With more than 800 million people in developing countries still suffering from chronic undernutrition, hunger and food security will remain the top priority for food policy for many years to come. But profound demographic and economic changes are rapidly transforming food systems and the scope and nature of nutritional challenges.
Although the pace of change varies considerably from region to region, common trends can be identified throughout the developing world. Population is becoming increasingly urban. Average incomes and calorie intake are rising. Commodity and food prices are falling. An increasingly integrated world trade environment and improved transportation facilities are spurring a greater concentration of the food industry and a convergence of dietary patterns and preferences.
Rapid growth of cities and incomes
According to the latest UN estimates, almost all of the world's population growth between 2000 and 2030 will be concentrated in urban areas in developing countries. If present trends continue, urban population will equal rural population around 2017. By 2030, almost 60 percent of the people in developing countries will live in cities.
As economic development fuels urban growth it is also driving per capita incomes higher. And the proportion of people living in extreme poverty and hunger is slowly shrinking. The latest projections by the World Bank show income per person in the developing countries growing at an annual rate of 3.4 percent for the period 2006-2015, twice the 1.7 percent registered during the 1990s.
Over the same time period, the average daily caloric intake in developing countries is expected to increase by nearly 200 kilocalories (see graph). The largest gains are projected in sub-Saharan Africa and South Asia, although the pace of progress in these regions is still likely to fall below what would be needed to reach the World Food Summit goal.
Convergence in diets
The combination of growing cities and rising incomes has contributed to significant changes, not only in the average number of calories that people in developing countries consume, but in the foods that make up their diet.
As total caloric intake has increased, so has the proportion of those calories derived from vegetable oils, meat, sugar and wheat. To a large extent this reflects the preferences of consumers whose rising incomes allow them to purchase more expensive and more highly valued foods.
Other contributing factors include the steep decline in prices and rapid growth in imports of wheat and other commodities produced in temperate zones and exported mainly by the industrialized countries. Net imports of these commodities by developing countries have increased by a factor of 13 over the past 40 years, and are expected to grow by another 345 percent by the year 2030, offering further evidence of changes in food systems and dietary preferences.
Nutrition experts identify two distinct trends fuelled by these changes: dietary convergence and dietary adaptation. Dietary convergence refers to the increasing similarity in diets worldwide. It is characterized by a greater reliance on a narrow base of staple grains (wheat and rice), increased consumption of meat, dairy products, edible oil, salt and sugar, and lower intake of dietary fibre (see graph). Dietary adaptation, on the other hand, reflects the rapid pace and time pressures of urban lifestyles. In households where both parents often commute long distances and work long hours, consumers eat more meals outside the home and purchase more brand-name processed foods.
Concentration of food processing and retail trade
The trends towards dietary convergence and adaptation have also been fuelled by the increasing concentration of food processing and retail trade. Latin America and Asia, the regions where these trends have been most pronounced, have experienced explosive growth both in investments by transnational food corporations and in the proportion of food sold through supermarkets.
In the decade 1988-1997, foreign direct investment in the food industry increased from US$743 million to more than US$2.1 billion in Asia and from US$222 million to US$3.3 billion in Latin America, outstripping by far the level of investments in agriculture (see graph).
Over roughly the same period, the share of food sales made through supermarkets more than doubled both in Latin America and in East and Southeast Asia (see graph, next page). In Latin America, supermarkets increased their share of retail food sales by almost as much in one decade as it took them 50 years to do in the United States of America. In the larger and wealthier countries that account for three quarters of the Latin American economy, the share of supermarkets increased from about 15-20 percent in 1990 to 60 percent in 2000. In Asia, the supermarket boom started later but took off even more quickly. In just two years, from 1999 to 2001, the share of supermarkets in sales of packaged and processed food in urban China increased by more than 50 percent.
Transnational food companies played a big part in this supermarket boom as well. Between 1980 and 2001, each of the five largest global supermarket chains (all based in Europe or the United States) expanded the number of countries where it operated by at least 270 percent (see graph). The rapid growth and increasing concentration of supermarkets are among the most visible causes and consequences of the transformation and consolidation of global food systems - the entire chain from agricultural production through trade, processing, retail and consumption. These changes have profound implications for the food security and nutritional well-being of people at both ends of the chain, from farmers who must adapt to the requirements and standards of changing markets to urban consumers who depend increasingly on processed foods and meals purchased from street vendors and fast food restaurants.
Changes in food markets, fuelled by the rapid growth of cities and incomes, have major implications for the food security of millions of people who are neither urban nor affluent - the small farmers and landless labourers in rural areas who make up the vast majority of the world's chronically hungry population. For these households, the globalization of food industries and the expansion of supermarkets present both an opportunity to reach lucrative new markets and a substantial risk of increased marginalization and even deeper poverty.
Over recent decades, a handful of vertically integrated, transnational corporations have gained increasing control over the global trade, processing and sales of food. The 30 largest supermarket chains now account for about one third of food sales worldwide. In South America and East Asia, the supermarket share of retail food sales has ballooned from less than 20 percent to more than 50 percent over the past decade (see graph). And the biggest chains, most of them owned by multinational giants, now control 65 to 95 percent of supermarket sales in Latin America (see graph).
Opportunities and risks
The increasing dominance of supermarkets has yielded greater consumer choice, more convenience, lower prices and higher food quality and safety for urban consumers. It has also led to consolidated supply chains in which buyers for a handful of giant food processors and retailers wield increasing power to set standards, prices and delivery schedules.
The globalization of supermarket procurement has created unprecedented opportunities for some farmers in developing countries. In Kenya, for example, exports of fresh fruits, vegetables and cut flowers for sale in European supermarkets have soared to more than US$300 million per year. Smallholders who grow for the export market enjoy significantly higher incomes than non-participating households. A recent study found that if non-participating rural households were able to take up growing horticultural crops for export, their poverty rate would decrease by approximately 25 percent (see graph).
But as the scale of Kenya's exports has grown, the share produced by smallholders has dwindled. Before the horticultural export boom in the 1990s, smallholders produced 70 percent of vegetables and fruits shipped from Kenya. By the end of the 1990s, 40 percent of the produce was grown on farms owned or leased directly by importers in the developed countries and another 42 percent on large commercial farms. Smallholders produced just 18 percent.
The rise of supermarkets in developing countries has created a domestic sector with centralized procurement and high-quality standards that has quickly outgrown the export market in most countries. Latin American supermarkets, for example, now buy 2.5 times more fresh fruit and vegetables from local farmers than the region exports to the rest of the world. Like their counterparts in the industrialized countries, domestic supermarket chains are shifting towards contracts with a limited number of suppliers who can meet their requirements (see graph, next page).
Carrefour, the world's largest supermarket chain, has set up its own, huge distribution centre in São Paulo, Brazil, serving a market of more than 50 million consumers. Carrefour buys melons from just three growers in northeast Brazil to supply all its Brazilian stores and to ship to distribution centres in 21 countries.
Small dairy farmers in Brazil have also borne the brunt of consolidation. Between 1997 and 2001, more than 75 000 Brazilian dairy farmers were “delisted” by the 12 largest milk processors (see graph). Most presumably went out of business. Similar consolidation has been taking place at an even more rapid rate in Asia. In less than five years, Thailand's leading supermarket chain pared its list of vegetable suppliers from 250 down to just 10.
Smallholders face many obstacles to joining the ranks of preferred suppliers for supermarkets. Meeting standards for quality and reliability may require substantial investments in irrigation, greenhouses, trucks, cooling sheds and packing technology. Supermarket transaction costs may be significantly higher for negotiating and managing contracts with small producers.
Empowering small producers
Smallholders who have succeeded as suppliers for supermarkets have generally overcome these obstacles by forging cooperatives or enrolling in outgrower schemes. Often they have benefited initially from information, training and start-up funds provided by public and private sector development initiatives.
In Zambia, for example, a consortium of government and industry organizations helped forge a partnership that included government ministries, the country's largest supermarket chain, suppliers of farm inputs, and the poor farming community of Luangeni. The project enabled the farmers in Luangeni to begin supplying high-quality vegetables for Shoprite. Participating farmers reported both substantially higher incomes and improved nutrition.
A number of farmer cooperatives have broken into lucrative and dynamic niche markets by obtaining certification for their produce as “organic”, “fair trade” and “environmentally friendly”. Such products command a premium price and bring higher returns to farmers. For small producers, organic farming offers the added benefits of reduced dependence on purchased inputs like pesticides and fertilizer and increased use of low-cost labour.
The Del Cabo cooperative in Mexico, for example, has thrived by supplying organic cherry tomatoes to supermarkets in the United States. Since it was founded in the mid-1980s, the cooperative has grown to include 250 family farms, many of them smaller than 2 hectares. Average income in the cooperative has increased from US$3 000 to more than US$20 000.
Certified products generally command better market access in the industrialized countries. They may well enjoy similar advantages in local supermarkets as consumers become more demanding about food quality, safety and sustainability. But the certification process itself is costly and may present a major obstacle to small producers, who often lack access to the credit, information and training they would need to enter these niche markets.
As supermarkets expand their market from the wealthy elite in the cities out to middle and working class neighbourhoods and towns throughout the country, one Central American supermarket chain has estimated that only 17 percent of the population is beyond their reach. That 17 percent is characterized as the poorest, rural segment of the population. Smallholders who fail to gain a foothold in this globalized marketplace risk finding themselves consigned to a permanently marginalized minority, excluded from the food system both as producers and as consumers.
Rising incomes and falling levels of hunger and malnutrition have generally been associated with the rapid growth of cities in the developing world. But although the proportion of people who go hungry usually remains lower in cities, the numbers of poor and hungry city dwellers are climbing rapidly along with the total urban population.
A study by the International Food Policy Research Institute (IFPRI) analysed trends in urban poverty and malnutrition in 14 developing countries between 1985 and 1996. In a majority of these countries the number of underweight children living in urban areas is rising, and at a more rapid rate than in rural areas. In 11 of the 14 countries, the share of urban children among underweight preschoolers nationwide also increased (see graph).
More than 40 percent of all urban residents in developing countries live in slums. That means around 950 million people lack one or more of such basic services as access to sufficient living space, clean water and improved sanitation facilities. Many also lack access to adequate food, even though the urban poor in many developing countries spend 60 percent or more of their total expenditures on food. In India 36 percent of urban children are stunted and 38 percent are underweight.
Rrecent FAO study compared levels of stunting in urban and rural areas in Angola, the Central African Republic and Senegal. Although overall prevalence of stunting was higher in rural areas, the prevalence was essentially the same in urban and rural areas when economic status was considered (see graph).
Changing lifestyles, changing diets
rbanization and the globalization of food systems are redrawing not only the map but the profile of hunger and malnutrition in developing countries.
For the developing world as a whole, per capita consumption of vegetable oils and of animal source foods such as meat, dairy, eggs and fish doubled between 1961 and 2000. Where the pace of urban growth and rising incomes has accelerated, so have dietary changes. In China, the proportion of urban adults consuming high-fat diets, in which more than 30 percent of calories come from fat, shot up from 33 to 61 percent in just six years between 1991 and 1997.
Changes in the composition of diets and increased consumption of processed foods have been spurred by changing lifestyles and the rapid growth of fast food outlets and supermarket chains. In 1987, Kentucky Fried Chicken (KFC) opened the first foreign-owned fast food restaurant in Beijing. Fifteen years later, KFC boasts more than 600 stores in China and total fast food sales top US$24 billion a year.
The urban poor may not be able to afford fast food restaurants, but they do share in the lifestyle and dietary changes brought on by urbanization. In cities from Bangkok to Bamako, poor people often buy more than half their meals from street food vendors. A study in Accra, Ghana, found that the poorest city residents spend 40 percent of their food budget and 25 percent of their total expenditures on street foods (see graph).
Changing diets, mounting problems
As people consume more oils, meat and dairy products and less dietary fibre, more fast foods and fewer home-cooked meals, many developing countries now face a double challenge - widespread hunger on the one hand and rapid increases in diabetes, cardiovascular diseases and other diet-related non-communicable diseases on the other.
An estimated 84 million adults in developing countries suffer from diabetes today. By 2025 that number is expected to rise to 228 million, of whom 40 percent will live in the more populous countries of India and China (see graph). Levels of obesity, heart disease and other diet-related ailments are also rising rapidly, not only in cities but in rural areas, influenced by the economic and social changes that have fuelled the “nutrition transition”.
A growing body of evidence suggests that it is the poor who are most at risk not only of hunger and micronutrient deficiencies but of diabetes, obesity and hypertension. A recent study of nutrition trends and underlying causes in Latin America found that obesity rates are higher and rising faster among the poorest segments of the population. The study concluded that obesity and related chronic diseases are likely to increase in countries where maternal and child malnutrition coexists with urbanization and economic growth.
It has long been known that children born to undernourished mothers are likely to be underweight at birth and that both their physical and cognitive development may be impaired. Now, there is growing evidence that low birthweight and stunting in early childhood heighten the risks of growing up to develop diabetes, heart disease and other ailments commonly associated with too much food and too little physical activity.
This has become known as the “Barker hypothesis”, named after the author of a study showing that adults who had been underweight at birth suffered higher rates of death from heart disease and strokes. It has been suggested that this may be the result of “foetal programming”, in which the body adapts to nutritional deprivation in ways that help short-term survival but endanger long-term health. Although the hypothesis remains controversial, other studies have demonstrated similar correlations between low birthweight and higher prevalence of insulin resistance and type 2 diabetes (see graph).
Studies carried out in Mysore in south India confirmed that men and women who were underweight at birth had a higher risk of cardiovascular disease and insulin resistance. But it was the short, fat babies of heavier mothers who faced the greatest risk of developing diabetes. These findings suggest that India's looming epidemic of diabetes may be caused by a combination of widespread hunger and urbanization. According to this theory, many of these mothers were once low birthweight babies themselves and therefore predisposed to obesity and insulin resistance. When they move to cities, modify their diets and become less physically active, they are then more likely to become hyperglycaemic. Hyperglycaemia during pregnancy is known to be associated with giving birth to babies who are short, fat and at increased risk of diabetes as adults, just like the babies observed during the Mysore study.
Meeting the dual challenge of chronic hunger and increasing non-communicable diseases highlights the need for food and nutrition policies that target vulnerable groups among the urban and rural poor. Ensuring that children and women of childbearing age have access to adequate dietary energy and variety is essential to break the transmission of hunger and malnutrition from one generation to the next and from infancy through a lifetime of stunted opportunities.