العربية 中文 Englishlanguage Français Русский Español THE STATE OF FOOD SECURITY AND NUTRITION IN THE WORLD 2023 CHAPTER 3 URBANIZATION IS TRANSFORMING AGRIFOOD SYSTEMS AND AFFECTING ACCESS TO AFFORDABLE HEALTHY DIETS ACROSS THE RURAL–URBAN CONTINUUM

What factors have contributed to the growing demand for fast food among Indian consumers?Urbanization contributes to the transformation of agrifood systems by reshaping spatial patterns of food demand and affecting consumer preferences, changing how, https://shorturl.at/ahO89, supplied and consumed. These changes are affecting agrifood systems in ways that are creating both challenges and opportunities to ensure everyone has access to affordable healthy diets. https://shorturl.at/ahO89, households often eat greater and more diverse quantities of food, including dairy, fish, meat, legumes, fresh fruits and vegetables, as well as more processed foods.52, 53, 54, 55 This, together with population growth, implies substantial increases in the production and supply of some types of foods (i.e. meat, dairy, fresh fruits and vegetables, wheat and wheat products, as well as highly processed foods) to satisfy increased demand. This, in turn, as urban populations grow, translates into vast increases in the total amount of food that agrifood systems have to produce, process and distribute over time. There may also be slower growth or even declines in demand for other food products sold such as traditional grains, maize, roots and tubers. Adjustments in the quantity and quality of food demand and supply bring about changes in markets and retail trade; midstream food supply chains (changes in post-harvest systems for logistics, processing, wholesale and distribution); rural input markets; agricultural technology; and the size distribution of farms.14, 56 Thus, agrifood systems are transformed, from traditional and mostly rural systems based on local market linkages and farming employment, to systems with greater connectivity between rural areas, and between rural, peri-urban and urban areas. This entails more complex rural–urban market linkages across a spatial and functional rural–urban continuum, and more diverse employment opportunities along the food value chain, including processing, marketing and trade. It also entails more dependence on income and food pricing (affordability) for dietary choices, as there is a greater dependence on purchased foods. Of specific concern against this backdrop are the changes in the supply and demand of nutritious foods that constitute a healthy diet; their cost relative to foods of high energy density and minimal nutritional value, which are often high in fats, sugars and/or salt; and their cost relative to people’s income (i.e. their affordability). Figure 20 presents a conceptual framework for understanding the different pathways through which urbanization is driving changes in agrifood systems across the rural–urban continuum, and is, in turn, affecting access to affordable healthy diets. The orange text throughout this section refers to specific elements in Figure 20 for emphasis and to ease cross-referencing with the figure. The framework was developed based on a systematic review and meta-analysis of evidence from scientific studieso and informed by new analysis presented in Chapter 4 on changes in food demand and supply across the rural–urban continuum. Figure 20 recognizes that urbanization is not an agrifood systems driver in isolation but that it changes agrifood systems in interaction with other drivers including income growth, employment, lifestyles, economic inequality, policies and investments. FIGURE 20 THE PATHWAYS THROUGH WHICH URBANIZATION AFFECTS AGRIFOOD SYSTEMS AND ACCESS TO AFFORDABLE HEALTHY DIETS A presentation of a conceptual framework for understanding the different pathways through which urbanization is driving changes in agrifood systems, which in turn affect the access to affordable healthy diets. FIGURE 20: LONG DESCRIPTIONThe interconnected boxes of urbanization driving changes in agrifood systems affecting access to affordable healthy diets and other drivers of agrifood systems change alongside urbanization: income growth, employment, lifestyles, economic inequality, policies, and investments indicate rural–urban continuum, where agrifood systems of food supply chains and food environments connect. Production, midstream (logistics, processing, and wholesale), downstream (marketing, retail, and trade), and consumer behavior and diets are connected together. The sub-divisions of production are diversification and productivity, production factors, land use, and natural capital. The sub-divisions of midstream and downstream are value chains, markets, trade, and food deserts. The sub-divisions of consumer behavior and diets are diets, demand, processed foods, and food away from home. The notes at the bottom of production read product diversification and more productive farms well connected to urban markets, increasing access to production factors for farmers well connected to urban markets, conversion of agricultural land to urban land use, increase of agricultural land elsewhere, and risks to natural capital needed for agriculture, especially water resources. The notes at the bottom of midstream and downstream read growing employment in longer, more formal, and complex food value chains: transport, processing, packaging and trade, increasing number and size of (peri-)urban food markets (formal and informal) and retail outlets, substantial expansion of supermarkets and increase in types and quantities of highly processed foods, and urban food deserts: limited distribution of nutritious foods in some poor areas and neighborhoods. The notes at the bottom of consumer behavior and diets read more diversified diets: higher-value and more nutritious foods, but also increasingly of minimal nutritional value and high in fats, sugars and/or salt, urban poor and rich eating more highly processed foods, convenience foods, and food away from home, the widespread diffusion of food purchases in rural areas, and diet transition occurring in rural areas, though lagged and lower. The chart at the bottom indicates access to affordable healthy diets. SOURCE: de Bruin, S. & Holleman, C. 2023. Urbanization is transforming agrifood systems across the rural–urban continuum creating challenges and opportunities to access affordable healthy diets. Background paper for The State of Food Security and Nutrition in the World 2023. FAO Agricultural Development Economics Working Paper 23-08. Rome, FAO. This conceptual framework stipulates that in addition to rural areas, food can also be produced in urban and peri-urban areas. In many countries, the components of agrifood systems are more interconnected. There are also both short and long food supply chains, and there can be a dislocation of midstream processing away from urban areas as part of very long supply chains. For these reasons, the conceptual framework does not visualize the rural–urban continuum alongside the agrifood systems continuum; it is a broader continuum in which agrifood systems can be placed. Figure 20 depicts the ways in which urbanization is affecting three major components of agrifood systems: i) consumer behaviour and diets; ii) midstream (e.g. logistics, processing and wholesale) and downstream (e.g. markets, retail and trade) food supply chains; and iii) food production. The figure presents these three components in the standard order for conceptualizing agrifood systems and food supply chains. However, the following sections start at the other end with consumer behaviour and diets, as this is one of the most important pathways through which urbanization is driving changes in agrifood systems. Changes across agrifood systems also impact food environments which here refer to physical, economic, sociocultural and policy conditions that shape access, affordability, safety and food preferences.57, 58, 59, 60 Moreover, as illustrated in Figure 20 and expanded on below, food environments reflect a complex interplay among supply-side drivers including food pricing, product placement and promotion, and demand-side drivers including consumer preferences and purchasing power. Together this complex interplay of supply and demand considerations is key to understand how urbanization is driving changes in agrifood systems across the rural–urban continuum, affecting access to affordable healthy diets. Consumer behaviour and diets One of the most important pathways through which urbanization is driving changes in agrifood systems is through a shift in consumer behaviour and diets (Figure 20). Higher average incomes, combined with changing lifestyles and employment, are driving a dietary transition. While this is occurring in countries and regions at different speeds and with variations, it is happening around the world. This transition is characterized by changes in the types and quantities of food consumed, with diets shifting beyond traditional grains into dairy, fish, meat, vegetables and fruits, but also into consumption of more processed foodsp and convenience foods or food away from home. These changing preferences are reinforced by the greater diversity of both food products and places to buy food in urban food environments, ranging from supermarkets to informal markets, food street vendors and restaurants.61 The increased availability of these options often results in increased food consumption and dietary diversity. Dietary preferences are also shaped by marketing and other supply factors, with a reinforcing compounding effect on the food produced, supplied and consumed. However, urbanization has also contributed to the spread and consumption of processed and highly processed foods, which are increasingly cheap, readily available and marketed, with private sector small and medium enterprises (SMEs) and larger companies often setting the nutrition landscape. Cost comparisons of individual food items and/or food groups from existing studies indicate that the cost of nutritious foods – such as fruits, vegetables and animal source foods – is typically higher than the cost of energy-dense foods high in fats, sugars and/or salt, and of staple foods, oils and sugars.62, 63, 64, 65 The relative prices of nutritious foods and foods of high energy density and minimal nutritional value have also been shown to differ systematically across income levels and regions.62, 66, 67 With urbanization, purchases from supermarkets, fastfood takeaway outlets, home deliveries and e-suppliers and other convenience retailers are increasing.68, 69, 70 In Latin America and the Caribbean, for example, there has been a profound shift in the last 20 years towards foods of high energy density and minimal nutritional value, including sugar-sweetened beverages. While this phenomenon occurs predominately in urban and peri-urban areas, it is spreading to rural areas and Indigenous Peoples’ lands. There has also been a shift towards increased consumption of food away from home and snacking, which corresponds to high levels of overweight and obesity among all ages, along with high burdens of stunting in some countries.69 Such challenges are not unique to the Latin America and the Caribbean region, and many settings now face multiple, simultaneous burdens of different forms of malnutrition.71, 72 Another reason for the spread of processed foods is convenience. Urbanization is associated with changes in the lifestyles and employment profiles of both women and men, as well as increasing commuting times, resulting in greater demand for convenience, pre-prepared and fast foods. Women, who often bear responsibility for food preparation, are increasingly working outside the home, and thus may have less time to shop, process and prepare food. At the same time, men are increasingly working far from home in other cities. These trends are driving the purchase of pre-prepared or ready-to-eat cereals such as rice and wheat,73, 74 along with more processed foods and food away from home prepared by restaurants, canteens, retailers, etc.18 The food processing sector and fastfood segment have grown quickly as a result. For example, eating patterns of Tanzanian migrants change when they move from rural to urban areas, away from traditional staple foods such as cassava and maize, and towards convenience, ready-to-eat or pre-prepared foods such as rice, bread and food away from home.75 Increasingly, this trend is also occurring in rural areas as a time-saving measure for off-farm labourers and women working outside the home, facilitated by increased rural incomes, increased supply of these foods from urban and other rural areas, and reduced transportation costs because of better roads. The diet transition is also occurring in rural areas, though lagged and to a lesser extent compared to urban and peri-urban areas. New studies in the last two years,52, 53, 76 including the new analysis presented in Chapter 4, underscore the extent of the diet transition across the rural–urban continuum and the absence of stark differences between urban and rural areas within countries analysed. There is also a diffusion of food purchases in rural areas, more so than is commonly understood. The diet in these areas has shifted from mainly home-produced foods to increasingly market-purchased products. The rural poor are heavily engaged in purchasing food from markets and are, in general, net food buyers. In Eastern and Southern Africa, research shows rural households buy 44 percent (in value terms) of the food they consume.77 A study of Bangladesh, Indonesia, Nepal and Viet Nam shows rural households buy an even higher proportion of their food – 73 percent (in value terms).78 Moreover, new research presented in Chapter 4 also shows that food purchases form the majority (average 56 percent) of the foods consumed (in value terms) by rural households in 11 countries in sub-Saharan Africa. This is true even for those households living 1 to 2 hours from a small city or town (average 56 percent), and those living more than 2 hours from a city or town (average 52 percent). Studies show that while consumption of processed foods (of all types) is higher in urban areas, in terms of the proportion of expenditure on food, rural consumption of processed foods is not much lower.54, 79 In Eastern and Southern Africa, for example, 29 percent of total food outlays are spent on such food, and of these 17 percent are spent on purchased milled grains classified as minimally processed items, 48 percent on non-grain minimally processed foods and 35 percent on highly processed foods.77, 80 Recent evidence from three African countries shows that the shares of processed foods of all types are surprisingly high among the poor and even the ultra-poor, in both rural and urban areas.52, 53, 54 However, there are different patterns of consumption of various types of processed foods across the rural–urban continuum, with highly processed food and food away from home shares showing a strong correlation with total food-budget shares and urban areas in the 11 sub-Saharan Africa countries analysed (see Chapter 4).54, 79 Midstream and downstream food supply chains Another pathway through which urbanization is affecting agrifood systems is changes in midstream and downstream food supply chains (Figure 20). These changes are often the result of increased investments in infrastructure such as roads, warehouses and cold storage facilities. The midstream consists of the post-farm gate activities related to the logistics, processing and wholesale of food. This includes cleaning, sorting, packaging, transportation, storage and wholesaling of agricultural and food products. Downstream food supply chains involve those segments more directly related to consumer purchases, that is retail markets and sales, and trade. Food supply chains Urbanization can contribute to longer, more formal and more complex food supply chains, following rising consumer demand and increased regulation of agrifood systems.81, 82 As cities grow and diets of urban dwellers change, urban populations increasingly must look beyond local production for their food supply. Only around 30 percent of urban residents worldwide are estimated to fulfil their demand for specific crops locally (approximately 100 km radius).83, 84 The majority of urban food demand, about 80 percent, is supplied regionally (within a 500 km radius).85 Although some of the foods consumed in urban areas must travel far to reach their destination, most are produced within national borders and traded domestically (for example, this share is 90–95 percent in Asia).80 Exceptions are the entire Near East and North Africa region, some countries in sub-Saharan Africa, as well as the Small Island Developing States. According to the latest World Trade Organization report, there are 32 net food-importing developing countries.86 For these countries, food imports can be substantial. For example, according to the OECD–FAO Agricultural Outlook, roughly 70 percent of all food commodities consumed in the Near East and North Africa are imported.87 For most other countries, imports are a low share of food supply, and mainly consist of a few products, such that domestic supply chains really drive food supply.55 This is consistent across regions and most food groups (except oils and fats), and is particularly the case for fruits, vegetables and animal source foods, which are important food groups for healthy diets. Domestic food supply chains are usually long and criss-cross a country from supply zones to cities and rural areas.88 Short rural local supply chains, or traditional food supply chains based around subsistence agriculture, only account for approximately 10 percent of the food economy in Africa and Southern Asia, and 5 percent in South-eastern Asia and Latin America.76, 88, 89 On the other hand, long supply chains connecting rural producers to urban consumers through a web of labour-intensive agrifood SMEs are more prevalent, accounting for approximately 70 percent of the food economy in Africa and Southern Asia, and 50 percent in South-eastern Asia and Latin America.88, 89 Modern food supply chains based around supermarkets and large processors tend to be long as well, stretching from rural areas to urban areas, but they also include international elements. Such long supply chains account for approximately 20 percent of agrifood systems in Africa and Southern Asia, and 45 percent in South-eastern Asia and Latin America. Midstream food supply chains