Improving the ‘hidden middle’ of agri-food value chain

The exodus from countryside to city means that 66 percent of the world’s population will live in cities by 2050. This shift is creating a growing issue of urban malnutrition as the result of a barriers that create financial and physical barriers to food. Research has identified the main cause of this breakdown is in the ‘hidden middle’ of the agri-food value chain and therefore this is where the focus should be to rectify the situation.

Globally, more people live in cities than in rural areas. The exodus from countryside to city in search of jobs, quality of life and opportunity is set to continue, meaning that 66% of the world’s population will live in cities by 2050. At the same time, global rates of malnutrition are growing as the world struggles to distribute the food we produce equally. As a result, 50.5 million children are currently suffering from malnutrition.  

Inequality as a result of urbanisation and rural transformation occurs when social groups - often low-income groups, including those that face social exclusion for reasons such as gender, age, ethnicity, race, religion, or social class - are ignored and marginalised. By excluding these groups from the benefits of living urban areas such as; greater access to services and infrastructure, employment and access to nutritious foods, the cities of the future will face widening inequality and deepening poverty levels.

Urbanisation has led to the emergence of both physical and financial barriers for the poorest communities in accessing food. In this respect, urban residents tend to be more disadvantaged than their rural counterparts because they have to purchase their food, which makes them dependent on food markets and thus more vulnerable to inflation. For instance, research shows that urban dwellers are likely to buy more than 90% of their food and therefore prices are a major determinant of whether food can be acquired. Residents of metropolitan areas such as Cairo purchase between 92% and 98% of their food whilst in rural Peru 58% of food is purchased, and in the countryside of Mozambique just 29% of food is purchased and the rest, grown.

However, even when enough food is available for a population, in developing countries, such as Ghana, Nigeria, and Tanzania, or in South Asia in Bangladesh, India and Pakistan, there is a breakdown of the agricultural value chains preventing the food being produced from reaching urban citizens. Research shows that this is the result of inefficiency in the “the hidden middle” of the value chain.

The middle of the agri-food value chain refers to areas such as processing, logistics and whole-sale. It is a substantial section of the supply chain. In developing countries for example, the ‘hidden middle’ forms 30 to 40% of the value added and costs in food value chains. Therefore, the productivity of the midstream is as important as farm yields for food security in poor countries and yet these are areas often left unsupported. This is particularly important when considering the longer supply chains typical of cities in less developed countries, as they are more vulnerable to shocks including climatic and socio-political as well as food safety challenges. Such events consequently put already vulnerable communities at risk of food scarcity.

According to a report by Thomas Reardon, the way to solve the issue of the inefficient ‘hidden middle’ is through innovation. He notes that over the past several decades the middle segments of argi-food value chains have transformed, with a huge volume expansion, a proliferation of small and medium enterprises (SMEs) dedicated to improving efficiency by utilising new technology to improve procurement interfaces between farmers and retailers.

Therefore, to ensure that malnutrition in the world’s rapidly expanding cities does not worsen, innovation at the middle of the value chain should be nurtured to ensure that crops reach urban populations in the form of affordable, nutritious food.

And this is key.

It is becoming increasingly evident that even if urban food security is improved, it does not necessarily lead to improved “nutrition security”.

A crucial aspect of food consumption in both developing and developed countries is the quality of food the population is consuming. Research shows that urbanisation has created a “nutrition transition”, where people have less time to cook and more disposable income increasing a reliance on processed foods. This shift leads to increasing intakes of calories often from sugars and fats and results in obesity crisis and poor nutrition. In addition, the nutrition transition is also being linked to an increased incidence of non-communicable diseases such as diabetes and cardiovascular disease. As such, although the obesity epidemic is traditionally considered to be a health concern of developed countries, today the overall burden of obesity and chronic diseases is greater in developing countries. Consequently, consideration must be paid to how governments and authorities can promote healthy diets to counter this new trend.

Key to ending hunger, one of the Sustainable Development Goals to be achieved by 2030, is understanding where the breakdown is occurring along the agri-food supply chain and supporting these links in order to ensure food security for communities all over the world. By identifying the need to support the ‘hidden middle’ of this chain through innovations that diminish waste and protect the crop’s nutrients, could turn around the rapid onset of urban malnutrition and reduce illness, allowing more people to work and thrive in their new urban environments.