Acknowledgements
Executive summary
2. MEETING CONSUMER DEMAND
The advantages of catering to the consumer
Matching production with demand
Where to produce
Utilizing price information
3. ON-FARM POST-HARVEST OPERATIONS
Identifying economically viable improvements
Economics of post-harvest improvement
Social aspects
4. STORAGE IN THE MARKETING SYSTEM
Ensuring economic viability
Changing storage requirements
5. IMPROVING MARKETING SERVICES TO FARMERS: THE ROLE OF GOVERNMENTS
An enabling environment for the private sector
Providing marketing information
Roads
Constructing and operating markets
The role of extension services
6. SUPPLYING THE CITIES
The pace of urbanization
The need for wholesale distribution systems
Marketing of animal and fisheries products
Low-cost food retailing
Street food vending
7. FOOD PROCESSING
The role of food processing
Demand for processed products
Constraints to agro-industrial development
Official food control
International trade
8. PRIORITIES FOR ACTION
Policy
Research
Technology
Infrastructure
Extension
Support services to the private sector
The preparation of the World Food Summit technical background documents has mobilized, in addition to FAO’s own staff contribution, a considerable amount of expertise in the international scientific community, drawn from partner international institutions and governmental or non-governmental circles. The process has been monitored at FAO by an internal Reading Committee, composed of staff selected ad personam and established to ensure that the whole collection meets appropriate quality and consistency criteria.
The present document has been prepared by FAO’s Andrew W. Shepherd, with additional input from Marianne Flach and Morton Satin. After initial review within FAO by all technical departments, invited colleagues and the Reading Committee and by selected external reviewers, a first version was published and circulated for comments to governments, intergovernmental organizations (IGOs) and non-governmental organizations (NGOs) as well as further peer reviewers. Much appreciated comments and advice have been received from A. Beattie and colleagues at the Natural Resources Institute, United Kingdom; R. Booth of the International Centre for Agricultural Research in the Dry Areas (ICARDA), the Syrian Arab Republic; G. Scott of the International Potato Centre, Peru; Vicente Lim of the National Agriculture and Food Council of the Philippines; and Prof. Norman Uphoff and colleagues at Cornell University, United States.
While grateful for the contributions received from all reviewers, the FAO Secretariat bears the responsibility for the content of the document.
This paper focuses on the marketing, processing and distribution of food. It stresses the importance of these functions, briefly reviews some of the ways in which they can be made more efficient and concludes with a discussion of priority areas for further improvement, covering topics such as policy reform, research and technology and infrastructure development. The whole range of activities within the post-harvest sector is considered, from household-level food processing to large-scale infrastructure development.
Food marketing, processing and distribution activities account for a significant proportion of the consumer price and make a major contribution to national employment and incomes. An efficient post-harvest and marketing chain promotes production and distribution in accordance with consumer needs and ensures that the costs of transfer from producer to consumer are kept to a minimum. Effective marketing guarantees food availability and facilitates access to inexpensive, but safe, food. A sustainable post-harvest and marketing system is thus a precondition for food security.
Much of the food that is produced is never consumed. This results both from production being carried out without reference to consumer demand and from losses that occur in the post-harvest chain. Government subsidies continue to have the effect, in some cases, of stimulating excessive production of some products and too little of others. Moreover, many farmers still lack adequate information on demand, and this also leads to overproduction and, hence, a misallocation of productive resources such as water and inputs.
Improvements in handling, storage and distribution can do much to reduce post-harvest losses, thus lowering costs to the buyer and improving returns to participants in the food chain. However, care must be taken to ensure that such improvements are economically viable and fit in with the way the marketing system functions. Many post-harvest innovations, both those aimed at small-scale farmers and those at large-scale facilities, have been neither economically nor socially viable.
While many governments in the past saw their role as one of direct intervention in the marketing system, the majority are now reorienting their functions to facilitate marketing, storage and distribution by the private sector. The paper identifies a number of areas where support is required, including the development of an appropriate legal environment in which the private sector can function, the provision of marketing information services to enable farmers and traders to make informed decisions about what to produce and where to sell, and the construction of infrastructure such as rural markets. The development of post-harvest and marketing knowledge within the agricultural extension services is also considered.
Urban populations are growing by some 60 million people a year. This growth will continue to present enormous challenges for the suppliers and distributors of food. On the one hand, incomes of some urban dwellers are rising rapidly, leading to increasing demand for more expensive foods as well as for processed products. On the other hand, many urban dwellers in developing countries remain highly disadvantaged, having only very limited purchasing power. For these people, guaranteeing the efficient distribution of low-cost but nutritious food will be one of the major food security issues in the coming decades. The paper discusses ways of improving rural/urban food distribution linkages and briefly considers experiences with low-cost food supply programmes. The important role of street food vending is also examined.
The paper reviews the role of food processing, from preservation by individual households to provide food when other sources are scarce, to the level of large-scale agro-industrial processing. The sector is a major employer of both rural and urban dwellers, especially women, and an important vehicle for growth in many countries. All processing operations, whether small-scale or large ventures employing thousands of people, must be based on the existence of a demand for the processed product, a demand that can be satisfied profitably. Unfortunately, agroprocessing in many developing countries has tended to be promoted as a way of disposing of surplus production, without reference to the demands of the market, thus leading to the existence of numerous “white elephants”.
Governments can provide an appropriate environment in which the post-harvest sector is able to function profitably. Policies should stress the crucial role of this sector in ensuring an adequate, affordable and safe supply of food to consumers and in maximizing the efficiency of the production system. Governments can also make certain that policies, laws and regulations are consistent with the need to encourage the efficient functioning of the private sector in marketing and processing. Where it does not yet exist, the creation of an adequate body of contract law, to provide security for those carrying out commercial transactions, is essential.
The paper highlights a number of priorities for action in the sector. These cover the areas of policy and legislative development; research into the post-harvest system; technology development and infrastructure improvement; promotion of improved post-harvest and marketing knowledge through the extension services; and, finally, the provision of the necessary support services for the private sector.
