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By Sara Gustafson

This post originally appeared on FoodSecurityPortal.org

 Photo credit: ILRI

Introduction

Increasing urbanization plays a major role in shifting patterns of food supply and demand and thus in transforming food systems. These transformations carry significant implications for the livelihoods of rural populations, presenting both challenges and opportunities. A new paper published in Food Security examines some of these impacts in Africa south of the Sahara (SSA) and South Asia, as well as the enabling environments needed to help rural communities benefit from the changes.

Rapid urban population growth over the next three decades in SSA and South Asia

Both SSA and South Asia are expected to experience rapid urban population growth over the next three decades, according to the study. The urban population of SSA is forecast to reach 840 million in 2050, while South Asia is forecast to see its urban population grow to 1.2 billion in the same timeframe. In both regions, while most of this growth is expected to occur in large cities, peri-urban areas (i.e., small and medium-sized cities and neighborhoods on the outskirts of large city centers) are also on the rise. This distinction is important, the study emphasizes, because smaller urban areas are tied to rural economies in different ways than large cities. They often depend more heavily on the agricultural sector, for example, and be more closely tied to local food value chains.

Four main channels through which urbanization can impact rural livelihoods

The paper identifies four main channels through which urbanization can impact rural livelihoods. As stated above, the extent to which these channels are in play varies depending on the size and geographic location of a particular urban area.

  • Overall growth in urban food demand. Overall demand for food could rise as much as 2.5 times and 1.7 times its current levels in SSA and South Asia, respectively, by 2050. In both regions, urban food demand is expected to grow by two to four times more than rural food demand between now and 2050.
  • Urban population’s purchasing power and food preferences. On average, urban households are better able to afford food than rural households. While urban populations in much of SSA struggle more with poverty and income inequality than their urban peers in South Asia, in general, their purchasing power and subsequent food security tend to be higher than rural populations. With this burgeoning urban demand and increased purchasing power will come shifts in consumer preferences. This includes shifts toward greater consumption of meat, dairy, vegetables and fruits, and processed foods – all higher value products that can increase incomes for rural producers.
  • Complexity of food value chains and shifts in market linkages. In addition to opening the door to the production of higher-value crops, growing demand for more diverse foods and more processed foods provides opportunities for rural and peri-urban populations to diversify their incomes by engaging in more formal agricultural food value chains as processors and traders as well as producers. Employment in these off-farm sectors is increasing faster than on-farm employment in SSA. In addition, the paper highlights that households more closely linked to urban markets often receive greater returns on their products due to having lower transaction costs and better access to and information about these growing markets. However, formal value chains often benefit larger producers more than smallholders, potentially pushing smaller producers out of profitable sectors and increasing poverty in rural areas.
  • Direct and indirect land use changes. As urban populations grow, agricultural land surrounding cities is converted to living space. This expansion of urban land impacts food production and the livelihoods of rural producers. In South Asia, between 1992 and 2015, 75 percent of urban expansion impacted surrounding cropland; this number was less than 40 percent in SSA. The paper projects that between 2000 and 2030, Asia as a whole will lose about 3 percent of its agricultural land to urban expansion, leading to a 6 percent loss in food production. In SSA, a similar 3 percent reduction in cropland will lead to a 9 percent reduction in food production. In addition to directly impacting agricultural production, these shifts in land use will also result in more rural people seeking off-farm employment.

Various enabling factors

The paper also identifies the various enabling factors – social, physical, geographic, economic, and institutional conditions – that help determine whether rural populations will be able to reap the opportunities and avoid the dangers presented by the foregoing channels. These include migration and remittance flows, communication and transport infrastructure, urbanization patterns (growth of small cities and peri-urban areas instead of large cities), trade policies and financial incentives, and stable government services.

A multi-sectoral approach on both the local and the global scale

Ensuring the proper combination of enabling factors to help rural populations, particularly smallholders, take advantage of the opportunities presented by urbanization will require a multi-sectoral approach on both the local and the global scale. Globally, this means focusing on establishing and upholding fair trade agreements and increasing investments in capacity building in developing countries. At the national level, policymakers should work to integrate food and agriculture policies and invest in improving communication and transportation infrastructure linking rural and urban areas. Local governments should focus on ensuring that government services are accessible and inclusive, particularly for smallholders, and on increasing rural populations’ access to markets and agricultural inputs.

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By Sara Gustafson

 Photo credit: Malcolm Dickson

Introduction

The CGIAR COVID-19 Hub has released updated policy notes regarding the impact of the COVID-19 pandemic on global and regional food systems. This latest series of updates covers several FSP priority countries, including Ethiopia, Nigeria, Malawi, and Bangladesh.

Ethiopia's situation

In Ethiopia, the pandemic has resulted in declines in overall GDP and in GDP of the agrifood sector.  The majority of these declines stemmed from reductions in trade and remittances. Total GDP fell by between 6.1 and 7.7 percent, with the agrifood sector accounting for 14.9 percent of those total losses. Ethiopia’s poor population has risen by 8.5 percentage points since the onset of the pandemic, which severely restricted the livelihoods and incomes of poor urban households in particular. Despite these declines, overall the country’s food value chains have proven to be resilient to the shock presented by the pandemic. The report also highlighted that earlier investments in irrigation have provided important access to water for vegetable production and household sanitation.

Significant challenges to agricultural production in Malawi

COVID-19 posed significant challenges to agricultural production in Malawi, exacerbating existing climate stresses. Access to agricultural inputs and output supply chains has been disrupted; at the same time, transport costs have risen, and market prices have faced volatility. All of these factors have reduced farmers’ incomes, as well as the GDP of Malawi’s agrifood system. The pandemic has had an even greater impact on urban households, which have experienced some of the highest income losses. Research into the impact of the pandemic on Malawi’s food value chains remains ongoing.

Nigeria's challenges

Nigeria has also faced doubled challenges in the form of the COVID-19 pandemic and a weakened economy. During the course of the pandemic, both total GDP and agrifood system GDP declined as a result of lost income and disrupted supply chains. The agrifood system accounted for 14.7 percent of Nigeria’s national GDP loss. Household purchasing power has also declined as incomes have been impacted by economic recession and high inflation rates.

CGIAR researchers continue to work with the Nigerian government to assess the impacts of the pandemic and associated policy responses and to identify priority policies to aid in national and household-level economic recovery.

Economic fallout in Bangladesh

In Bangladesh, the economic fallout from the COVID-19 pandemic has been severe. As in other countries, reductions in income and disruptions to supply chains have led to declines in total GDP and agrifood system GDP. The losses in the agrifood system GDP account for around 41 percent of national GDP losses. Rice prices within Bangladesh increased 35 percent during the pandemic; in addition, the 2021 harvest period and replanting period have been hampered by floods, which could further drive up prices. The dairy, poultry sectors, and aquaculture sectors were all hit with substantial losses due to lockdown measures, with producers facing significant loss of income. Poverty in Bangladesh reached 30 percent of the total population – an estimated 7 percentage points higher than would have been estimated in the absence of COVID-19. Government policies, including subsidies, have attempted to bolster the agrifood sector to support recovery and strengthen value chains.

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By Sara Gustafson

This blog is originally posted in the ssa.foodsecurityportal.org. 

 Photo credit: World Bank

Introduction

As the world continues to grapple with the ongoing presence of COVID-19, it has become clear that the pandemic’s impacts extend far beyond human health. Economic growth, markets and supply chains, poverty, and food security have all experienced ripple effects from the pandemic itself and the measures taken to stop the spread of the deadly virus. In Africa, the outbreak of COVID-19 coincided with the signing of the African Continental Free Trade Area (AfCFTA), leading to concerns about the potential negative impacts on free trade targets in the region.

A forthcoming book chapter, “The COVID-19 Pandemic and African Continental Free Trade Area (AfCFTA): Exploring Potential Impacts and Developmental Implications” (published in Global Market and Global Trade [Working Title]), examines these impacts and discusses how the AfCFTA and similar trade agreements could be used to mitigate the negative economic fallout of COVID-19 and similar shocks in the future.

The African Continental Free Trade Area (AfCFTA)

The AfCFTA was launched by the African Union (AU) to address persistent low levels of intra-regional trade on the continent. In 2014, trade among African countries accounted for 16% of the continent’s overall trade activity, despite the existence of numerous bilateral intra-African trade agreements. Research has linked intra-regional trade to reduced poverty, improved food security, and strengthened economic growth, and so improving these low numbers could have significant effects on important development outcomes in Africa.

The AfCFTA’s target is to increase boost intra-regional trade by 60% by 2022. The agreement aims to achieve this ambitious goal by creating a single African continental market for goods and services that allows free movement of people (for business purposes) and investments. In addition to expected reductions in poverty and food insecurity, a secondary hoped-for outcome of the agreement is the improvement of Africa’s trading position in the global market. Some of the AfCFTA’s most important stated objectives include: the elimination of tariffs and non-tariff barriers to trade; cooperation on investments, intellectual property rights, and customs matters; and the establishment of a mechanism to settle disputes among member states.

To date, 34 of the 55 AU member states have signed and ratified the agreement, making the AfCFTA the largest free trade area in the world. The agreement has the potential to lift 30 million Africans out of poverty and bring approximately USD 16.1 billion in welfare gains to the region.

The COVID-19 Pandemic and African Continental Free Trade Area

The chapter reports that in the first quarter of 2020, before the outbreak of COVID-19 in Africa, there were signs that intra-regional trade was beginning to intensify as the framework of the AfCFTA took shape. However, the pandemic has already had some direct effects on the agreement itself and on trade activity within the region. COVID-19-related travel bans and border closures postponed negotiations on several key aspects of the AfCFTA, causing a six-month delay in the implementation of the agreement.

As in many other places around the world, COVID-19 and the associated policy measures adopted to help stop the spread of the virus disrupted supply chains in Africa. Inputs for agriculture, manufacturing, and other industrial uses became more difficult to import, causing production delays and shortages. At the same time, production was further slowed as many employers like factories and mines closed as part of social distancing and lockdown efforts.

Travel bans and lockdown measures around the world also led to declining demand for oil, both globally and within Africa. This has had a significant detrimental impact on oil-producing countries in the region (e.g., Angola, Nigeria, and the Democratic Republic of the Congo).

Demand has slowed for African non-oil goods as well. Overall consumption throughout the region slowed in 2020 as a result of the pandemic. The chapter reports a 17.3% decline in African household expenditures from the previous year. Together, declining production and slowing demand for both oil and non-oil exports are expected to impact trade, employment, incomes, and well-being in the region for at least the next two years.

Despite these negative impacts, however, the chapter also highlights how the COVID-19 pandemic has presented the opportunity for AfCFTA and similar free trade agreements to capitalize on new products, markets, and trade frameworks. These could ultimately help mitigate the potential longer term negative impacts of the pandemic, stimulate future economic growth, and increase resilience against future shocks.

For example, the chapter argues that travel restrictions could encourage more local and regional production and reduce dependence on imports from overseas. By supporting African countries in ramping up production of goods that are currently often imported from Europe or Asia, AfCFTA can help create employment on the continent while also guarding against future supply chain disruptions.

Similarly, intra-African trade can play an important role in reducing food insecurity – both chronic and that induced by COVID-19 – in the region. Many African countries are net food exporters; however, the region also has many areas suffering from food deficits. By improving regional transportation networks, the AfCFTA can help strengthen regional food value chains. With stronger value chains, food-exporting countries can more easily export food within the region to areas in need.

Potential Impacts and Developmental Implications

The AfCFTA was also launched at the right time to leverage technological advances and improvements in connectivity across the region, the chapter argues. While other sectors have suffered from pandemic-induced supply chain disruptions, the telecommunications sector in Africa has experienced some growth. By focusing on new and emerging sectors and products, the AfCFTA could help generate employment and income opportunities that are more protected from economic shocks.

While COVID-19 has presented, and continues to present, significant challenges for populations and economies throughout Africa and the rest of the world, it also presents opportunities. The AfCFTA presents one channel through which policymakers and other value chain actors can strengthen the region’s ties, break down barriers hampering growth, and invest in vital institutions and infrastructure. By doing so, trade in the region will become more sustainable and resilient.

Value Chain Development and the Poor: Promise, delivery, and opportunities for impact at scale

Since the early 2000s, value chain development (VCD) has figured prominently on the agendas of donors, governments, and NGOs in pursuit of market-based options to poverty reduction, food security, gender equity, and other goals. Researchers have shown interest in value chains as a theoretical construct for studying interactions between farmers and markets, while practitioners have focused their attention on approaches and tools for applying VCD in the field.

Impacts of the COVID-19 crisis on vegetable value chains in Ethiopia
The COVID-19 pandemic is beginning to disrupt food value chains in Ethiopia and elsewhere, impacting the livelihoods of farmers and the diets of rural and urban households. These effects are likely to hit the poorest and most vulnerable farmers and consumers the hardest, but they are not yet well understood. More evidence is needed to guide the government and other organizations in devising responses.
Empowerment in agricultural value chains: Mixed methods evidence from the Philippines

Women's participation and empowerment in value chains are goals of many development organizations, but there has been limited systematic, rigorous research to track these goals between and within value chains (VCs). We adapt the survey-based project-level Women's Empowerment in Agriculture Index (pro-WEAI) to measure women's and men's empowerment in the abaca, coconut, seaweed, and swine VCs in the Philippines and to investigate the correlates of empowerment.

Key issues in regional growth and integration in Southern Africa

The decade to 2015 saw rapid growth in trade between Southern African Development Community (SADC) countries. Much of this growth reflected South African exports to its neighbours of diversified manufactured goods to meet growing urban consumption and to supply inputs to mining and infrastructure. While most SADC countries, aside from South Africa, grew quite rapidly over this period, their exports remained oriented to a narrow range of minerals and agricultural commodities destined to go outside the region.

Smallholder value chains as complex adaptive systems: a conceptual framework

Purpose

Smallholder value chains are dynamic, changing over time in sudden, unpredictable ways as they adapt to shocks. Understanding these dynamics and adaptation is essential for these chains to remain competitive in turbulent markets. Many guides to value chain development, though they focus welcome attention on snapshots of current structure and performance, pay limited attention to the dynamic forces affecting these chains or to adaptation. The paper aims to discuss these issues.

Value Chains in Sub-Saharan Africa
  • Presents original empirical research on value chains in sub-Saharan Africa
  • Studies a large variety of countries and sectors
  • Offers contributions by leading scholars

Development largely depends on how given places participate in global economic processes.

The Importance of Standards

Quality standards are increasingly important for farmers to be able to export in high-value markets. Two case studies illustrate both the risks and the potential benefits for farmers related to meeting export standards. Farmers in Kenya defaulted after having their produce refused by an exporter for failing to adhere to export standards. In Honduras, Wal-Mart was able to enforce the practices needed to export jalapeno peppers.

Feed the Future Learning Agenda Literature Review: Expanded Markets, Value Chains, and Increased Investment

The objective of this paper is to summarize available evidence on key questions for the Feed the Future Learning Agenda theme on expanded markets, value chains and increased investments, and document expert opinion on gaps in the scientific literature for this theme that are in most urgent need of attention.

Among the gaps identified are the lack of rigorous impact assessments of value chain interventions. Specifically "the vast majority of the data available measure outcomes that suggest reductions in poverty rather than quantify impacts on poverty."

Can Dairy Value Chain Projects Change Gender Norms in Rural Bangladesh? Impacts on Assets, Gender Norms, and Time Use

Using both quantitative and qualitative research methods, the Gender, Agriculture, and Assets Project (GAAP) worked with CARE-Bangladesh to assess the impact of the Strengthening the Dairy Value Chain Project (SDVCP) on (1) women’s ownership of assets, men’s ownership of assets, and jointly held assets; (2) gender norms around asset ownership and control; (3) gender norms regarding decisionmaking in these areas surrounding the dairy value chain; and (4) trade-offs and time costs involved in project participation.

Governance Structures in Smallholder Pig Value Chains in Uganda: Constraints and Opportunities for Upgrading

This paper analyses governance structures in Uganda’s smallholder pig value chains by applying the New Institutional Economics framework. It utilises cross sectional and qualitative survey data from randomly selected pig value chain actors in 4 districts. A multinomial logit model is applied to assess the determinants of vertical integration among pig traders. The findings indicate that most relationships at the pig production node of the value chain are based on spot market governance structures supported by personal relationships and trust.

Africa Agriculture Status Report 2017

The authors first discuss the value of value chains and how they can benefit from resilience. They follow this with a detailed analysis of the risks and resilience of different components of the value chain and conclude with a discussion of the business of resilience.  

Here is a list of key messages from this paper:

LINK methodology: A Participatory Guide to Business Models that Link Smallholders to Markets

Helps actors understand the current functioning of the market chain and key business models, design innovations that empower producer groups to engage more effectively and buyers to act in ways more amenable to smallholder farmers.

5Capitals: A Tool for Assessing the Poverty Impact of Value Chain Development

Facilitate the design and/or assessment of interventions for value chain development, taking into account the circumstances and needs of upstream-chain actors (namely, stallholder producing households and small and medium enterprises that have direct relations with smallholders). The tool has been tested in 20+ countries in S Asia, Africa, and LAC.

Quantifying Value Chain Analysis in the Context of Livestock Systems in Developing Countries

This paper attempts to inject more rigorous quantitative methods into value chain analysis. Approaches examined include System Dyanimcs (SD) that model flows and relationships between actors with which one can examine the impact of alternative scenarios over time. Agent-Based Models (ABM) model individual farmers, institutions, and social groupings. In SD models, actors are assumed to be the same whereas in ABM models a set of heterogenous characteristics may be defined for each agent.

Working with Smallholders: A Handbook for Firms Building Sustainable Supply Chains

This handbook prepared by the International Finance Corporation presents the benefits and challenges of sourcing from smallholder farmers.

Promoting Gender Equitable Opportunities in Agricultural Value Chains

This handbook helps practitioners become familiar with how to analyze and strategies to address gender issues in agricultural value chains.

Integrating Very Poor Producers into Value Chains

The Integrating Very Poor Producers into Value Chains Field Guide (Field Guide) is intended to provide the field-level practitioner with tools and applications to impact very poor households. The intended outcome of the Field Guide is to increase market engagement for very poor households, especially women, through enterprise development activities.

Making the strongest links: A practical guide to mainstreaming gender analysis in value chain development

A new publication from the ILO provides groundbreaking methods for incorporating gender concerns into the different stages of value chain analysis and strengthening the links essential for gender equality and promoting sustainable pro-poor growth and development strategies.

Toolkit Gender in Value Chains

This book by Agri-Profocus provides a range of tools for integrating a gender perspective at different stages of value chain development interventions.

Women play crucial roles in agricultural value chains. However, their contribution often remains invisible. For producers and other chain actors and supporters, this can lead to inefficient chains. In consequence, business opportunities may suffer and profits will be lower and/ or unequally distributed. Moreover, existing gender inequities will be perpetuated. 

Evaluating Value Chain Interventions: A Review of Recent Evidence

This ILRI discussion paper reviews 20 value chain interventions and discusses the econometric techniques used to address the validity of findings. It explores the use of propensity score matching, instrumental variables, difference in difference, regression discontinuity, and randomized controlled trials. Qualitative and participatory methods are also examined with the idea that they may be able to better capture the complexity of value chain processes.

A Methodological Toolkit for Promoting Business Partnerships in Agrifood Chains

This FAO report provides tools to help include small producers in the production process and the market from the value chain perspective. It contains information on how to select a value chain for an intervention, make partnerships, and monitor and evaluate the success of those partnerships.

This methodological proposal is aimed at promoting and developing business partnerships. It provides tools to help include small producers in the production process and the market from the value chain perspective.

Identification and Analysis of Smallholder Producers' Constraints: Applications to Tanzania and Uganda

This article puts forward a method for the analysis of constraints faced by developing countries’ smallholder producers. It is consistent with theories of constraints, efficient in terms of cost and researchers’ time, and accessible to a non-technical audience. A hybrid of workshop discussion and individual data collection, it also draws on data and analyses available in most developing countries.

Promoting Value Chains of Neglected and Underutilized Species

This guide from the Global Facilitation Unit for Underutilized Species draws on several successful country experiences promoting and developing value chains for underutilized crops. It focuses on the particular characteristics of neglected and underutilized crops and how to develop supply and demand based strategies to improve pro-poor development and preserve biodiversity.

Gender Mainstreaming in Value Chain Development

This manual is aimed at advisors who work on economic development and value chain development issues. Women and men are likely to be involved at different stages of the chain. Those areas where women are involved are often less visible but may constitute critical links at which change and/or upgrading should occur in order to bring about development of the chain (home working, putting out, temporary work, etc.). Addressing those stages in the chain is therefore indispensable in developing the chain.

Review of gender and value chain analysis, development and evaluation toolkits

Included in the Annex of a literature review on gender and value chain toolkits, this rapid assessment tool for gender and crop value chains has been developed to collect basic data on men and women’s involvement in crop value chains, their roles and constraints and existing opportunities for promoting gender equality through value chain development. Information from the tool is meant to provide a rough assessment of what kinds of interventions would improve benefits of value chain development to men and women farmers.

Eastern and southern Africa agriculture value chain learning hub:Market needs study

In an effort to better understand agriculture value chains market needs in relation to CGIAR Research Program on Policies, Institutions, and Markets (PIM) learning hubs, the International Livestock Research Institute (ILRI) conducted a market needs study to assess the current situation and find any possible common ground between the East and southern Africa (ESA) PIM learning hub and the needs and expectations of key actors in the market.

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