Improving Urban Food Supply and Distribution in Developing Countries

Gideon Onumah, Natural Resources Institute, University of Greenwich; and Michael Hubbard, School of Public Policy, University of Birmingham

Contents

• Introduction
• Key Issues and Principles
• Basic Road Map
• Best Practices and Examples
• Resources
• Notes

Abstract: Urban food supply is fast becoming a major challenge yet many city authorities still lack a coherent policy for tackling it. The authors describe the characteristics of successful food supply and distribution policies and provide guidelines for city authorities to pursue good management practices. These include tips for devising useful performance indicators, strategies for consulting with stakeholders and criteria for distinguishing between public and private roles. The lessons are illustrated with two best practice cases.

I. Introduction

Developing countries face a major challenge to feed fast growing urban areas with high levels of poverty. Rapid urbanisation increases dependence on distant food supply sources. Rising urban poverty means that a growing number of urban households cannot afford the food needed to meet minimum dietary requirements. Liberalisation of agricultural marketing has reduced the role of the state in food production and distribution. Hence, achieving the food security goal of access to food by all households must be based on a well-functioning private trade in food. These conditions indicate a pressing need for efficient, low-cost food supply and distribution (FSD) systems. City authorities therefore need to formulate coherent and effective FSD policies.

The benefits of urban FSD policy are:

• Economic – promoting efficient distribution so as to ensure lower prices and stable supply of food to urban consumers and also higher producer prices for growers and processors.
  
  
• Social – minimising food insecurity in low-income urban households and improving co-operation and understanding between city authorities and urban farmers, processors and traders.
  
  
• Environmental – eliminating food-related health problems through better waste disposal and improving the urban environment by planning markets so as to reduce traffic and cut transportation distances.

II. Key Issues and Principles

Urban FSD policy is the set of objectives, the required plan of strategic action, the management system and the financing plan designed by city authorities to FSD systems that improve availability of good quality food at low cost to all urban households, with low environmental costs.

Urban FSD policy should focus on three areas:

1. Food supply: urban and peri-urban food production; transport infrastructure and services for rural-urban food movements and food imports;
   
   
2. Food distribution: urban wholesale and retail markets, intra-urban transport, services to market agents, informal food sales;
   
   
3. Public health and environment: food waste disposal management, traffic and noise levels, food safety.

A well functioning urban FSD system is dynamic in that it:

• responds to changes in the amounts of food required, and to consumer preferences for types of food;
  
  
• steadies prices at a level representing the wider regional or international balance of supply and demand, through encouraging inter-seasonal storage and trade;
  
  
• makes good quality and competitively priced food accessible to all residents.
  
  
• brings together private traders and city authorities to collaborate in promoting trade and overcoming obstacles to trade.

In designing urban FSD policy, city authorities need to ensure that:

• Policy goals reflect the vision for the city (what the citizens and policy makers wish for the city in the foreseeable future) to ensure broad acceptance by farmers, processors, traders and customers and by the departments implementing policy
  
  
• Policy objectives are feasible, credible and consistent with central government priorities,
  
  
• Specific tasks and measurable targets are set for identified agencies
  
  
• The many agencies and groups who are involved in urban FSD systems take part in the policy process

Policies should address what traders need at urban markets2

• Responsive and efficient management of markets
  
  
• Markets that offer: adequate space for stores, protection from the elements; security for persons and property and adequate lighting and electrical systems.
  
  
• Adequate parking space allowing for easy flow of produce in and out of markets.
  
  
• Clean and dry trading environment; waste disposal facilities; clean toilet facilities and adequate water supply.
  
  
• In-market storage facilities, including cold stores for butchers and fishmongers; loading and unloading facilities; decent eating places and overnight sleeping facilities (especially for transporters).
  
  
• Child day care facilities; first aid, post, telephones, fax.
  
  
• Access to banking facilities and to market information and credit.
  
  
• Market regulation and simplified documentary procedures and requirements.

Why are many cities facing growing FSD problems?

Cities in many countries are growing more rapidly than the management of the food supply and distribution systems. Particularly in developing countries, many cities were designed for much smaller populations and lower traffic densities than they now have to cope with. Roads, market places, water, sewerage and power are often run down in city centres, and practically non-existent in the surrounding informal settlements. City regulations governing trade are often outdated and discourage the informal trade on which many urban livelihoods now depend. As a result, city authorities are faced with increased conflict, congestion, poverty, health problems and environmental risks. Five main factors contribute to this problem:

1. Lack of FSD focus in urban planning: Most urban authorities give low priority to FSD issues and lack a clear policy framework, focusing instead on public health, education, housing, environment, sanitation and traffic control but failing to see how these impact on FSD systems.
   
   
2. Lack of consultations: City authorities often perceive food traders as a nuisance because of the garbage generated and the over-spill of their market stalls. When key decision-makers fail to consult with traders in designing FSD policies, the results are, not surprisingly, often inappropriate and unsuccessful. The Bouake Wholesale Market in Ivory Coast is a recent case: despite the substantial investment made, local traders were not adequately consulted in its design and the new market is under utilised. Likewise, in Accra, Ghana, the involuntary transfer of traders to newly built markets provoked conflict and boycott of the markets.
   
   
3. Fragmentation of responsibility for FSD: Responsibility for providing infrastructure and support services for food suppliers and distributors (such as water, toilets, parking, information) is often fragmented between a number of public and quasi-public agencies controlled at different levels of government, and with some overlap at the city level. Policy co-ordination and accountability are often weak as a result and interdependent tasks are not integrated in a single budgeting and planning framework.
   
   
4. Weak city authorities: In many developing countries, city authorities are hindered by lack of legal authority and inadequate financial resources to perform their statutory functions. They are dependent on central government for legislative authority to raise revenue, acquire land and control development. Financial constraints have often been further squeezed by tightened central government finances during structural adjustment programmes.
   
   
5. Geographic fragmentation of city authorities: The influence of history and politics on the demarcation of local government boundaries often splits jurisdiction between a number of local authorities varying in their size and legal status. This limits the capacity of individual city authorities to regulate physical development of urban settlements and ensure provision of essential infrastructure and services – a case in point is the Calcutta Metropolitan Area with its population of 13 million and 107 local authorities. In some cases, boundaries are extended to embrace new settlements – but usually only after the settlements have already been sprung up, thus limiting the ability of the city authority to ensure an adequate infrastructure.

III. Basic Road Map

Creating an effective FSD system involves five main policy components:

1. Understanding the impact of city authority functions on FSD issues
2. Distinguishing the appropriate roles of the public and private sectors
3. Devising performance indicators to improve monitoring and evaluation
4. Priorities for city authorities to improve their management practices
5. Drawing together these components to make good policy

1. Understanding the impact of city authority functions on FSD issues

Many city governments may not expect to have a role in the improvement of food supply and distribution. Some may feel that urban FSD is a central government responsibility. Good national laws are important for improving food safety, and for facilitating trade in food, particularly foreign trade. But city governments have an essential role, particularly in planning and managing city markets, waste disposal, land for urban agriculture and in encouraging productive collaboration with food traders. The table below shows that many of the standard functions the city authorities perform have an impact – direct or indirect – on FSD systems.

Source: Adapted from Davey et al. 1996

2. Distinguishing the roles of the private and public sectors

The first step in allocating responsibility for urban FSD development is to decide which of the needed infrastructure and services should be provided by private businesses rather than public agencies. In principle, facilities and services which can be run as businesses are best left to the private sector. But in poor urban areas private sector investment tends to be low. Planning services, urban roads, regulation and enforcement all require a public responsibility, although private firms are often contracted in to assist in design and implementation.

Recent years have seen private investors taking an increasing role agricultural marketing, with the state stepping back in many developed and developing countries from providing direct agricultural marketing services. In the case of urban produce markets, the traditional practice of city authorities owning and operating is changing quickly. Produce markets can be and are run as businesses, with a variety of ownership and management by private firms, traders associations and public agencies. There is a public role in financing and managing markets only where the private sector is weak, as in many of the poorest urban areas. The Curitiba markets are a current example of collaboration between city authorities and the local community in providing market services (see Best Practices below). The following table presents a range of FSD functions and, through examining their characteristics, identifies the appropriate division of providers and responsibility.

Source: Authors
Note: CA = city authority

3. Devising performance indicators for monitoring and evaluation

FSD policy must have targets which are measurable, set within a specified time frame, with well-identified implementing agencies if its impacts are to be assessed. An example of an objective which is too broad is 'Elimination of food related health problems'. It is unclear whether it targets some or all food related health problems. Its feasibility is doubtful. It also has no time frame for implementation and leaves scope for laxity in monitoring performance. It could be redefined by focusing on particular food related health problems, and setting targets. Examples of well-stated objectives are:

• 'Reduce incidence of 'street-food' related disease outbreaks in the city by 50% within 5 years'
  
  
• 'Reduce incidence of malnutrition among children under 5 years in defined slums by 20 per cent by the year 2001'
  
  
• 'Double the space available for irrigated vegetable production in the city within five years'
  
  
• 'Reduce interseasonal price difference of rice in the city to 20% by 2001'

Once the objectives have been set, indicators are essential for monitoring progress in achieving them. As an example, indicators used for assessing overall progress towards the goal of ensuring stable supply of food to all people in the municipality include:

1. inter-seasonal variation in retail prices of specified food items – based on price data usually collected by ministries of agriculture and central statistics department (for compilation of
   inflation data). Low price variation indicates relatively stable supplies.
   
   
2. prices of food items in cost of living index for low-income urban districts
   
   
3. distribution margins, measured as the ratio of retail to farm-gate prices based on data usually collected by Ministry of Agriculture. Generally, decline in the ratio indicates improving cost-efficiency in distribution.
   
   
4. level of official and unofficial 'taxation' paid by traders and transporters, to avoid bureaucratic red tape, as reported by traders and transporters.
   
   
5. costs of specific services to traders, such as transport, insurance, packaging, licensing, as reported by traders.
   
   Such a level of performance monitoring clearly requires reliable statistical information - the collection of this can be structured as part of the process of consultation and interaction with traders, farmers, consumers and associations.

4. Priorities for city authorities to improve their management practices

Although tight resources certainly make FSD policy more difficult to implement, the most important task is for city governments to do better what they are already doing - by improving management and methodology. Effective management practices require consultation, networking, communication and accountability.

To ensure that city executives and officials are well informed on FSD issues, there should be:

• interaction between FSD stakeholders and city personnel at all levels of the organisation;
  
  
• management information systems that facilitate flow of information between frontline personnel and executives. This should include effective reporting systems, regular consultations among staff and wide dissemination of policy-related information in the organisation using, for instance, newsletters;
  
  
• participation by personnel at all levels in seminars, workshops and conferences on urban FSD issues.

To enhance the credibility of city authorities, they need to ensure:

• Openness and transparency, especially in the award of contracts, and accountability to the people in the municipality. There is much experience of available to learn from, such as the reforms in the Calcutta Municipality in the 1980s initiated by the West Bengal Legislative Assembly to reduce corruption.

To facilitate 'selling of its vision and programmes', city authorities must ensure:

• Competent appraisal (technical, economic and financial) of proposed investments in FSD infrastructure and services;
  
  
• Proposals are 'packaged' effectively, highlighting particular components of overall programmes to agencies most suited to undertake them. Packaging should also ensure that benefits from adopting this vision are as closely aligned to the interests of the target agencies and actors as possible.

To be trader-friendly, and to be seen as such, city authorities need to:

• Strengthen and encourage representation of traders associations on planning committees;
  
  
• Promote regular interactions with traders;
  
  
• Disseminate policy goals, objectives and other related information as widely as possible among food traders (using the mass media where necessary).

To enhance co-ordination and performance by public agencies, city authorities should:

• Actively seek legal reforms that clarify the roles of various public agencies.
  
  
• Clearly identify departmental responsibilities affecting urban food marketing;
  
  
• Maintain strict arms-length relations with autonomous units managing commercial facilities;
  
  
• Establish a lean, sharply focused FSD policy unit manned by technically competent personnel to co-ordinate internal policy formulation, implementation and monitoring as well as relations with external agencies and stakeholders (as shown in figure 4.1); and
  
  
• Provide technical training, adequate motivation and monitoring structures to promote competence and reduce the likelihood of corruption. (See World Development Report 1997 for further discussion).
  
  
• Share experience on FSD policy developments among city authorities, nationally and internationally. Particular emphasis should be placed on sharing experience in managing broad democratic participation in policy decision making and monitoring, and in strategies for winning funds from central government and multilateral funding agencies to finance urban development projects.
  
  
• Create a concise FSD policy manual for city authorities in the country

5. Key pointers for making good policy

Drawing together the above components - of understanding impacts on FSD, distinguishing public-private roles, devising performance indicators and embracing good management practices - four principles emerge which should guide the policy-making process:

Principle 1: Encourage consultation and participation

Much of the benefit of FSD policy comes from the ongoing consultative and problem-solving process which it creates. Influenced by the long history of conflicts between urban traders and city authorities, this approach encourages broad participation by all key stakeholders and depends on well-informed and credible leadership that is able to 'sell its vision and programmes'. It reflects some of the lessons from the experience of Birmingham City Council in promoting the food trade in the city (see Best Practices below).

City authorities can promote broad participation by:

• Ensuring that key stakeholders, especially consumers, traders, market managers, transporters and street food sellers are represented on planning committees responsible for development of urban food marketing systems;
  
  
• Promoting links with academic, research and consultancy agencies (local and international) to obtain studies, independent opinion and lessons from experience
  
  
• Encouraging public and media scrutiny of plans developed by city authorities.

It may be argued that broad participation can slow down the policy process by creating opportunities for dissatisfied groups to oppose change. This is particularly the case if city authorities have difficulty in 'selling their visions and programmes' or where political expediency is the primary consideration. The cost of such delays may, however, be more than compensated by potential benefits from avoiding costly failure of policy interventions. Cases of poorly patronised new markets (like the Bouake Wholesale Market in Ivory Coast) and political disturbances associated with relocating traders to new markets (as in Accra) underline the importance of encouraging broad participation in the policy process.

Principle 2: Use the tools available

Developing an FSD policy motivates city authorities to analyse issues and implement interventions using the instruments under their control, including regulation (bylaws), finance (investments, subsidies and credit facilities), education (training and information campaigns) and policy dialogue with public and private organisations. City authorities can also lobby central government to use fiscal incentives (e.g. tax waivers) to encourage private investment in market infrastructure, storage and trade.

Principle 3: Promote competition

This may require reducing the influence which particular large traders have in the city authority. An observation made two decades ago remains appropriate: 'Municipal authorities may be dominated by local commercial interests and these often impede the adoption of efficient marketing…One step in improving urban food supply channels is to break group wholesaler monopolies sheltering under restrictive municipal regulations.' (Abbott and Makeham 1979:51). FSD policy should avoid protecting large-scale firms by licensing controls or tax reductions. In East and Southern Africa in recent years regulations protecting large-scale millers, butchers and traders have been abolished. Employment in the FSD system has increased as a result, with the entry of numerous small scale traders, millers and butchers into the market. Consumers have ultimately benefited from lower prices and increased variety.

Principle 4: Embrace diversity

Avoid letting FSD policy be dominated by fashions for 'modernisation' or 'preserving tradition'. Cities all over the world have increasingly mixed populations in wealth and cultures and are home to production and distribution systems which combine the modern and traditional. This diversity should be seen as a strength. Larger firms bring market stability and can reduce costs in bulk operations; smaller operators increase variety and consumer access. Instead of promoting either modernisation or traditional arrangements, the principle should be to encourage whichever development lowers the cost of living and stimulates employment growth in the city.

Using these principles, city authorities can tackle urban food supply and distribution problems in a wide range of ways. The table below illustrates, with examples of typical problems, the strategies and partners for collaboration that arise from such an approach.

Source: Authors and FAO (1999a)

IV. Best Practices and Examples

Birmingham City Council: lessons from planning mistakes guide future redevelopment plans for food wholesale markets

The City of Birmingham Wholesale Market was built between in the early 1970s at the historical cite of a wholesale fish market. It is located in the city centre and covers 21 acres and serves a population of more than 3 million in central England. Facilities for each wholesaler include an office and storage facilities combined with sales space and 24-hour direct access for delivery and customer vehicles. There are also facilities at the market for parking, packaging, vehicle maintenance, banks, cafes, and retailers selling shop equipment and packaging materials. There are on-site food inspection, garbage collection and security services.

In 1993 the facilities needed improvement. The choice that the council faced was relocating to a new site or renovating the existing site. Without using a sufficiently extensive consultative process with the users of the market, they chose the latter - a choice which, with hindsight, was a mistake:

• the decline in the role of traditional wholesale markets was underestimated, as supermarkets were growing increasingly dominant.
  
  
• the design did not allow for the larger trucks now used. As a result, traders spend about half their time manoeuvring vehicles.
  
  The Council now plans to relocate the market outside the city centre. It is determined not to repeat the mistakes of 1993:
  
  
• the planning process involves increased consultation with traders (including the circulation of informative 'Traders Briefings').
  
  
• designs will be based on a long term view of the future, in which 'food parks' are seen to be more appropriate than traditional wholesale markets. Food parks provide flexible facilities for food firms serving niche markets (e.g. specialised fish traders who prepare fish to restaurant specifications for delivery fresh at a precise time, with orders and payments made over the phone). Successful niche traders combine small scale processing with selling and are able to meet exact orders. Traditional wholesaling, with its walkways to allow buyers to inspect and compare, will play a lesser role in future.
  
  
• the role of the Council in running the market is being examined anew. Markets management will be under a financially autonomous Commercial Services Department, in order to increase commercial orientation and reduce political interference. Units in the new 'food park' are likely to be sold to traders, who will then have a greater collective interest in self-managing the market. The Council's direct role in management will be thereby reduced.

Source: Interviews by authors

Community-based planning and innovation make Curitiba markets a model

Curitiba, a township of 1.3 million people in Brazil, has many of the typical problems in poor urban areas: high incidence of poverty, too few resources, homeless children and very few facilities. Under the leadership of its mayor, the township developed a plan to operate 'periodic markets' the success of which has attracted interest from many parts of the world and has, for example, been adopted for poor townships in South Africa.

The model centres around a plan offering simple, practical ways to improve produce marketing and a path into the economy for the excluded poor. The main features of the 'periodic market' concept are: They operate on certain (stipulated) days of the week; involve permanent and predominantly mobile traders and encourage selling or provision of all types of goods and services (from vegetables to phone cards, fertiliser to furniture and shoe-shine to vehicle repair services). Markets are sited within convenient reach of members of the community. Postal and health facilities are brought to the market where cultural and public information campaigns also take place.

The multiplicity of activities reduces the cost per trader of market facilities, thus reducing the burden of management by the community. The plan also encourages innovation. For instance the introduction of mobile public health services in one such market increased local child immunisation rates from 60% to 90% within four months.

Source: The Market Society (1997)

V. Resources

Abbott J and Makeham J (1979) 'Agricultural Economics and Marketing in the Tropics', Longman, London.

Beall J and Crankshaw O (1999) 'Urban governance, partnership and poverty in Johannesburg', International Development Department, University of Birmingham, Birmingham.

Davey K (1996)'Urban management: the challenge of growth', Avery Ashgate Publishing Limited, Aldershot, England.

Devas N (1999) Urban governance, partnership and poverty: who runs cities?', International Development Department, University of Birmingham, Birmingham.

Dia I. (1997) 'African urban consumers and food supply and distribution',Food into cities collection, DT/AC/02-99E, FAO, Rome.

Dutta S and Amis P (1999) 'Urban governance, partnership and poverty in Ahmedabad', International Development Department, University of Birmingham, Birmingham.

FAO (1998) 'Feeding the cities' excerpt from The state of food and agriculture, 1998, Food into cities collection, DT/40-99E, FAO, Rome.

FAO (1999a) 'Urban food security and food marketing: a challenge to city and local authorities',Food into cities collection, DT/39-99E, FAO, Rome.

FAO (1999b) 'Methodological approaches to analysis of food supply and distribution systems',Food into Cities Collection, FAO, Rome.

FAO (1999c) 'L'etude des SADA des villes: guide methodologique et operationnel',Food into Cities Collection, FAO, Rome.

Hubbard M (1995) 'Improving Food Security: a guide for rural development managers'. London: IT Books.

IFPRI (1998) 'Urban challenges to food and nutrition security: a review of food security, health and caregiving in cities'. Discussion paper 51. Washington: International Food Policy Research Institute.

Makhura M.T. (1998) 'The development of food security policy for South Africa: a consultative process', Food Policy Vol.23 No.5 pp.571-585.

Mbiba B (1995) 'Urban agriculture in Zimbabwe', Avery Ashgate Publishing Limited, Aldershot, England.

Nunan F (1999) 'Urban organic waste in India: the role of informal markets'. School of Public Policy, University of Birmingham.

Rose A and Lawton A (1999) 'Public services management', Financial Times/Prentice Hall, Harlow.

The Market Society (1997) 'From township to city: a plan for Katorus', The Market Society, Muizenburg, South Africa.

Tollens E (1997) 'Wholesale markets in Africa: diagnosis, role, advantages and elements for further study and development. Food into Cities Collection, DT/AC/05-97E, FAO, Rome.

Wilhelm L (1997) 'Food supply and distribution networks and the functioning of markets in Africa', Food into Cities Collection, DT/AC/03-97E, FAO, Rome.

World Bank (1997) 'World Development Report 1997', World Bank, Washington.

Notes

1. Condensed from G.Onumah & M.Hubbard (forthcoming),Urban Food Supply and Distribution: Policies Addressing Urban Poverty. DT4199E, Food into Cities Collection, FAO, Rome.
   
   
2. Food and Agriculture Organization of the United Nations (FAO). 1999a. 'Urban food security and food marketing: a challenge to city and local authorities'. Food into Cities Collection. DT/39-99E. Rome: Food and Agriculture Organization of the United Nations.

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