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Newsletter no 27 - In the spotlight 1

Monday 3 October 2016, by Manu

Recognize, support and protect territorial markets [1]

(…)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 [2]. The idea of “connecting smallholders to markets” is misleading: globally more than 80% of smallholders operate in the territorial markets that are the most important for food security and nutrition [3]. We want these markets to be recognized, supported and defended by appropriate public policies.

We propose to call these markets “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 organization 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. Sometimes these other functions are performed by smallholders or their associations. Women are the key actors here, and so these markets provide them with an important source of authority and of revenue whose benefits are passed on to their families.

These markets are extremely diverse but they are all distinguished by certain characteristics, as compared with global food supply systems, including the following:

- 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. They thus constitute an important contribution to 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. (…)

[1This article has been excerpted from the document “Connecting Smallholders to Markets
What the CSM is advocating.” –. Full document here: http://www.csm4cfs.org/wp-content/uploads/2016/02/SG_2016-SH_markets_4_pager-3-Clean.pdf

[2FAO (2015) 2015-2016 - The State of Agricultural Commodity Markets; FAO (2015) Food Outlook - Biannual Report on Global Food Markets.

[3T.Reardon and J. Berdequé (forthcoming), “Agrifood markets and value chains” in IFAD, Rural Development Report; E. Del Pozo-Vergnes (2013) From survival to competition: informality in agrifood markets in countries under transition. The case of Peru, IIED.