Short Supply-chain Markets

The rapid supermarketisation of the world’s food markets, facilitated by the growing number of free-trade and investment agreements, is slowly but surely marginalising, and taking over the spaces of, millions of people whose livelihoods rely on the food sector.

At the same time, by manipulating food and agriculture prices, this is reducing access to adequate and nutritious food. Supermarkets make basic food products expensive while promoting an explosion of junk food—flooding cheap, processed food into local markets and adversely affecting public health. This shift towards supermarkets is not a solution for feeding growing populations. Rather, it will only transfer control over and access to food to a handful of global retailers closely linked to agro-industry.

The bulk of the food consumed in the world (70%) is produced by smallholder producers and workers. Most of this food is channeled through what we propose to call “territorial markets”, as explained below. Only 10-12% percent of agricultural products is traded on the international market, particularly 9% of milk production, 9.8% of meat production, 8.9% of rice, and 12.5% of cereals. The idea of “connecting smallholders to markets” is misleading: globally more than 80% of smallholders operate within territorial markets that provide for local food security and nutrition. We want these markets to be recognised, supported and defended by appropriate public policies.

Territorial Markets

We propose such markets be designated “territorial” because they are all situated in and identified with specific areas. The scale of these areas can range from the village up to district, national or even regional, so they cannot be defined as “local”. Their organisation and management may incorporate a weaker or a stronger dimension of formality but there is always some connection with the competent authorities, so they cannot be defined as purely “informal”. They meet food demand in different kinds of areas: rural, peri-urban and urban. They involve other small-scale actors in the territory: traders, transporters, processors, traders.

Women are the key actors here, and so these markets provide them with an important source of authority and of family revenue

How these territorial markets diverge from the global food supply systems …

  • they are directly linked to local, national and/or regional food systems
  • the food concerned is produced, processed, traded and consumed within a given “territory”
  • the gap between producers and end users is narrowed, and the length of the circuit is shortened
  • they perform multiple economic, social and cultural functions within their given territories – starting with but not limited to food provision.
  • they are the most remunerative for smallholders since they provide them with more control over conditions of access and prices than mainstream value chains.
  • they contribute to the territorial economy since they enable a greater share of value addition to be retained and returned to farm level and local economies; fighting rural poverty and creating employment.

Markets linked to territories exist throughout the world. They are overwhelmingly the most important spaces of food provision in regions like Africa, Asia, Latin America, and the Near East. They are gaining importance In Europe and North America.  Yet they have been ignored in research, data collection, and public policy decision-making and investment, so their functioning is insufficiently understood, supported and protected. This explains why there is not yet a single agreed term to describe them. The territorial approach – of which markets are an important component – is widely and increasingly used in the context of natural resource management, development planning, managing evolving relations between rural and urban spaces, and promoting decentralized sub-national government.

Policy Shift Urgent

Despite their importance, informal markets are often overlooked in data collection systems which impacts negatively on the evidence base for informing public policies. As women smallholders mostly operate in informal markets, their essential contribution to food systems, including food distribution, and economic growth remains largely invisible in trade and development policy-making processes and, they face particular socio-economic barriers in accessing resources and marketing opportunities resulting in further marginalization and violation of their rights. Given their importance for food security and smallholder livelihoods, public policies and investments should be oriented towards strengthening, expanding and protecting local and domestic peasant-fed markets.

We call on the United Nations Conference on Trade and Development (UNCTAD) and its member states to support the collection of comprehensive data on local, domestic and informal, both rural and urban, markets linked to territories to improve the evidence base for policies, including sex-disaggregated data, and incorporating this as a regular aspect of national and international data collection systems. We recommend transparent and fair pricing of all agricultural products that provides full remuneration for smallholders’ work and their own investments, including rural women.

Pricing policies should give smallholders access to timely and affordable market information to enable them to make informed decisions on what, when and where to sell, guarding against the abuse of buyer power, particularly in concentrated markets. We demand public and institutional procurement programs that allow smallholders to rely on regular and stable demand for agricultural products at fair prices and for consumers to access healthy, nutritious, diverse, fresh and locally produced food, including during crises and conflicts. We want these procurement programmes to service public institutions such as schools, hospitals, prisons, homes for the elderly and public servants’ canteens, by providing food produced by smallholders through participatory mechanisms involving them in the process. We reiterate our calls for a permanent solution to the public stockholding issue – considering the imbalances in the domestic support allowances accorded to developed countries – and our commitment to building these robust public and institutional procurement programs. For these to succeed, we remind national governments that they must guarantee fair and equitable access to land, water, territory, and biodiversity, referring them to the FOA Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security.

Food is a human right and must not be treated like a simple commodity. We call on the 2016 UNCTAD Conference to rethink how it addresses the issue of food and its relationship to trade and development. Peasants are at the heart of food production and what we urgently need is Food Sovereignty – requiring the protection and renationalisation of national food markets, the promotion of local circuits of production and consumption, the struggle for land, the defense of the territories of indigenous peoples, and comprehensive agrarian reform — not the false promises of Green Revolution-driven input; and capital-intensive and dependent production systems. These operate under the false premise of competitiveness that only works when it undermines the livelihoods of farmers elsewhere.

We remind governments that they have obligations for providing quality public services to all (health, education, etc), and that these obligations cannot be fulfilled without fair prices that protect small-scale farmers from an international trade system that currently only serves the interests of agribusiness and corporate traders.