Chapter

Food Supply and Distribution Systems to Cities 1

9

1.1 What are supply and distribution systems to cities?

Food1 supply and distribution systems (FSDSs) 1.2 Understanding food supply and to cities are complex combinations of distribution systems to cities activities, functions and relations (production, 2 handling, storage, transport, process , package, The purpose of the analysis of FSDSs is to 3 wholesale, retail , etc.) enabling cities to meet identify the strengths and weaknesses of each their food requirements. These activities are component of FSDSs with the factors performed by different economic agents influencing their efficiency and dynamism. To Chapter 1: FSDSs to Cities (players): producers, assemblers, importers, improve FSDSs, it is essential to: transporters, wholesalers, retailers, processors, • understand the structure of FSDSs; 4 shopkeepers, street vendors , service providers • interpret how FSDSs operate; (credit, storage, porterage, information and • identify and analyse the constraints extension), packaging suppliers, public encountered by the various FSDS players. institutions (e.g. city and local governments, public boards, Ministry of 1.2.1 Key elements of food supply and , Ministry of Transport) and private distribution systems to cities associations (e.g. traders, transporters, shopkeepers and consumers). The various functions performed by an FSDS can be grouped in two subsystems: Players need , facilities, services 1. the “food supply to cities” subsystem and laws as well as formal and informal includes all the activities that are required to regulations to govern their decisions. This produce food and bring it to cities: definition lends itself to the “system" concept: production (including urban food each element influences the other elements in a production6), imports as well as rural- and system of cause and effect, and reciprocal periurban-urban linkages (processing, 5 relationships . storage, assembly, handling, packaging, transport, etc.); Because the provision of food to a growing 2. the “urban food distribution” subsystem city implies food being produced in and includes all the formal, informal, traditional transported from rural and periurban areas or and modern activities that are required to imported, an analysis of FSDSs must have an distribute food within the urban area: appropriate geographical limit. A system design wholesale, intra-urban transport, retailing, also needs criteria to characterize what issues street food, restaurants, etc. are directly relevant. 10 Studying FSDSs to Cities ... • alleviating povertyandimprovingfood • local supplyoffresh,nutritiousfoodsuchas because itcancontributeto: has beingreceivingincreasingattention Food productioninurbanandperiurbanareas (see Table1.2). and transportationsystemisnotwelldeveloped especially whenthenationalfoodmarketing important sourceoffoodforsomecities, Urban andperiurbanagriculturecanbean production. markets, requiredtoassemblemarketable roads topotentialproductionareasandrural production arelimitedalsobylackofrural be accessible.Privateinvestmentsinfood able toundertake.Inaddition,marketsmaynot skills, manpoweraswellcreditmaynotbe safe water, fertilizers,pesticides,machinery, which producersoftenlackingsuitableland, increasing privateinvestmentsandefforts (see Tableimported requires 1.1). This be moredistantandlessproductive)and/or possible), fromnewlands(whicharelikelyto presently undercultivation(ifhigheryieldsare More foodwillhavetobeproducedinareas Production 1.2.1.1 “Foodsupplytocities”subsystem security throughconsumptionofself-grown vegetables anddairyproducts; poultry, small ruminantmeat,fruits, Source: Argenti, 2000. Source: Argenti, • simple, coherentandwellunderstoodfoodproduction,processing marketingregulations. • better packagingandhandlingmethodstoreducefoodlosses; • market informationforbetterproductionandmarketingdecisions; • appropriate arrangementstomanageescalatingquantitiesofwastefrom marketsandslaughterhouses; • private investmentinfoodshops,marketimprovement,transportfacilities, etc.; • food producermarkets,itineranttradersandretailerassociationsinlow-incomedistricts; • facilities forspontaneousmarkets; • retail outletseasilyaccessible,adequatelyequippedandwellmanaged,particularlyinlow-incomeareas; • additional wholesalemarketsandslaughterhouseswithplentyoffacilitiesprofessionalmanagement, awayfromcity • enough parking,loadingandunloadingfacilitiesforagrowingnumberoffoodtrucks; • sufficient supplyoffuelwood forfoodprocessingandcooking; • water supplycommensurateinquantityandqualityforfoodproduction,processingdrinking; • measures toprotecthumanhealthandenvironmentfromcontamination; • land-use managementtokeepsuitablelandinurbanandperiurbanareasforefficient andsustainablefoodproduction; requirements are: Increasing quantitiesandvarietiesoffreshprocessedfoodare requiredtomeettheneedsofurbandwellers.Other Cities NeedMoreandFood Tab centres; le 1.1 processing. The practiceoflivestockraisingin usedfordrinkingandfood can contaminatefood,soilaswellwater chemicals, solidandliquidwasteinfarming contamination. The inadequateuseof environment ofcitiesmaycausefood soil resources.Foodproductioninthepolluted populated areassharingthesameair, waterand which stemfromitscloseproximitytodensely with urbanandperiurbanfoodproduction There areanumberofproblemsconnected • productive useofsuitableandunusedopen • cost-effective environmentalmanagement growing population. Urban andperiurbanfoodproductionhelpscitiesfeedtheir watershed management. space, contributingtobio-diversityand fertilizer; through productiveuseoforganic wastefor generation; products, employmentandincome and close to urban areas may generate health • appropriate arrangements to use waste from problems to residents. While many of the urban markets and slaughterhouses as problems could be solved by information and fertilizers; extension assistance, CLAs have responded by • simple, coherent and well understood food destroying food crops and evicting food production regulations. producers from public lands under cultivation. The enhancement of food production also For some needs of food producers, see A4.1. requires: 11 • land-use management to keep suitable land Imports for efficient and sustainable food production; • measures to protect human health and Cities depend to a varying extent on imported environment from contamination during food. Imports require infrastructure, facilities production activities; and services, an administrative system and • water supply commensurate in quantity and regulations. Issues of relevance to the analysis quality; of FSDSs are: the enforcement of import control regulations for health and environmental purposes, the efficiency of the administrative system for clearing imported goods, dockside storage conditions, the control of imports by importers, etc. Chapter 1: FSDSs to Cities

Rural- and periurban-urban linkages7

Once produced, food products need to be assembled, prepared, packaged, stored, processed and transported to urban areas (see Figure 1.1). These functions require skills; assembly markets in rural and periurban areas; handling, packaging, storage, processing and Twenty percent of the Colombo Metropolitan region is transport facilities; credit to transporters and occupied by paddy fields and 35 per cent by highlands crops. Paddy is grown mainly for self consumption. traders; market information and extension for Highland crops, particularly tropical vegetables and fruits, production and marketing decisions; are grown for the urban market. These products have strong demand. During the last two decades many paddy appropriately enforced legislation and fields have been converted into growing highland crops, regulations. All such infrastructure, facilities especially leafy vegetables. At the same time, some lands and services need to be efficiently provided have been lost to urban housing and factory construction, especially in Colombo. This trend has been on the and managed. Otherwise, the various costs increase. relating to each of the above elements will be higher than necessary. Post-harvest food losses can be as high as 35 per cent in perishable food products. Table 1.2 Extent of Urban and Periurban Land Used for Food and Agricultural Products in Selected Cities

Country Land used for food and agricultural products

Bangkok (Thailand) 60% of the land in the metropolitan area is in agriculture. Beijing (China) 28% of the city area is used for agriculture. Beira (Mozambique) 88% of the green spaces in the city are used for family agriculture. Madrid (Spain) 60% of the land in the metropolitan area is used for agriculture. San Jose (Costa Rica) 60% of the metropolitan area is used for agriculture. Santiago de los Caballeros (Dominican Republic) 15% of the urban area contributes to less than 5 per cent of the city’s food need. Zaria (Nigeria) 66% of the city area is cultivated.

Source: UNDP and FAO. 12 Studying FSDSs to Cities ... feature. supplement localproductionshortfallsarearegular rainwater. Foodimportsintothe Accra Metropolisto performs erraticallyfromyeartodependentmostlyon from theSavannahareas. The arableagriculturalsector from theForestzones, Transitional zonesandfurthernorth production area.Itmustrelyontransported The Greater Accra regioninGhanaisadeficitfood handling costscanbesignificant. not amounttomuchbutthetotalofallsuch out again.Eachindividualhandlingcostwill loaded andunloaded,putintostoretaken produce willhavetobepackedandunpacked, grading. At allstagesinthemarketing chain Preparation includescleaning,sortingand Produce cannot besold. at highercosts.Otherwise,thesefoodproducts collected fromalarge numberofsmallfarmers that marketablefoodproductsneedtobe traders. Lackofruralassemblymarketsmeans supplies andtheencounterofproducers both theconcentrationofmarketablefood Assembly marketsinproductionareasfacilitate Food assembly Increasing foodquantities RURAL areas preparation T Processing Handling Packaging Storage Preparation Assembly ransport and food handling always beconsidered. packaging madewithlocalmaterialsshould marginal. The possibilityofusingimproved because thebenefitsofusingitwillbe produce willnotrequireexpensivepackaging significantly reducelosses;nonperishable packaging willbeusedmorewhenit charged onsuchcrates.Sophisticated in acountrywherehighimportdutyis in acountrywheretheyaremanufacturedthan likely tobeusedmoreforproducemarketing benefits ofusingit. Thus, plasticcratesare marketing chainwilldependonthecostsand a particularcountryandfor marketing chain. The typeofpackagingusedin and consumers,dependingonthelengthof several timesontheirwaybetweenproducers Food productsmaybepackedandrepacked final saleprice. attractive totheconsumer, thusincreasingthe retail saleandtomaketheproducemore divide theproduceintoconvenientunitsfor produce. Finally, packagingcanbeusedto produce. Second,itprovidesprotectionforthe convenient wayofhandlingandtransporting serves threebasicpurposes.First,itprovidesa Most produceneedspackaging.Packaging Food packaging URBAN areas T Storage Processing Preparation Re-packaging ransport Rural-Urban Linkages Figure 1.1 Food storage Food processing The main purpose of storage is to extend the Processing means changing a product’s form, availability of produce over a longer period presentation and substance. Processing may than if it were sold immediately after harvest. occur several times before a given foodstuff is The assumption behind all commercial storage consumed, in advance (after harvesting) or just is that the price will rise sufficiently while the before the product reaches the consumer (in a product is in store to cover the costs of storage. food processing unit, a restaurant or as street Such costs will vary, depending on the costs of food). To meet the demand for processed 13 building and operating the store but also on the products, there must be: cost of capital used to purchase the produce • a market for the processed product; which is stored. If a store is used to its • stable quantities of adequate raw material, maximum capacity throughout the year costs inputs and safe water; will obviously be much less than if it is only • processing technology; used for a few months and is, even then, kept • infrastructure, facilities and services, half empty. including appropriate packaging; • management skills and specific marketing arrangements, logistics and practices.

Processing costs can vary according to the efficiency of the organization doing the processing, the processing facility's throughput Chapter 1: FSDSs to Cities and the frequency of its operation. It will also vary according to the organization's costs which can depend on factors such as fuel costs, depreciation costs, import duties, taxes and wages.

Cold-storage facilities are usually insufficient and rent is Processing activities can be an important often high. The few cold-storage rooms built by market source of jobs and income, particularly for managers are often inefficient, mostly because of women (see Table 1.3). inappropriate design, or do not work at all, for lack of proper maintenance. Perishable food products, therefore, deteriorate rapidly.

Table 1.3 Importance of Street Food in Selected Cities

City Consumption Value of trade

Calcutta (1995) Approx 130 000 street food vending Sales estimated at US$ 60 M per stalls. 33% of the customers purchase year. street each day.

Bangkok Street foods were found to contribute Sales of registered street food up to 40% of total energy intake, 39% businesses exceed US$ 98 M per of total protein intake and 44% of total year. iron intake for the residents of Bangkok. 88% of total daily energy, protein, fat and iron intakes of children 4-6 years.

Santiago Chile (1991) Approx 14, 000 vendors. Approx US$ 70 M per year.

Guatemala City (1994) Approx 20 000 vendors.

Abidjan (1995) 700 000 street food meals per day in 1993.

Source: ESNA, FAO. 14 Studying FSDSs to Cities ... organized wholesalemarkets. area, limitingthepotentialbenefits tobederivedfrom Wholesale activitiesareoftendispersedovertheurban For someneedsoffoodtransporters,see A4.1. where theyarehigh. lower wherebankinterestcharges arelowthan owners havetobuytheirtrucks;costswillbe countries whereimportdutiesarehigh. Truck where trucksandfuelarecheapthanin T damage totrucksandisfrequentlyimpassable. the endofaroughroadwhichcausesmuch much lowertransportcoststhanonelivingat close toamainhighwaywillprobablyface farmerliving on thequalityofroads. A farmer andmarket.Buttheywillalsodepend will varyaccordingtothedistancebetween assembly inonecentralarea. Transport costs around tofarmerscollectproducefor carts. Alternatively, tradersmaysendagents produce themselvesorusinganimal-drawn be thefarmerorhislabourer, carryingthe In manycountriestheinitialtransportationmay Rural- ransport costswillbelowerincountries Frequent road check points and (il)legal and points check road Frequent taxation add expenses and delays in delays and expenses add taxation and periurban-urban transport transport food transport an impedimenttoachievingefficient FSDS. The inadequacyofwholesalefacilitiesisalso Lahore andSantoDomingo. cities throughouttheworld: Accra, Abidjan, Examples oftheseproblemscanbefoundin well asincreasedfoodcontamination. responsible foradditionalcostsandlossesas traders operatinginsuchmarketsarethus and/or badlymanaged.Difficulties facedby and particularlycoldstorage,areinsufficient market expansion.On-marketstoragefacilities, traffic congestionandthereisnospacefor in central,high-densityspots. This increases areas whichurbanexpansionhastransformed or thirtyyearsagoandarenowpositionedin cities. Mostofthemwereconstructedtwenty the increaseinfoodquantitiesconsumedby Many wholesalemarketshavenotadaptedto Wholesale markets market managersandconsumers,see A4.1. For someneedsoffoodtraders,shopkeepers, street foodandrestaurants. retailing (markets,shopsandsupermarkets), credit), formal-informalandtraditional-modern packaging, transport,marketinformationand wholesale, intra-urbanlinkages(e.g.: composed ofthefollowingelements: The urbanfooddistributionsubsystemis 1.2.1.2 “Urbanfooddistribution”subsystem While African cities, with very few exceptions, Intra-urban transport totally lack specific wholesale market facilities, the countries of Eastern Europe and of the Food transport from wholesale markets to retail Commonwealth of Independent States are markets and shops can be expensive because of increasingly realising the need for market traffic congestion, lack of parking place and infrastructure and facilities to support the the distance to be covered. Perishable products transition to liberalized food markets. such as fish, meat and dairy products require appropriate transport facilities to prevent food 15 Markets are often not properly managed and deterioration and contamination. maintained. Funds generated by market fees are not reinvested into maintenance, expansion Retail outlets and better services. This leads to traders feeling that market taxes are not justified and to unrest The traditional food retail sector (public retail when rates are increased. Lack of maintenance markets, spontaneous markets, formal and has been responsible for the burning down of a informal shops and street vendors) is dominant large number of markets, particularly in Africa. and central to improving food retailing in cities. Of the five wholesale markets in Hanoi only Long Bien market was planned, whereas Cau Middle and high-income consumers shop at Giay, Bac Qua, Nga Tu So, Trung Hien while low-income consumers, Chapter 1: FSDSs to Cities developed spontaneously, operating along who can spend as much as 80 percent of their streets in the early morning with no proper income on food, go to local shops, to market market facilities and management. They are all places near their homes or buy from street now located in the inner city, wich makes it vendors. very difficult for foodtrucks to reach markets as traffic jams are the norms and parking space is insufficient. Market and storage facilities are inadequate and poorly maintained, although traders pay a market fee. The result? High food damage and losses, reduced quality of food, especially for fresh foods and, consequently, higher consumer prices than they need be. New market facilities are often badly designed and inappropriately located They thus remain underutilized and the forced relocation of traders may cause unrest

Most informal traders sell in the street because they believe that they can reach more customers. Others do so because they are denied access to market facilities and services, as they are unable to pay market charges. Because of their illegal status, informal traders are often harassed by police. Public markets lack professional management and its continuity. Market authorities have insufficient skilled personnel and are unable to enforce regulations. Consequently, trading in public markets becomes more difficult and costly. 16 Studying FSDSs to Cities ... small traders,entrepreneursand consumers. local economyhaveimportantfinancial implicationsfor or toforcetradersintonewmarkets. These blowstothe and maintenance,poormanagement, fire-hazardpractices over thelastfewyearsbecauseof inadequatestructures Public marketshaveburneddown throughouttheworld little availabilityofpublicfacilities. spontaneously, oftennearslumswherethereis Lima, Peru,80percenthavearisen markets beganonaspontaneousbasis.In Dakar, Senegal,three-quartersoftheretail traffic, healthandenvironmentalproblems.In However, theirunplannednaturemay create important gapinthedistributionchain. the causeofspontaneousmarkets,whichfillan opportunities insatellitecitydistrictsarethus retailers. Lackofspaceornewmarket accommodate theincreasingnumberof existing marketshavebeenunableto rapidly enoughinnewlyurbanizedareasand Public retailmarketshavenotexpanded from streetfoodsellers. to buyvegetables,fruit,meat,eggandfish traders andcustomers.Consumersthusprefer markets havenoparkingfacilitiesbothfor market managementboards.However, most percent ofwhichwereplannedandhave markets inInnerHanoitheyear2000,50 There wereapproximatelyseventytworetail traders, predominantlywomen. municipal police.Mostretailersaresmall-scale cities. They areconsequentlyharassedby cause oftraffic, healthandsafetyproblemsto seen bycityandlocalauthorities(CLAs)asa spontaneous marketsaregeneratedwhich and insecureplaces.Becauseofthis, city centres,areusuallycongested,unhealthy Public retailmarkets,typicallyconcentratedin Public retail markets food pricesthanthetraditionalcornershop. their supplies,andarethusabletooffer lower upon directcontractswithfoodproducersfor foodsales. They usuallyrely supermarkets’ Domestic staplesareonlyasmallpartof manufactured foodproductsandimports. income urbanareasanddistributemainly families, tendtobelocatedinmiddle-high usually caterfortheneedsofhigh-income percent offoodretailsales.Supermarkets since the1970s,theyaccountforonly30 cities, wherethissectorhasdevelopedrapidly developing .EveninLatin American only aminorroleinurbanfooddistribution dominate themodernfoodretailsector, play Supermarkets andhypermarkets,which Modern expansion. do notstimulateself-developmentand low andevennegativereturnswhich,inturn, and managerialexpertise,areresponsiblefor entrepreneurial mentalityaswelltechnical hypermarkets, andthelackofan growing presenceofsupermarketsand competition, mademoredifficult bythe shops competeforthelocalmarket.Such cities, apluralityofsmall,family-runfood In thelow-incomedistrictsofLatin American Food transported byone-tonnepick-ups, whichreachIslamabad the onechargedbytrucks.Producers consequentlydonot trip canbesoldinIslamabad. The otherhighlyperishable Northern PakistanandIslamabadrequirestwodaysfora in 10-12hours,butatcostperkilo sixtimeshigherthan ten-tonne truck.Onlyfruitswhichcanresistsuchalong food andvegetableproducts(like cherries)canonlybe have anincentivetoexpandproduction andonlyrich shops Covering the800KmbetweenHunzaRegionin retailing urban consumerscanafford suchproducts. Informal sector retailing 1.2.2 External and internal factors Many cities have in recent times experienced a steep rise in informal sector retailing The elements constituting FSDSs can be (spontaneous markets, sales from home and influenced vary various external and internal street vendors), which fill an important gap in factors (see Tables 1.4 and A4.2). the distribution chain. Informal retailers are very dynamic and are usually the only source 1.2.2.1 External factors of food distribution in low-income urban areas 17 where planned markets are absent. Informal External factors define the situation within activities are a source of employment and which FSDSs operate. External factors are income for the poor, particularly women and numerous and their importance for FSDSs may the youth. vary from city to city. For the purpose of the study of FSDSs efficiency8 and dynamics, it is Street sellers tend to be seen as a nuisance by assumed that external factors are stable in the authorities, because they cause traffic and short run or their change can be anticipated9. hygiene problems and do not pay taxes. The most important external factors are the following: Street food and restaurants Urbanization Street food and small restaurants are an important and convenient source of cheap • Population growth and their causes Chapter 1: FSDSs to Cities processed food for low-income urban (migration and natural growth); consumers. They are a source of employment • the present and future size of the city; and income for the poor, particularly women • the present and future physical urban (see Table 1.3). Low-income households expansion; increasingly turn to street food in time of • the distribution of population within the economic hardship, but street food and small urban space (by economic and social restaurants can be a source of health problems indicators); because of contamination risks. • possible conflicts concerning the availability of space suitable for food production, processing, storage or distribution activities, or for other socially and economically useful usage; • urban lifestyles.

Table 1.4 FSDS External and Internal Factors

External Factors Internal Factors

• Urbanization; • urban food needs; • Urban consumers’ food consumption and • the economic, political and social purchasing habits; framework; • flow of food products; • legal and regulatory framework; • economic players and their strategies; • institutional framework; • FSD infrastructure, facilities and services; • public infrastructure, facilities and • FSD specific laws and regulations. services; • the regional, metropolitan and city’s urbanistic and spatial characteristics. 18 Studying FSDSs to Cities ... operating costs. can leadtoatomisticcompetitionandhigheraverage has thedisadvantageofreducinginnovativebehaviour, sign ofahealthycompetitivefooddistributionsubsystem,it Although theentryofmoreretailersisgenerallyseenasa margins droppedto6-5percentfromthe10level. prices thanbefore.Manyretailersreportedthattheir The recenttrendisthatfoodwholesalersretailatlower appears tohaveincreasedrapidlyduringthelastdecade. roadside shops.Marketcompetitionattheretaillevel to aninabilitycompetewithfairs,streetvendorsand to citydwellers,buttheirimportanceisbeingreduceddue trade. Seventeenpublicmarketsprovidedailynecessities shops isestimatedatlessthan10percentoftheretail residential areas. The shareofcooperativesandCWE Supermarkets arejustbeginningtodevelopinhigh-income and Co-operativeWholesaleEstablishment(CWE)shops. markets, fairs,groceries,vendors,hawkers,cooperatives, The retailmarketingsysteminColomboincludespublic • level ofpolitical,socialandeconomic • sectoral interventionmeasures(i.e. • general economicpolicies(i.e.policies, • Macro-economic factors(e.g.levelof The economic,politicalandsocialframework stability. development policies); agricultural, trade,fiscal,regionalandurban policies anddevelopmentprogrammes); management, privateinvestmentpromotion economic liberalization,budgetandmonetary development, urbanpovertyandjobs); bought andwhereitispurchased. quality, levelofprocessingthefoodstuffs purchases agivenfoodstuff, thequantity, The analysishelpsdeterminewhyaunit differentiated byeconomicandsocialcriteria. The modelmustbeexplainedand consider thecharacteristicsofanaverageunit. households). An urbanconsumptionmodelwill consumption units(individualsand consumed, butalsoonthetypologyof are conceptsbasednotonlyonthetotal Urban foodneeds,demandandconsumption • increased demandforconveniencefood, • increased demandforcertainfoodproducts • increased numberofurbanconsumers, urban consumers.Changecanresultfrom: patterns whichrepresentthestrategiesusedby consumption modelsandfoodpurchasing social factorsandexpressedintermsof determined bydemographic,economicand modifications. Urbanfoodneedsare continuous spatial,urban,socialandeconomic conditions inacontextwhichisexperiencing terms ofquantity, qualityandhygienic Urban foodneedsmustbemetbyFSDSsin Urban foodneeds occupancy isaslow50percent. The localauthorityhas banned thefairsinevenings following arequestmade because thereislesstimeforcooking. incomes; (meat, fruitandvegetables)duetohigher immigration; because ofnaturaldemographicgrowthor Many retailmarketsinColomboarepoorlydesignedand consequence, pavementtradersandweeklyfairsnear badly located(e.g.themarketatDelkanda)andwere underutilized. Consumersprefer the fairssomarket constructed bytheMunicipalityathighcost. As a markets arecrowdedwhilepublic marketsare by markettraders. Legal and regulatory framework Public infrastructure, facilities and services

FSDS players have to obey laws as well as This group includes infrastructure, facilities formal and informal regulations governing: and services such as transport, communication, property, contracts, players’ behaviour, the tax security, electricity, water, etc., which are regime, rules of enforcement, financial developed for society at large but which are management, etc. used by FSDS players. 19 Liberalization and decentralization The characteristics of rural, periurban and programmes, that may involve sweeping legal urban areas reforms, are often based on an inadequate understanding of the relationship between the The agronomic, spatial and urbanistic Legal and regulatory framework and the characteristics of rural, periurban and urban functioning of FSDSs (see: Cullinan, 1997 and areas determine where food is produced, the 1999; Ferro, 1998). availability of new production areas, their distance from consumption centres, the Institutional framework location of FSD infrastructure within these areas, etc. The institutional framework defines the policy measures and official norms that affect FSDSs Good market management, maintenance and

upgrading are as important as raising revenues. Chapter 1: FSDSs to Cities and how they are to be implemented. It identifies administrative responsibilities pertinent to various aspects of FSDSs and the territorial levels of competence as well as how policy measures and official norms are to be implemented. It covers decentralization, the role of CLAs and private sector organizations (e.g. chambers and associations) - see Tables 1.5 and A4.3, A4.4, A4.5, A4.6 and A4.7.

Hanoi is currently importing from other areas pork, chicken and vegetables (20%), fish and fruits (50%), eggs (60%) and fresh milk (80%). Urban growth also entails the loss of productive land in the suburban areas. Thus, food supplies Table 1.5 will increasingly come from areas further and further Role of Civil Society Organizations removed from Hanoi markets at an obviously higher cost. in Improving FSDSs

• Facilitate the training by CLAs of their members; • explain rules and regulations to members; • promote respect by members of agreed rules and quality standards; • diffuse market information to their members; • collaborate in the design and implementation of local development initiatives; • filter the needs of individual members and air the views of the group; • provide advice to CLAs on specific issues; • assist members to run and manage their businesses better; • identify common problems and solutions; • negotiate lower prices and purchase conditions for inputs and services; • negotiate better prices for own products and lower marketing costs; • exchange technical assistance among members and between associations. 20 Studying FSDSs to Cities ... • tradersfearlosingtheircustomers. • retailers cannotafford theextratransportcosts; • inappropriatemarketdesign; • the rentschargedinnewmarketsaresettoohighfor often resultinunderutilisedmarkets. This maybedueto: Plans todevelopmarketfacilitiesawayfromurbancentres For detailsoftheneedsconsumers,see A4.1 alternative retailoutlets,etc. the retailer, cleanliness,costsofaccessing prices, taste,convenience,creditfacilitiesby and restaurants. Their choiceisdeterminedby markets, shops,streetvendors,supermarkets Urban consumersbuyfoodfrompublicretail and socialvalues. important ofwhichareincome,taste,prices are determinedbynumerousfactors,themost Urban householdsfoodconsumptionpatterns purchasing preference foodconsumptionand Urban consumers’ internal factorsarethefollowing: influence externalfactors. The mostimportant They areaffected bybutdonotdirectly Internal factorsdrivetheFSDSfromwithin. 1.2.2.2 Internalfactors the smallertrader; operations andbehaviouralpatterns. economic understanding oftheplayers’ religion andfamily)helpstowardsan legal andsocialterms(e.g.sex,ethnicgroup, Characterization oftheplayersineconomic, strategies. need tobeexaminedreflectpublicorgroup involved inFSDSsactasplayers,theirpolicies the publicandprivateinstitutionsagencies determine theeconomictradingconditions. As social, individualorgroupfactorsand types ofbehaviourareinfluencedbyeconomic, through variousmeansandstrategies.Such restricting competition)thattheytrytoattain economic activity, reducingrisksand expanding ormaintainingacertainlevelof particular objectives(e.g.earninganincome, distribution activitiesandserviceshave All theplayersinvolvedinfoodsupplyand Players andtheirstrategies markets, butthisisrarelyadequate. Toilet facilitiesarerare and seldomproperlycleaned.Water points,drainage and Market authoritiesusuallyguaranteecleaninginsidethe sewage areusuallyinsufficient. Inadequatelightingin Electrical systemsinmarketsoftengeneratefires. markets exposesuserstoadditionalrisksand increases thelikelihoodoftheft. Food products flows Law and regulations

As food demand increases and is differentiated, Numerous laws as well as formal and informal more food (quantities and varieties) must reach regulations relate directly with FSD activities. urban consumers. This requires changes in the supply conditions, marketing and distribution Laws and regulations are not often complied infrastructure, facilities and services, as well as with by players because they are inappropriate in all other activities through which urban food or insufficiently enforced. In some cases, 21 needs are satisfied. It is essential to understand regulations may become so complex and these flows and their dynamics in order to contradictory that the same CLAs have understand and analyse FSDSs. difficulties understanding and implementing them. This prompts illegal taxation and bribery. Infrastructure, facilities and services Individual FSD activities may not be regulated.

FSD agents need assembly, wholesale and Inappropriate law and regulations can distort retail markets, storage and transport facilities, and reduce the efficiency of FSDSs, increase etc. which have their internal organization and the costs of doing business and retard the dynamism that need to be understood. development of a competitive private sector (Cullinan, 1999).

The rationalization of FSDS may require Chapter 1: FSDSs to Cities appropriate changes in the rules governing them10.

The disadvantages that emerge when good planning, management, inspection and information are absent include: • contamination of land, water and food by inappropriate application of wastewater, solid waste and chemicals for food production; • traffic congestion, air pollution and noise around markets and slaughterhouses due to infrastructure shortcomings; • growing quantities of waste from processing plants, markets and slaughterhouses together with dumping of plastic packaging and wasteburning boost health risks and pollution of water, soil and air; • contaminated food caused by meagre market facilities for water supply, drainage, toilets and sewage; • progressive depletion of forests because of need for fuelwood for cooking and processing. 22 Studying FSDSs to Cities ... 2. beconcernedwithissuesthatareunderthe 1. taketheperspectiveofacity, ratherthanthat The followinggeneralcriteriamaybeuseful: efficiency anddynamism. urbanization, foodsecurityandFSDSs understanding therelationshipbetween areas tobestudiedthosedirectlyrelevant , itisnecessarytodelimitthe Given thenumerousfactorsaffecting urban 1.2.3 The delimitingcriteria relations). purchasing power, foodaccesscostsandsocial which explainconsumerbehaviour(i.e. availability andaccessibilityonthefactors centres onthedifference betweenfood consumer choicegiventheavailablefood. This due tothecurrentFSDSoperationsor actual coverageofnutritionalrequirementsis 1.6) andwhetherthegapbetweenexpected population’s nutritionalrequirements(see Table current urbanfoodmodelcoversthe However, thequestionarisesastohow the dynamics aidintheunderstandingofFSDSs. All thefactorswhichexplainconsumption 4. discussdevelopmentstrategiesratherthan 3. focusonhomogenousgroupsratherthan control ofCLAs of thewholecountry; “how toobtainmarmalade”). food processingenterprises”ratherthan cultivate salads”,“howtodevelopsmall the nexttenyears”ratherthan“howto increase foodproductionbyXpercentin detailed technologicalissues(e.g.“howto households”, “fruits”ratherthan“apples”); households” ratherthan“individual individual units(e.g.:the“poorurban 11 ; water, increasenoiseandthreatenpublic health. an adverseimpactontheenvironment, astheypolluteairand the growingnumberoflorriesrequired forfoodtransport,have spontaneous markets,theincreasing quantitiesofwaste,and The precarioushygieneconditions ofestablishedand administrative level centres maybesetupatthesame involved aresimilarandthedecision-making plan: thetechnicalandoperationalissues to beintegratedintothetransportdevelopment Consequently, marketdevelopmentplansneed markets orthelocationoffuturemarkets. implications forthesuitabilityofexisting a railwaystationwillhaveimportant For example,thedevelopmentofaringroador • their functionallinkswithFSDSs:thisshows • the geographicallevelofinterest:either: • the specificinstitutionsoneisconsidering; • the specificaspectofFSDSbeing • the timeperspective:short-,medium-and according to: limited tothosecapableofinfluencingFSDSs The analysisofexternalfactorsshouldbe How totreat externalfactors less sofortheanalysisofFSDSs. households arerelevantforfoodsecuritybut or foodaccessanddistributionwithin A • define howthestudyofFSDSsshouldbe • identify thedegreeofimportancebetween • compare theeffectiveness oftheFSDSsin This distinctionallowsto: their impactonFSDSs. local); regional, metropolitan,urban,municipaland rural, periurbanandurban(alternatively: considered; long-term; carried out. and nutrition; two distinctareassuchasfooddistribution notably, thosethatarevulnerable; purchasing patternofurbansocialgroups, satisfying foodneedsbydetectingthe detailed analysisofnutritionalconsiderations 12 . 1.3 Efficiency and dynamism of food The efficiency analysis shows how and to what supply and distribution systems degree FSDSs fulfil the above conditions. This analysis usually focuses on factors that can What is FSDS “efficiency”? change. This ability to change is implicit in the internal factors but modifications can also The efficiency8 of a system is its ability to occur among the external factors. produce expected results in relation to resources used. FSDS efficiency relates to the The efficiency analysis must be undertaken on 23 following: different levels because: • qualitative and quantitative: the capacity to • cities are not homogeneous entities, at least supply a city with the quantity, variety and in spatial and social terms. The ability of quality of food products required by the FSDSs to alleviate urban food insecurity must urban consumers; be analysed in terms of social groups or • economic: the capacity to supply the required (economically or nutritionally) vulnerable food products at the lowest possible cost (see urban areas. Thus urbanistic, social, Table 1.7. For a discussion of cost, margins economic, legal and nutritional factors must and their analysis, see A4.8 and Shepherd, be examined; 1993); • to understand the market pricing mechanism • temporal: the capacity to ensure stable food requires the understanding of the market supplies over time. conditions under which products and services are traded plus factors and situations which Chapter 1: FSDSs to Cities influence FSD activities.

Table 1.6 Table 1.7 Recommended Daily Caloric Intakes Food Supply and Distribution Costs

Young Kcal/day Children Farmgate price <1 820 1-2 1150 Produce preparation (cleaning, sorting and grading) 2-3 1350 3-5 1550 Packaging costs

Older Boys Girls Handling costs Children 5-7 1850 1750 Transport costs 7-10 2100 1800 10-12 2200 1950 Product losses 12-14 2400 2100 14-16 2650 2150 Storage costs 16-18 2850 2150 Processing costs Men Light Moderate Heavy Activity Activity Activity Capital costs 18-30 2600 3000 3550 30-60 2500 2900 3400 Fees, commissions and unofficial payments >60 2100 2450 2850

Women Light Moderate Heavy Activity Activity Activity 18-30 2000 2100 2350 30-60 2050 2150 2400 >60 1850 1950 2150

Source: WHO (1985), reported in Hoddinott, J. 1999. What is FSDS “dynamism”? Relationship between efficiency and dynamism

The dynamism of a system is its ability to Efficiency and dynamism are different adapt to changing conditions. This is important concepts. It is possible to have adaptability as urban food security problems stem from without being efficient. For example, informal changes in internal as well as external factors. and spontaneous commercial activities show a The important issues are: capacity to adjust immediately to a changing • the differentiation of supply areas in relation environment. However, poor market and to urban food demand; transport infrastructure may result in loss of • the changing of players’ strategies in line with efficiency, leading to product losses and an changes in the external factors; unnecessary rise in operational costs as well as • adapting structures, infrastructure, facilities health hazards due to poor hygiene conditions. and services to match the growth of the city and rising urban food demand; Economic and social considerations • adapting consumption models and urban consumers’ purchasing patterns to changes in Rationalization of a FSDS may decrease costs urban purchasing power and living standards. and thus improve accessibility, through lower consumer prices, but entail loss of jobs. This Attention should focus on the players’ conflict cannot be resolved by the analyst who behaviour. needs to consider the development priorities set by the state. The analyst may indicate the social and economic costs involved in attaining overall development objectives.

National legislation and local regulations in Rabat required that fruit and vegetables be transported through a series of wholesale markets where apparently unnecessary yet compulsory middlemen, and a series of market taxes, led to higher retail prices.

The Rabat market has a monopoly over supplies to the city. The wholesale market was built in 1974, it has no cold-storage and handling is entirely manual. According to the market administration, the Rabat wholesale market handled 104 000 tonnes in 1994, although the total consumption of the city was

Studying FSDSs to Cities ... estimated at 200 000 tonnes. This suggests either underestimation of the tonnage handled or significant evasion of the market monopoly. Analysis of the supply subsystem reveals that the wholesale market operates under an outmoded regulatory system, which hampers its development 24 and undermine its performance in the FSDSs. The main function of management seems to be the collection of taxes. Facilities are clearly inadequate and there is no uniformity or consistency in produce quality. Consequently, prices lose any significance in terms of quality. This undermines transparent dealings in the market. Free circulation of market information is also hampered resulting in producers being poorly informed about market trends. This contributes to sharp inter-and intra- seasonal price fluctuations (Tollens, 1997). Endnotes such as structural adjustment processes, economic liberalization, administrative 1. This terms include cereals, fruits and vegetables, decentralization and urban growth. New political, root and tubers, livestock products, fish products, economic or institutional arrangements are often etc., both fresh and processed. not accompanied by changes in laws and regulations. These are likely to generate conflicts 2. This term defines all processing units including at local level which take time to be solved. The animal slaughtering. implications of transitional situations for FSDSs must be understood. 3. This terms includes butchers and meat shops, 25 among other food shops. 10. Economic liberalization, and the consequent dismantling of state-run food marketing 4. Street vending covers the sale of fresh food and organizations, created opportunities as well as processed food. In FAO’s terminology, “street difficulties in FSDSs. A proliferation of food” only refers to processed food. spontaneous (informal) activities can be Consequently, for the purpose of FSDS analysis, observed everywhere. This can be seen as a “street food” needs to be analysed in terms of transitional situation. two functions: “processing” and “retail distribution”. 11. Some issues that are not under direct influence of CLAs are: the geo-political aspects of 5. In the pipeline (“filière”) approach, operations international food (grain) trade; cost of which succeed one another may be grouped international food transport; emergency together according to their main functions: situations and food aid programmes. production, processing, marketing, distribution and consumption. These functions are managed 12. One example concerning may Chapter 1: FSDSs to Cities by players. The pipelines are characterized help in the understanding of delimitation. according to whether they are economic, social Agricultural policy can influence production or geographic and are influenced by a number of location and, consequently, consumer prices. In internal and external factors. FSDSs are also such cases, a national sectoral policy decision defined by the relationships between the players, affects urban food security (supply opportunities, within a single pipeline, between pipelines and cost of products and transport, and international between these and the environment in which competitiveness), but urban administrators do they operate. not have the authority to intervene. What is the impact of such a situation on FSDSs when 6. Urban food production refers to small areas (e.g. dealing with remote administrative and vacant plots, gardens, balconies, and containers) geographical levels? In the initial stages of the within the city, used for growing crops and raising analysis, agricultural policy may be considered small livestock or milk cows for self-consumption simply as an item of data. However, in a or sale in neighbourhood markets. Periurban dynamic perspective and as the case study food production refers to intensive semi- or fully progresses, other questions arise: commercial farms close to towns. They grow • has the policy had a significant impact on the mainly vegetables and horticultural products, efficiency of FSDSs in relation to other raise chickens and other livestock, and produce influential factors? milk and eggs. • what is the order of importance of these factors? 7. This section contains elements from Shepherd, • does the city have an important place (in terms 1993. of the quantity of food mobilized) in the country? 8. An efficiency analysis is based mainly on an • would a change of policy improve the efficiency economic approach and concerns the market first of FSDSs? and foremost. has produced a variety of opinions about theoretical premises and If the answers are in the affirmative, agricultural methodological approaches. Researchers are at policy becomes a significant factor and will have odds about market performance (Tollens, 1997). to be included in the analysis of FSDSs in cities For a FSDS case study, the problem consists of as that analysis will provide feedback for national transforming the theoretical framework into an policy. Inter-institutional coordination will have to operational approach and into a system of be envisaged, for various administrative levels indicators tailored to the type of study involved are involved. Otherwise, agricultural policy will (see also Aragrande, 1997). remain an external element. The situation will be similar in other circumstances (i.e. transport 9. Some factors, such as economic, legal and policy and public investment) where delimitation institutional frameworks, are static when problems arise at geographical, institutional and compared to FSD activities. However, they can functional level. change in conjunction with transitional situations