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Formal and informal markets: Beyond appearance
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Presented by Silvia Alonso at a 'Food consumption, urbanization and rural transformations' regional workshop, Nairobi, Kenya, 12-14 October 2015.
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Formal and informal markets: Beyond appearance
- Formal and informal markets: Beyond appearance Silvia Alonso Food Safety and Zoonoses program, ILRI Food consumption, urbanization and rural transformations regional workshop 12-14 October 2015 Nairobi, Kenya
- What is (IN) formal markets? MESSAGE 1: “… informal markets are big and here to stay….” photo credit: ILRI/Stevie Mann photo credit: ILRI/Stevie Mann
- Judgments and prejudices Limited infrastructure (unavailability of toilets, running water, structures not easy to disinfect, flies,…) – if you sample it, you’ll find it!! Food products “informal markets” unsafe/risky MESSAGE 2 “Informal not necessarily unsafe; Formal not necessarily safer” photo credit: ILRI/Stevie Mann
- Hazard assessment in Vietnam (pork) From: Lapar L, et al. Building an enabling environment for food safety in informal markets in India and Vietnam: the role of capacity strengthening (LCIRAH conference 2014)
- Risk assessment in Vietnam (pork) From: Lapar L, et al. Building an enabling environment for food safety in informal markets in India and Vietnam: the role of capacity strengthening (LCIRAH conference 2014) MESSAGE 3 “…presence of hazard does not necessarily mean risk”
- The “informal” dairy sector in Kenya Informal=raw milk (85% milk production, Kenya) Informal milk sector feeds the largest amount of population availability / accessibility (amount, location, price) / nutrition Offers livelihoods to many Increased support from regulators through a “training and certification” scheme (2006) Satisfied traders, better milk quality, legitimization Recent push back from government limited resources, concerns food safety, pressure from processors, … Blackmore E, Alonso S, Grace D. Legitimizing informal markets: a case study of the dairy sector in Kenya. Policy brief. (in press)
- Moving forward…. HOW TO RAISE QUALITY (safety, nutrition) WHAT FORMALIZATION MODEL TOWARDS RISK-BASED and ENABLING POLICIES photo credit: ILRI/Ben Lukuyu photo credit: ILRI/Brad Collis
Editor's Notes
- If I ask many of you which one would you classify as “informal market”, I am sure many of you would indicate the one on the left. But if I told you this trader has all the licenses from government to commercialize with that product, a good part of you may be more include to say then that is formal. Another part of you would still think this is informal (size, disorganized, limited infrastructure,…). There is no a clear definition. The “experts” seem to agree that the definition has to do in part with size, in part with adherence to regulations, in part with organization level, … regardless of the definition, this is the most common type of market found in most countries in Africa. It responds to a true demand for accessible/cheap and fresh food, and fills the gap for a nutritious diet among poorest sectors of society. So here goes the first news – informal markets are big, and there is no evidence of them disappearing, at least no in the short run. However, there is a preconceived perception/believe in which most people may find themselves in agreement: the market on the left seems to be/it is perceived as having less quality and less safe food products. Food safety and quality in informal markets is probably one of the characteristics on which people in general may be in agreement.
- Am I though quite sure that we could easily reach consensus on what we believe is a market that sells less safe/ less quality food products.
- (informal=raw milk / formal pasteurized milk) – 85% milk commercialized through informal sector; Informal milk sector feeds (nutritional security) the largest amount of population; in urban sectors (great majority of consumers in informal settlements) – not access to supermarkets (price, proximity, …) Informal sector meets the demand from poor consumers – need to buy small amounts (pasteurized milk in small packages), but still need milk at low prices. VC actors: producers – traders (2 types: operating in more “structured” establishments / mobile vendors (door to door, bicycles,…) – consumers Offers livelihoods to many (estimates of … numbers of jobs per litre); makes available and accessible a nutritional product to poor consumers Despite regulators support over the past years, now backing – ATMs issues, unable to see the benefits from supporting informal sector, pressure from big processors
- From the presumption that: informal markets provide unique nutritional value to poor consumers (responding to a true demand); provided that formal VCs do not necessarily seem to give higher guarantee of food safety (hazard vs risk; same microb quality); How to offer consumers dependent on the informal sector a wholesome product? What incentives, how to liaise with informal sector actors to encourage investing on higher quality products. Informal markets are here to stay… THERE MEET A TRUE DEMAND. What type of formalization is sensible to aim at? Is “formal” the ultimate aim? What model should we be encouraging? A model that acknowledges the characteristics and limitations, as well as the capacity of the sector, and works to maximize its potential (economic, safety,…); also accounting for the need to create a competitive and economically viable dairy sector. Beyond hazards – assessing the risk – how to engage policy makers on this concept. – create more public health protecting policies
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