Food system transformation requires simultaneous changes in the consumption, production, markets, policies and governance. The main challenge is to reduce the triple burden of malnutrition, where more than 840 million people are directly affected by hunger and undernutrition, another 2 billion people suffer from hidden hunger due to micronutrient deficiencies, and 3 billion poor people struggle with overweight and obesity. These problems are intrinsically related to each other and for reaching SDG2 (zero hunger by 2030) we need to accelerate efforts.
In the preparations for the UN Food Systems Summits (UNFSS), the International Fund for Agricultural Development (IFAD) launched its Rural Development Report 2021 with a focus on Transforming Food Systems for Rural Prosperity. The report marks a paradigm shift in our thinking on agriculture and food that starts with a new understanding of the interactions between rural employment, diets and health.
Reverse thinking: from consumption to production
Whereas in the past much attention has been devoted to incentives and investment for the adoption of new technologies for improving agricultural yields, attention is now shifting to strategies for the creation of purchasing power that guarantee poor people’s access to affordable and healthier diets. Poor people are hungry not because there is no food, but mainly because they have no resources to purchase food. This is particularly the case for marginal neighbourhoods in urban areas, but even in rural areas most smallholder farmers are net consumers of food (i.e. the buy more food than they sell). And most of the commercial food production is dominated by mid-size farmers. Therefore, key policy areas to emphasise are the creation of remunerative employment supplemented by targeted social safety nets and cash transfers.
Intensification and diversification: towards more nutrient-dense foods
Most efforts and resources for innovation in agricultural production have been devoted in the past to the mono-cropping of a few calorie-rich basic staple foods (maize, rice, wheat) and large areas of land devoted to export commodities (coffee, tea, cocoa, palm oil, etc.). This has lead to poor diets with a low dietary diversity. Food system transformation looks for opportunities for farmer engagement in the production of a diverse range of nutrient-dense foods for growing (peri-) urban populations. More circular food production is also based on the re-use of residues and the reduction of post-harvest losses. Substantial investment should be made in small-scale production of fresh fruits and vegetables, animal-based foods (fish, poultry, etc) and innovative foods (insects, seaweed, etc) that are critically needed to enrich the diets of the poor.
Social networks: empowerment and employment
Food systems are strongly grounded in social relationships, both with the household as well as in the local society. There is ample proof that support for women’s empowerment and gender equality leads to better access to resources and higher dietary diversity. Programs that focus on women’s empowerment show highest reductions in child stunting and wasting. Moreover, better nutrition for children and particularly for adolescent girls strengthens their health status. People that have access to more balanced diets suffer fewer health problems and therefore also maintain a higher labour productivity and have more opportunities to reach the living wage. An investment of 1 US$ in better diets leads to a lifetime saving of US$16 in health costs.
Midstream linkages: rural networks for non-farm income
While a decreasing share of the (rural) population is involved in direct agricultural production, opportunities for non-farm employment in midstream activities are strongly increasing. Young people prefer to work in agricultural services (machine hiring, ICT operations), in banking and input dealer shops, or in transport, storage and processing of agricultural commodities that are labelled as the hidden middle. In many agricultural and food supply chains, more than 70-80% of the value added is created in these segments. A large part of these activities still belong to the informal sector and offer opportunities for female entrepreneurship. Instead of top-down regulation, attention should be given bottom-up relationships with these trade networks to guarantee compliance with food safety rules.
Trade and governance: responsive institutions and effective policies
The competitiveness of national food systems can be strongly improved by a better management of international trade and foreign investments in the agri-food sector, as well as by strengthening domestic governance of food value chains. Imports of cheap processed foods can be curtailed by selective trade policies, whereas local consumption of unhealthy foods can be constrained by imposing fat or sugar taxes. This has proven to be particularly successful in Chile and Mexico. Otherwise, obligatory black warning labels and marketing restrictions on products with excess of sugar, salt or fat can be imposed to guide consumers’ food choice. These labels seem to be more successful in generating consumer response than fair trade or ecological labels. Moreover, regulations that influence the landscape of food outlets (i.e. permits for supermarkets) are helpful to avoid food deserts around poor neighbourhoods.
No one size fits all
Opportunities for food system transformation are widely different in countries in line with their potential for improving agricultural productivity (rural transformation) and the opportunities for employment outside agriculture (structural transformation). The household income share needed for satisfying food security gradually decreases in countries that are more advanced in their rural and structural transformation. There are considerably more margins for food system upgrading towards guaranteeing healthy, affordable, safe, and sustainable diets in countries that have also invested in non-agricultural growth. The growing diversity of manufacturing and services activities offers an outlet for superfluous rural labour and at the same time the non-agricultural incomes creates the necessary purchasing power for improving diets.
These changes ask for significant public investments for improving the market infrastructure and governance networks (land rights, legal guarantees for informal trade) combined with substantial private investments for farm-level intensification and supply chain integration. Food systems are homed by different ministries (finance, agriculture, health, environment, social affairs) and their transformation requires active involvement of many stakeholders and agencies. Activities by single actors are certainly important, but the acceleration of efforts at scale is required to reach SDG2.