Addressing Food Crises and Leveraging the "Hidden Middle"
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Rob Vos SEMINAR Virtual Event --Discussion of the 2020 Global Food Policy Report Co-Organized by the Ministry of Foreign Affairs, Government of the Netherlands, IFPRI, and Food & Business Knowledge Platform APR 28, 2020 - 10:00 AM TO 11:15 AM EDT
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Addressing Food Crises and Leveraging the "Hidden Middle"
- 1. Addressing Food Crises and Leveraging the “Hidden Middle” Rob Vos Director Markets, Trade and Institutions Division International Food Policy Research Institute
- 2. Rising Food Crisis Risks 2019 135 million people facing acute crisis-level food insecurity (FSIN/GRFC) Conflict, weather shocks and economic crises are main drivers Over 70 million people are forcibly displaced people in crisis-level food insecurity 2020 COVID-19 impacts via global recession and food supply disruptions 5% global downturn could increase number of poor by 148 million (IFPRI) 0% 5% 10% 15% 20% 25% 0 40 80 120 160 World Sub-Saharan Africa South Asia Increase no. of poor (millions) % increase poverty (RHS)
- 3. HOW? (1) Provide long-term refugees access to land and jobs for food security and local economic development (2) Revive local agriculture and food value chains to create resilience against shocks and build peace (3) “Social Protection Plus” programs to combat hunger and rebuild rural livelihoods (before, during, and after) Food security for peace and resilience Half of hungry people live in conflict-affected countries Most depend on rural livelihoods Being a refugee is a long-term affair
- 4. HOW? (1) provide adequate basic infrastructure (roads, electricity, ICT connectivity), esp. near small cities (2) create the right market incentives and food standard regulation (3) facilitate skills development for entrepreneurship, use of ICT and adoption of quality standards (4) promote inclusive business models for smallholders Leveraging the “hidden middle” Opportunities: growing and changing food markets SME-driven supply dynamics from “hidden middle” Post-farm agri-food businesses generate relatively high incomes 0 10 20 30 40 50 Egypt Ethiopia Malawi Bangladesh Myanmar Vietnam Share of Agri-food Sector in GDP Farm Processors Aggregators and traders Food services
- 5. The COVID-19 pandemic emphasizes importance of well developed, resilient food supply chains It is a crisis and an opportunity: building inclusive food systems is important as never before. Let’s begin by strengthening the hidden middle and also invest in food security to prevent conflict and create livelihoods for refugees Where to begin?
Editor's Notes
- GFPR = 135 million people in near famine situations, requiring food assistance Three main drivers and cause of rising numbers of hungry people and numbers of protracted food crises Causing migration and rising refugee populations to over 70 million in 2019 COVID-19 comes on top of these crises and affecting poor people more broadly. Already now, as we enter a global economic recession and as the virus spreads further in developing countries it could disrupt supply chains and destroy livelihoods. We estimate that a 5% global downturn could put almost 150 million people into extreme poverty and food insecurity. This is major. It is perhaps not apocalyptic as some of my friends at WFP have put it. But it is major. It sets back hunger reduction back by XX years. To avoid this health crisis becoming a major food crisis, we need more resilient food systems. We needed this before COVID-19 and we need them even more now. Lte me highlight two sets of lessons from GFPR what can be done to get there.
- Provide long-term refugees access to land and livelihoods to help them achieve food security while also strengthening local economies. Take the example of Uganda which currently hosts 1.2 million refugees, the third largest refugee population in the world. The country’s Refugee Policy (2006) and Refugee Regulations (2010) grant refugees access to land, freedom of movement, and the right to seek employment. This strategy has helped refugees, mostly from South Sudan, to build independent livelihoods and achieve food security while strengthening local economies. (2) Rebuild local agriculture and food value chains to help conflict-affected people move beyond subsistence agriculture, rejoin exchange markets, adopt climate-smart practices, and become resilient to economic and climatic shocks. Uganda’s Peace, Recovery, and Development Plan of late 2000s, facilitated peacebuilding efforts and prioritized investments in agriculture to cement post-conflict recovery. Multiple organizations have helped ex-combatants and returning IDPs get back on their feet through the provision of agricultural tools and inputs, including climate-resilient seeds, support for livestock restocking, and the introduction of cash- and food-for-work programs. (3) Protect agriculture, food production, and rural livelihoods before, during, and after conflict. Social protection program can be effective part of such a strategy.. Cash+ transfer programs in conflict-affected Mali and Mauritania, meanwhile, have been shown to improve incomes of beneficiary households and reduce the use of negative coping strategies, including selling land, deploying child labor, and begging, in response to adverse shocks.
- Let’s start with the hidden middle. Running small, off-farm agri-food businesses is already highly profitable. In fact, per worker income in this part of the food chain is much higher than farm income and can even pay off more than non-food activity, as this graph shows for the average situation in several African countries. Such businesses are already a multitude in food supply chains in African and Asia. Policy makers should see the potential for their growth and further development. How can policies create a better environment for agri-food SMEs to thrive and integrate the hidden middle of the food supply chain? In the GFPR we recommend four priority types of support governments can provide: First, improved infrastructure and access to finance. Evidence shows that such support will be more inclusive if this benefit SME processors, distributors and transporters that connect to supply chain between rural areas and small urban areas. Second, there is a need for publicly certified food standards and price incentives for SMEs to meet higher quality and food safety standards of consumers and be able to better compete in domestic markets and, also, connect to global value chains. Third are education policies. Basic education is important, but also professional training to improve entrepreneurship, knowledge of ICT and food safety and quality standards. Fourth, encourage inclusive agri-business models like cooperatives and contract farming which help link smallholders to hidden middle.
- The COVID-19 pandemic emphasizes importance of well developed, resilient food supply chains, everyone is now getting painfully aware. The Chinese word for crisis links danger and opportunity. Hopefully, this health crisis will raise awareness of the importance of building better integrated and inclusive food supply chains. Agricultural policy alone is not good enough. We need to leverage the entire supply chain. For the poor in Africa and South Asia – I would argue – it can all begin by strengthening the hidden middle. While more complex in situations of conflict and giving refugees a chance to rebuild livelihoods, also here building resilient food supply chains holds to key to lasting peace.