According to the World Development Report 2000-2001 almost half of the world’s population – 2.8 billion out of 6 billion live on less than $2 a day; while a fifth, i.e., 1.2 billion live on less than $1 a day with 44 per cent of them living in South Asia.1 The Pakistan Economic Survey 2000-2001 reports that about 33 per cent of the country’s population is living below the food poverty line.2 Food poverty trends since 1990-91 shows that food poverty has been on the rise since 1990-91, with a higher increase being observed in rural areas where food poverty increased from a low of 22.5 per cent in 1992-93 to a high of 34.8 per cent in 1998-99 (Table-1). In Pakistan, a large share of the household budget is spent on food. Approximately half of the household consumption expenditure is used to meet the nutritional requirements of the household at the national level. In rural areas this proportion is about 54 per cent, while in urban areas it is 41 per cent3 (see Appendix Table-1). Despite such high proportions of consumption expenditure on food, the incidence of food poverty remained high, about one-third of households were living below the food poverty line and were not meeting their nutritional requirements