and energetic commitment of government and the health
professions, as well as recognising its significance. Political leadership
and commitment of resources comparable with that on the vaccination
issue is necessary to overcome entrenched attitudes, widespread
ignorance, and inappropriate practices which hinder breastfeeding and
the consumption of human milk. For example, it would be a major
human rights incident with significant political and legal consequences if
inmates of mental institutions or residents of nursing homes were fed a
diet which doubled their risk of illness, and dramatically increased their
risk of cancer, diabetes, and mental disability. Yet few question the
provision of such a diet to Australian babies, less than half of whom are
exclusively breastfed for around 6 months (Donath and Amir 2000).
Acknowledging the economic implications of breastfeeding should raise
its priority with governments. The economic case for public action to
promote, encourage and support breastfeeding is strong - the existence of
significant “externalities”, information failure, and substantial
welfare/efficiency and equity gains.
However, unless the nutritional and health value of breastfeeding is
clearly visible to policymakers, production of this unique food and
‘broad spectrum medicine’ will continue to be undervalued. Human milk
should be included in national and international economic statistics as
breastfeeding will not otherwise be given the importance it deserves in
the formulation of economic, fiscal and preventative health policy.
BREASTFEEDING AND ECONOMIC PROGRESS 67
Conclusion
The economic wealth of a nation is calculated in terms of a wide
variety of assets ranging from raw materials and capital goods to
the value added to natural resources through industrial
processing. Human labour is a major economic resource and
valued for its role in producing wealth through work, such as
farming, extraction of raw materials or manufacturing. The
lactating mother is an exceptional national resource, for not only
does she process coarse cheap foods to produce a unique and
valuable infant food, but also the production process (lactation)
provides immeasurable benefits to health ... In contrast to
virtually all processing industries, the lactating women requires
no capital outlays and the direct benefits are enjoyed uniquely
and fully by the producer and her child. Mother milk production
is the ultimate in economic equity, with "right-to-work" enjoyed
by all, direct and immediate value to the producer and far
reaching benefits affecting all of society (Rohde 1982).
This article has applied conventional economic logic and officially
accepted principles of national accounting to the measurement of
production of human milk. It has shown that current ABS treatment,
which supposedly includes all goods within the ‘core’ production
boundary for the national accounts, excludes breastmilk production and
its consumption by infants, and that this practice is inconsistent with the
present international system for national accounting, SNA93. Even that
part of human milk production which is expressed and fed to babies in
artificial containers - and is thus completely ‘commodified’ - is presently
not counted in GNP. This is despite official ABS imputations being made
for comparable goods which are produced and consumed on-farm, but
are not actually marketed. As a commodity which can be stored,
marketed and traded, we have shown using SNA93 guidelines for the
‘core production boundary’ that all production of human milk should be
included in ‘core’ national accounts. While an argument can be made for
viewing breastfeeding as a service, we show breatfeeding is best viewed
as supply of a good, and point out that breastfeeding does not appear to
be included as a service in SNA93 satellite accounts.
Using the logic of SNA93 and using existing published estimates of the
value of human milk supply in Australia, we have shown that large
68 JOURNAL OF AUSTRALIAN POLITICAL ECONOMY No 47
economic gains could be achieved, in the form of increased goods
production, if breastfeeding of infants was increased. Also, using the key
building blocks for conventional national income accounting, this article
considers the capital stock value of Australia’s breastmilk production
capacity. The difference between the value of this asset at its biological
maximum of around $100 billion, and its value measured at current
Australian breastfeeding rates of around $37 billion, is a measure of the
extent to which industrialisation and commercialisation of infant feeding
has degraded one of Australia’s most important environmental assets.
Exclusion of human milk production distorts the view of economic
activity provided by Australia’s national accounts because it implies
significant mismeasurement of food production and consumption, and
wrongly counts as economic gain the increased defensive expenditures
on health care arising from higher consumption of breastmilk substitutes.
Due to the present ABS practice of excluding human milk, measured
GDP would decline if more babies were breastfed. Present national
accounting conventions mean the precipitous fall in human milk
availability during breastfeeding declines of the 1960s and 1970s boosted
economic growth, in spite of this actually representing an estimated fall
in national food production exceeding $1 billion a year and a worsening
of infant health and nutrition status. These are ridiculous results and
severely undermine the public credibility of GDP estimates and other
economic data.
As well as resulting in a distorted view of changes in material living
standards, the invisibility of human milk in Australian economic
statistics has contributed to a distorted perspective of economic reform
priorities. Excluding human milk from production statistics reinforces an
erroneous view of households as consumers, rather than as producers of
goods and services having economic value. An example of this is the
consumption tax anomaly whereby some mothers’ milk is effectively
‘input taxed’ through imposition of the Goods and Services Tax (GST)
on lactation aids such as breastpumps. Both commercial baby foods and
formulae are free of GST at all stages of production and sale with, for
example, no GST on-farm milking machinery, or infant food
manufacturing equipment (Smith 2000).
BREASTFEEDING AND ECONOMIC PROGRESS 69
Including human milk in national food production statistics emphasizes
the extent of breastfeeding and its value to societies as well as to
economies. Incorporating human milk in food supply and other economic
statistics such as GDP would improve the quality of economic
policymaking and help prevent policies being distorted by a narrow focus
on market production and commercial objectives.
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