Urbanization, Diet Change, and Transformation of the Downstream and Midstream of the Agrifood System: Effects on the Poor in Africa and Asia
Michigan State University
Abstract: In Africa and Asia, agrifood markets are important to the poor, and current rapid changes in these markets have implications for the poor. First, as a share of the national market, urban markets have gone from marginal some decades ago to dominant today. Thus the urban market is a main food product market the poor face as sellers. Second, the poor are exposed to the product market often as net buyers of products (both from local sources but also increasingly from urban sources of processed foods and fresh products re-“exported” from urban to rural markets). Third, the poor are also very exposed to labor markets as sellers of labor—both to the rural nonfarm and the urban labor markets. Fourth, the product market has transformed from mainly a grain market some decades ago to a market diversified beyond staples into fruits, vegetables, meat, fish, dairy, edible oils. There is a chance for the poor to gain from this shift toward higher-value non-staples as farmers, and as workers since the employment multipliers are high from non-grains. Fifth, agrifood markets are also transforming structurally. Supply chains are getting geographically longer with urbanization, and developing (with a proliferation of SMEs in the early stages) and consolidating (with the emergence of supermarkets and large processors in the more advanced stages). This may lower food costs for the urban poor and increase the scope and volume of the urban market for rural suppliers. In sum, urbanization, diet change, and food system transformation all offer opportunities for the poor as suppliers of labor and products and sellers of labor. But accessing these opportunities requires “threshold investments” in human, physical or locational assets by the poor to seize these opportunities. The requirements can be geographic (hence geographic poverty traps) and micro (skills, productive assets).
JEL: 012, 013, Q12, Q13.
Keywords: agrifood markets, food system, farm households, urbanization, poverty, rural suppliers.