Rethinking Food Markets and Value Chains for Inclusion and Sustainability - Proposal

The food sector constitutes about one fifth of the global economy and is the world’s largest source
of income and employment. The livelihoods of most of the world’s poor and vulnerable
people depend on it. In recent decades, agricultural productivity has steadily grown, and
technological and institutional innovations have proliferated within agrifood markets and value
chains, helping reduce poverty and food insecurity around the world.
Despite these critical contributions, the ways in which food markets are structured and operate
have negative impacts. Much of the rural population employed within the agrifood sector remains
poor and food- and nutrition-insecure, and evidence suggests that at least 3 billion people

Rethinking Food Markets and Value Chains Initiative Proposal – Sept 28, 2021
globally, including both the rural and urban poor, cannot afford nutritious diets. These
populations have been unable to benefit from expanding food markets. More food processing has
brought food diversity and more convenience to consumers, but also worrisome increases in the
consumption of unhealthy foods . The sector’s over- and misuse of natural resources has also
degraded the environment and exacerbated the climate crisis and biodiversity loss. Many of these
failures are rooted in markets hindered by multiple deficiencies in infrastructure, equipment, and
standards; incentives that do not foster sustainability, nutrition, or inclusiveness; concentrated
market power; and weak value-chain integration. The key challenge is how to address these
multiple constraints and develop value chains that efficiently deliver more nutritious and safe
foods to retailers and consumers, while generating decent livelihoods for farmers and food sector
workers—including women and vulnerable groups—and reducing the carbon footprint of
agriculture.

This is a major challenge, but there are also enormous opportunities. Food markets and value
chains are undergoing rapid changes, including in developing countries, as urbanization
accelerates, technologies proliferate, policies aim to address market failures, and dietary patterns
shift. New products, modern distribution systems, and digital technologies continue to transform
supply chains . These changes represent unique and timely opportunities for more gainful
employment and business activity for disadvantaged agrifood actors, including smallholders and
workers in small- and medium-size enterprises (SMEs), especially women and youth. More
appropriate incentive structures and repurposed agricultural policy support can encourage the
adoption of sustainable practices at the farm level and across food value chains. Food standards
for quality, safety, environmental sustainability, and fair trade can protect both consumers and the
environment and make smallholders and agrifood SMEs more competitive.
However, no single approach, innovation, or policy will suffice. Improving the ability of food
systems to reduce poverty, improve nutrition, promote gender equality, and sustainably use
resources will involve combining technical and organizational innovations with enabling market
incentives, institutional and regulatory frameworks, and public policy, all within specific value
chains and food markets

Vos, R. and Wiegel, J.