Transforming food systems for rural prosperity

Rural Development Report 2021

This report calls for a revolutionary transformation of the world’s food systems.

Why?


Today’s food systems have failed to make nutritious diets accessible or affordable to the poor and in a sustainable way. In consequence, at least three billion suffer undernourishment, nutrition deficiencies, or have become overweight.

Why is that?


Over the past 70 years the global food system has become less efficient at its primary objective - delivering nutritious food sustainably. A focus on producing high-calorie grains has pushed up yields and cut prices of staple foods. The cost? Food waste, malnutrition and obesity, and environmental degradation.

What should we do?


We need to transform the world’s food systems so that they deliver adequate, nutritious diets for all. They must be reshaped to provide decent livelihoods for all who grow, process, store and market our food. They must become fair, inclusive…and sustainable.

How can we do that?


This report analyses the problems, and provides the solutions. We need to put small-scale farmers and the midstream of firms that supply them with inputs and services, and handle the trading, storing, processing and distribution of food to consumers, at the centre of this transformation.

There is a better way.

Here is what we need to do…

Delivering healthier diets for poor people


Today’s food systems have failed to make nutritious diets accessible or affordable to the poor. In consequence, at least three billion suffer undernourishment, nutrition deficiencies, or have become overweight.

Many poor people in rural areas do not have access to enough nutritious food. In Ethiopia, farmer Temesgen Chanie could not provide enough healthy food for his family. Now a new water canal in his village provides a reliable source of water for more than two hundred farming families in the local area allowing them to grow a wider variety of crops all year round and greatly improving their diets.

What should we do?

We must improve access to more wholesome and diverse food and where necessary convince consumers to make better dietary choices.

We need to use market mechanisms because food systems and food supply respond to demand. To increase demand for healthier foods, which can be produced sustainably, we need to ensure consumers have the means and desire to procure wholesome food.

Healthy diets include adequate amounts of fruits and vegetables, whole grains, legumes and nuts. They also provide enough starchy staples and milk, eggs, poultry and fish.

But today’s food systems are based on just three crops - rice, maize and wheat – that provide 60 per cent of energy intake.

To increase demand for healthier foods, which can be produced sustainably, we need to ensure consumers have the means and desire to procure wholesome food.

Small farms, which typically produce more diverse crops than big farms, can play a vital role in supply more varied diets.

To boost demand for a healthy diet, we must ensure poor people have the necessary buying power, but also awareness and information. This can be achieved through higher incomes, but also social safety nets and cash transfers that increase their purchasing power.

Public regulation and investment can also be used to steer markets and nudge consumers to eat better. Today’s subsidies on staples contribute to unbalanced diets. Governments can use tariffs, taxes, subsidies and public procurement to shape food systems. They can also invest in information, education (including promoting dietary guidelines) and behavioural nudging.

Animal sourced foods have a vital place in circular production systems


Eating reasonable amounts of fish, meat, eggs and dairy products has health and nutrition benefits. Though over-intensive farming competes for food with humans and can damage the environment, animal husbandry can be a good use of resources and can raise farm incomes.

In many parts of the world, animals mean more to rural people than just food. They are also integral to livelihoods. In Pakistan, Mansab and her family were able to purchase goats as part of an IFAD-funded project, which have given them a regular source of income, improved diet, and a safety net.

Consuming animal-sourced products is important for health and nutrition, particularly for young children.

As incomes grow and rising populations concentrate in cities, consumption of fish, meat, eggs and dairy products surges.

In much of Asia and Africa, consumption per person is still far below recommended levels. Yet eating too much animal produce can cause illness and burden healthcare systems.

As incomes grow and rising populations concentrate in cities, consumption of fish, meat, eggs and dairy products surges.

Mass production systems, particularly for pigs, poultry and cattle, often rely upon purchased inputs that compete for land and water with human food crops, whilst polluting land and water and emitting greenhouse gases. Yet small-scale animal farming is generally circular, fertilising land and making efficient use of scarce resources – with little threat to the environment.

Consuming animal-sourced products is important for health and nutrition, particularly for young children.

Backyard pigs and poultry, fed on kitchen and crop waste, are an essential part of many rural livelihoods, especially for women. Animals generate revenue, pull ploughs and carts, act as a store of food and wealth, provide insurance, and signify status. Grazing often takes place on land unsuitable for cultivation, and forms part of a rich cultural tradition.

Meantime fish and novel protein sources such as insects, promise to be very helpful in developing more circular food systems.

The crucial role of small-scale farmers in transformed food systems


Over the past 70 years the global food system has become less efficient at its primary objective - delivering nutritious food sustainably. A focus on producing high-calorie grains has pushed up yields and cut prices of staple foods.

The cost? Food waste, malnutrition and obesity, and environmental degradation. We need fresh thinking.

Most of the world’s poor live in rural areas. For them agriculture is a major source of employment and income, as well as food. Three billion people live on the estimated 500 million small scale farms in Low- and Middle-Income Countries, producing much of the food consumed in these countries.

Smallholder farming is labour intensive and often very efficient: small scale farmers produce 30-34 per cent of global food supply on just 24 per cent of global cropland.

Though the vast majority of farms cover less than 1 hectare their cultivation enables owners, who are often also wage-labourers, to enhance their nutrition, income, and food security in economies that often lack social security systems. 

As incomes rise, so does demand for the fresh foods that small farms produce.

We need small farms to:

  • Boost their profitability and production using more intensive, knowledge-based, circular, and sustainable techniques resistant to climate change
  • Develop farm services and food processing, transport and marketing
  • Integrate farmers – especially women and youth into efficient value chains, reward them for providing ecosystem services, and help them overcome constrained access to land, water rights, finance, information, and new technologies

Wasting less and recycling more: the path to a more circular food system


Much can be done to make agri-food systems more circular, from spreading manure and recycling by-products to reducing waste by packaging food in bio-plastics and using biofuels in farm vehicles.

Adopting circular principles will make food systems more sustainable and more efficient. They can help increase yields and food production and add value in agri-food chains. We should minimise the use of finite resources such as land and phosphate rock, and maximise use of regenerative resources such as wind and solar energy.

We need to help farmers and others throughout the food system recycle nutrients, such as inedible organic material from crops.

We should minimise the use of finite resources such as land and phosphate rock, and maximise use of regenerative resources such as wind and solar energy.

On small farms, animals have long been used to graze uncultivated land and turn crop waste into food and manure. Muck-spreading helps restore soil fertility and organic matter.

Wider use of traditional small farm techniques will reduce costs and make production systems more resilient and diverse, and the use of energy and water more efficient energy.

Up to a third of food produced is lost between farm and fork or thrown away uneaten.

We can cut food losses by improving processing, refrigeration, storage, and packaging.

Looking after food more effectively improves quality and reduces harm to people and the environment.

Household waste and human excreta could become important sources of nutrients and energy. Communities need to come together to organise their recovery and treatment.

New technologies, from cultivating seaweed to use of bio-based feedstocks, are opening paths to a more bio-based economy.

Using public policies to improve food systems and food security


Trade and markets can enhance food security, but governments need to ensure full and fair competition and sound regulation, and discourage trade in food produced at unacceptable cost to people and the environment.

Since 2000, food imports to the least developed countries have soared more than five-fold to US$50 billion. Trade drives down prices for consumers – but also revenues for producers, causing an overall rise in hunger.

Badly managed, it can contribute to unhealthy diets and leave populations vulnerable to international food price spikes and balance of payments crises.

Countries that export commodities such as coffee, cocoa, tea, palm oil and rice need to diversify their farm production to insulate against commodity price falls, which can cause their currency and government revenues to fall, leaving citizens unable to buy enough food. They also need to develop mid-stream processing SMEs to build expertise, capture more value, and create jobs. 

They also need to make it easier to trade food between neighboring countries. Subsidising farmers to protect the environment or innovate can help them be competitive – without breaching World Trade Organisation rules.

Investing in food safety and quality systems benefits producers and consumers. Helping small producers achieve quality standards and improving transport infrastructure can help them reach both domestic and international markets.

Subsidising farmers to protect the environment or innovate can help them be competitive – without breaching World Trade Organisation rules.

Certification schemes can also help social and environmental protection, rewarding producers with good labour practices who look after the environment, whilst aiding small-scale producers to organise can increase their bargaining power. 

Developing SMEs is central to food system overhaul


Developing the small and medium enterprises that supply farmers with inputs, buy and process their produce, and supply it to consumers can improve farmer revenues, add value, and create jobs.

 Connecting farmers and producers to small and medium size enterprises is an essential ingredient to making food systems work.Gladys Ndagile has been a poultry farmer for many years, but it was only when she connected with a local Ugandan egg processing business that she finally made a profit from her eggs.

A study of 13 countries in Asia, Africa and Latin America found that food system small and medium enterprises (SMEs) account for 25 per cent of rural employment, and 21 per cent of jobs in cities. These firms often employ a relatively high proportion of women and youths.

Many low and middle-income countries are experiencing food system transformations as local supply takes up the challenge of feeding the countries’ fast-growing cities.

The development of so-called midstream SMEs that provide services to farms and connect the farm to the consumer across the food system is a strong feature of this transformation.

Many low and middle-income countries are experiencing food system transformations as local supply takes up the challenge of feeding the countries’ fast-growing cities.

Provided farmers have sufficient bargaining power, these midstream SMEs, by channeling demand from consumers to farmers, can improve farm incomes. Trading in anything from mangoes and milk, to fish, chicken and vegetables, they also improve the quality and diversity of food supplied to rural and urban consumers. Wholesalers often invest in dry storage and cold chain distribution centres, preserving food quality, reducing food loss, and enhancing food safety. 

SMEs also create jobs, including for women and youths, especially those that process foods such as fermented products; and sell prepared meals. To grow faster, they need easier access to finance, better transport infrastructure. It is important to ensure decent and inclusive job conditions.

Food processing creates jobs and adds value, but brings dietary risks


Local food processing should be encouraged, but products should be nutritious, and consumption of ultra-processed foods discouraged.

Food systems are providing more and more processed foods. This can improve quality and availability, but brings health risks, because ultra-processed foods, in particular, tend to be high in energy, fat, sugar and salt.

Some forms of food processing, such as transforming wheat into pasta, prolong shelf life and provide convenience. Development of ultra-processed foods can help diversify food consumption – or encourage unhealthy dietary choices. Sugar filled sodas, meantime, have been linked to the epidemic of obesity.

In sub-Saharan Africa food processing provides 30 per cent of manufacturing employment. Milling and canning are often carried out close to where food is grown, or fish landed, providing employment. Local processing can substantially increase the value of food commodity exports such as coffee and cocoa. 

Some food processing has low entry costs, such as the preparation of highly nutritious fermented foods, so provides opportunities for entrepreneurship, especially for women and youths.

Education and food labelling are vital to help consumers make healthy choices.

In Brazil, Chile and Mexico ultra-processed foods, from baked goods and pizza to frozen food and sodas provide about 30 per cent of daily calories: in the US that has reached 60 per cent. 

Regulations are needed to limit the display of ultra-processed foods, restrict ingredients and manufacturing techniques, and limit portion sizes. The industry must act responsibly. Governments may have to tax unhealthy products, such as sodas, and restrict use of unsustainable packaging materials.

Education and food labelling are vital to help consumers make healthy choices.

Read the full report

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