SOFA 2017 - The State of Food and Agriculture

‘Leaving no one behind’
How investing in rural‑urban areas is key to ending hunger and poverty. #ZeroHunger

©Stef Hoffer | Shutterstock.com


PART 1

Leveraging food systems for inclusive rural transformation

Since the 1990s, rural transformations helped millions of people exit poverty while remaining in rural areas. This fact holds great promise for reinvigorating rural opportunities, both on- and off-farm, including job creation.

Uncovering the potential of small cities and towns and their connections with rural areas offers a unique opportunity to rural people, youth in particular, who often turn to migration in search of a better life. Meeting the sustainable goals of a zero hunger and poverty-free world depends crucially on progress in rural areas, which is where most of the poor and hungry live.

Fresh fruits and vegetables are displayed on sale at a fruit stall at a market. Poverty and hardships have been pushing people in rural communities to migrate. ©Alex Webb | Magnum Photos for FAO

In today’s world the challenge of achieving Zero Hunger is quite daunting as demographic pressures, increasing urbanization and climate change are transforming the world we live in. Our agricultural and food systems, which includes all the stages from growing to processing food, are evolving rapidly to counter these pressures. The change is already happening, even where we wouldn’t expect: small cities and rural areas.

Ashmita Thapa

Nepal

"We hope to learn more in coming days. If we learn more, it will not be necessary to go abroad"

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However, these rural transformations have not happened everywhere. Why not?

South Asia and sub-Saharan Africa have not seen the same growth as Latin America and East and Southeast Asia. Are the rural transformations of today leaving some behind?

It is surely not too late to change this course of action and ensure rural transformations are more inclusive. By tapping into the potential of food systems and recognising the roles of small cities and towns in integrated rural-urban planning, inclusive transformations are still possible and they will be crucial to eradicate poverty and hunger.


PART 2

New Transformations

Economic progress and transformations from agriculture to industry- and service-based economies have lifted millions of people out of poverty since the 1990s. During the last two decades, these transformations increased the number of people living above the moderate poverty line by more than 1.6 billion people. Of them, 750 million are rural people who continue to live in rural areas, underscoring an important fact: rural development has, and continues to be, key to ending hunger and poverty.

"Fulfilling the 2030 Agenda depends crucially on progress in rural areas, which is where most of the poor and hungry live"
José Graziano da Silva, FAO Director-General

However, rural transformations have not happened evenly. In most countries of sub-Saharan Africa and South Asia, a thorny combination of low productivity of subsistence farms, limited opportunities for industrialization and rapid population growth is thwarting structural transformations. Growth in the manufacturing and modern service sectors has not matched the pace of urbanization in sub-Saharan Africa. Poor rural Africans who relocate to cities run a greater risk of joining the ranks of the urban poor than of finding a pathway out of poverty. A similar dynamic is seen in South Asia, where the rural poor are more likely to escape poverty by remaining in rural areas than by moving to cities.

FIGURE 1

Changes in proportions of rural and urban poor, and non-poor, in total population of selected countries, by region, 1990s–2010s

DECADE
1990s
2000s
2010s
  • Non-poor in urban areas
  • Poor in urban areas
  • Poor in rural areas
  • Non-poor in rural areas

NOTES: Poverty level used is “moderate”, defined as living on less than US$3.10 a day (2011 PPP US$). The charts refer to the following countries, selected for data availability: East and Southeast Asia – Cambodia, China, Indonesia, Philippines, Thailand, Viet Nam; South Asia – Bangladesh, Nepal, India; Latin America and the Caribbean – Brazil, Colombia, Dominican Republic, Guatemala, Nicaragua, Peru; Sub- Saharan Africa – Burkina Faso, Côte d’Ivoire, Ethiopia, Mali, Malawi, Mozambique, Nigeria, Rwanda, South Africa, Uganda, United Republic of Tanzania, Zambia; Near East and North Africa – Iran (Islamic Republic of), Tajikistan, Tunisia, Turkey.
SOURCE: FAO calculations from World Bank and IFAD (2016).

Workers leaving agriculture and unable to find jobs in the local non-farm economy often turn to seasonal or permanent migration. After leaving their small plots and harvests in search of a better life, they move into often low-paying, informal jobs, usually in urban areas. Their lives are not expected to be significantly better because their coming resources in already over-burdened cities are even further stretched.

Mohamed Seid

Ethiopia

"We want to grow our horticulture business and be a model for other young people in our area"

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The challenge is especially critical as, between 2015 and 2030, the population in Africa and Asia is forecasted to increase from 5.6 billion to over 6.6 billion. In the same period, the number of young people aged 15-24 years is expected to grow by about 100 million to 1.3 billion worldwide. Providing decent employment to millions of young people entering the labour market is one of the challenges the world will have to face.

What can be done?

Industrial development trends in sub-Saharan Africa and South Asia have, in the past, been slower than other regions. However, these countries can still undergo sustainable rural transformations by leveraging food systems to meet the growing urban demand for food.

This growing demand can boost off-farm, agriculture-related activities (agri-industry) and provide new jobs for the youth in particular.


PART 3

Harnessing Food Systems

The growing demand coming from urban food markets will be a major force behind rural transformations. Meeting this demand will create new jobs in rural economies. However, this “golden opportunity” in it of itself is not guaranteed to advance all segments of society; not all small-scale farmers, for example, will be ready for the challenge. To ensure that this opportunity benefits the most vulnerable, it is crucial that policymakers and governments understand the socio-economic dynamics between cities, towns and rural areas and the different roles they play across the food system. Urbanization will be an important driver of change, but it cannot be seen as the sole solution to the challenges posed by poverty and food insecurity.

In order to be inclusive, rural transformation should focus on connecting cities and towns and their surrounding rural areas with the development of agro-industrial sector and infrastructure, including through public policies and investments.

FIGURE 2

Map illustrating the concept of the rural–urban spectrum

Investing in small cities and their infrastructure connects rural areas to one another and to larger cities.
  • City catchment area
  • Town catchment area
  • Rural market centre
  • Main Road
  • Road

SOURCE: FAO.

Urban and rural sectors are not distinct, but form a continuum from the capital and other major cities to larger regional centres, to smaller market towns and, finally, to rural spaces.

Thus, a territorial focus in rural development planning will be critical to strengthening the economic, social and political connections between small urban centres and their surrounding rural areas, creating opportunities beyond the farm. These territorial dimensions have become particularly relevant with the growing recognition that smaller cities and towns can play in deconcentrating urbanization and diversifying job opportunities.


PART 4

The potential of small cities and towns

In developing countries, almost 1.5 billion people live in small cities and towns with fewer than 500 000 inhabitants. In East Africa, small cities are rapidly diversifying their economies and forming strong ties to rural areas. Latin America and Asia have seen explosive growth in towns that are economically linked to both their surrounding rural areas and to the larger urban centres. Sixty percent of urban food demand comes from these small cities and towns.

FIGURE 3

Distribution of population along the rural–urban spectrum, globally and by region, 2000.

  • Larger cities, urban and peri-urban
  • Larger cities, proximate rural
  • Small cities and towns, urban and peri-urban
  • Small cities and towns, proximate rural
  • Rural hinterland

SOURCE: FAO calculations and elaboration.

Yet, policy makers and planners often ignore these small urban centres and resources are often disproportionately allocated to larger cities.

The reality is that rural and urban areas do not function as separate domains. Rather, from megacities to outlying rural areas, these domains act as a spectrum in which all areas are ultimately connected to one another. In sub-Saharan Africa, small cities and towns are important reference points for rural households because these are the places where they buy inputs, send their children to school and access medical care and other services.

It is within this thick socio-economic fabric that food markets are growing today and, along with them, so are rural-urban food chains.

In addition to increasing demand for food, people with higher incomes in urban areas are also creating a shift in dietary patterns

In addition to increasing demand for food, people with higher incomes in urban areas are also creating a shift in dietary patterns. Diets are moving away from traditional staple crops towards higher-value products, like dairy, fish, fruits, vegetables and animal-proteins, as well as more processed food.

The urban demand for more food, and for processed food, could be leveraged to create new economic opportunities for producers and agribusinesses within the rural-urban spectrum, boosting small farm productivity and revenue and creating off-farm employment.

FIGURE 4

Correlation between consumption of staple foods and GDP per capita in selected countries in developing regions, 2010

NOTE: Staple foods include cereals, roots and tubers.
SOURCES: FAO (2017c) and World Bank (2016a).

By expanding the food system’s off-farm opportunities, for example trading, processing, packaging, distribution and storage, small cities and towns can become the hubs of a growing non-farm rural economy. This expansion, in turn, helps rural areas become incubators of small-scale, off-farm enterprises.

In all regions rural areas are just as important a contributor to lifting people out of poverty as urban areas are

This would especially benefit the rural people wishing to leave agriculture and would kick off a new inclusive transformation that links rural areas with the smaller urban centres that service them.

Fostering rural–urban linkages through appropriate territorial strategies can create both a favourable business environment for farmers and help diversify rural economies through non-farm income opportunities, which are vital for building prosperous and sustainable rural communities.


PART 5

Supportive Policies

Empowering smallholder farmers

Though these new opportunities hold great potential, if rural development only focuses on changing food systems and growing food demand, the transformations will happen at the expense of smallholder farmers and producers. This increased demand could instead motivate large commercial farms and value chains dominated by large processors and retailers to take advantage of these potentially profitable markets. Some 85 percent of the world’s farmers, usually owning less than 2 hectares, would have difficulty competing as they do not have the same technical capacities or access to resources, such as new technologies. This steep international market competition would ultimately lead to the exclusion of smallholder farmers.

A small scale farmer preparing trench excavation and fertilization on the 300-acre grape production project ©FAO/IFAD/WFP/Eliza Deacon

Without farmers, herders, fishers and forest communities, there is no food system. Small-scale producers should be empowered to fully participate in meeting the food demand coming from urban areas. Thus, the centrepiece of any strategy for rural development is creating the enabling conditions that provide farmers, agri-food workers and their households the skills and technologies they need to compete in the market and achieve adequate incomes and decent living conditions. Policy makers should enforce better access to credit, markets, mechanization and technology, in addition to strengthen land tenure rights and equity in supply contracts. These conditions will allow small producers to harness urban demand as an engine for transformative and equitable growth. Policy-makers should also help farmers overcome other barriers such as quality standards, traceability requirements and certification.

In general, there needs to be greater emphasis on supporting small and medium- sized food enterprises by building capacity and skill sets, strengthening cooperatives and farmer organizations and promoting access to modern technologies to enable them to reach scale and improve competitiveness.

Unit of production of tomato powder. Youth mobility, food security and rural poverty reduction: Fostering rural diversification through enhanced youth employment and better labour mobility. ©Nikos Economopoulos/Magnum Photo for FAO

Social protection complements all of the above-mentioned interventions by smoothing transitions. Social protection programmes help the poor to access highly productive employment by increasing access to financial resources and allowing low-income people to take risks – for example, by adopting new production methods or starting a small business. Constraints, such as a lack of liquidity, credit or insurance, may hinder low-income people’s efforts to increase productivity in agriculture or in other sectors. Social protection can address income inequality and promote more equitable and sustainable growth. Rather than simply focus on the limitations of informal services, policymakers should also recognize the potential of this active informal sector and facilitate the inclusion of these services under formal contracts.

The growth of rural non-farm activities is an opportunity for poor rural households only if they have, or can acquire, the skills needed to take advantage of these opportunities.

Strengthened Connections

In addition to supportive and inclusive policies, rural transformations will require developing an active agro-industry and the needed infrastructure to connect rural areas and urban markets. In the coming years, many small-scale farmers are likely to leave agriculture, and most will be unable to find decent employment in largely low-producing rural economies. A dynamic agro-industrial sector and growth of services in rural areas would create jobs in local economies, especially for women and youth, improving incomes and supporting overall gains in nutrition, health and food security.

Agro-industry is already an important sector in many agriculture-based economies. In sub-Saharan Africa, food and beverage processing represents between 30 percent and 50 percent of total manufacturing value added in most countries, and in some more than 80 percent. However, the growth of agro-industry is often held back by the lack of essential infrastructure – from rural roads and electrical power grids to storage and refrigerated transportation. In many low-income countries, such constraints are exacerbated by a lack of public- and private sector investment.

The lack of infrastructure presents a major impediment for farmers to take advantage of urban demand for fresh fruit, vegetables, meat and dairy. These higher value nutritional products require storage facilities, refrigerated transportation systems and other infrastructure that many developing countries lack. Better infrastructure would not only help rural development, but would reduce urban centres reliance on imports and would improve general access to nutritious foods.

Different rural development

Finally, successful transformations require rural development planning that focuses on integrating territories and strengthens the physical, economic, social and political connections between small urban centres and their surrounding rural areas.

Creating agro-corridors, in which production areas and small urban hubs are connected by lines of transportation such as highways, railways, ports or canals, and agroclusters, which link food producers, processors and institutions together in networks, represent only some examples of agro-territorial tools that can improve the success of rural transformations.

Zarzis, Tunisia. Fishermen in the port of Zarzis. ©Nikos Economopoulos | Magnum Photos for FAO

Truck passing by on a green agricultural field. | Shutterstock.com

Small cities and towns have helped reduce poverty in rural areas in an inclusive and lasting way. Recognising their importance in rural economic development is prompting renewed interest in a territorial development approach that recognizes the diversity of development potentials and performances of geographic areas at the subnational level.


PART 6

Take-aways

In an era of fast urbanization, people who remain in rural areas could still exit poverty through inclusive transformations.

Rural areas and small cities and towns hold the key to inclusive transformations. This is an important message for policy makers. Strengthened rural-urban continuums provide smallholder farmers and rural people with greater opportunities to share in the benefits of economic growth and this inclusive economic development is a powerful force for change.

Prosperous rural economies provide alternatives to rural people who see migration as their only chance of escaping poverty and hunger. It gives them other choices. Attaining a zero hunger and poverty-free world will depend on how rural areas develop in the coming years and how we support this paradigm shift in both thought and resources.