IFPRI Report

Commentary: Agriculture Can Give a Helping Hand to Cities

When the participants in the Second United Nations Conference on Human Settlements, held June 3 to 14 in Istanbul, return home, their bags packed with renewed commitments to solving the problems of the cities, they should not confine their thinking about how to deal with urban poverty and malnutrition to the city's boundaries. They should look to the rural areas, and to the food and agricultural system, as well.

Through rapid population growth and migration, developing-country cities have become home to surging numbers of poor and malnourished people. Each year, the increase in the urban population of developing countries is equivalent to having three more Calcuttas pop up in Asia, another Lagos in Africa, and another Rio de Janeiro in Latin America. In Africa, cities are growing twice as fast as rural areas, and despite the relatively low number of people in urban areas, cities contribute just as many people to the rising population each year as the rural areas do. By 2020, more than half of all Africans and Asians will live in cities, as will more than 80 percent of Latin Americans. Already in Latin America as many poor people live in cities as in the rural areas. In India, since the late 1970s and early 1980s the number of poor people in urban areas has increased by 15.2 million, or 26 percent, while the number in rural areas has increased much less, by 3.5 million people, or 1 percent.

Faced with an increasingly urban population, many policymakers overlook the importance of food and agriculture to urban dwellers and to overall development. Food alone often takes up more than half of the budget of a poor urban family. One recent survey in the urbanized area of Winterveldt in the North West Province of South Africa found that families there spent more than three times as much on food and beverages as on any other item. At the same time, the food and agricultural system is the source of jobs for many people who produce, transport, process, and sell food in both urban and rural areas. The Winterveldt survey found that food-related enterprises provided the basis for more than half of all businesses in the area.

Even in highly urbanized Latin America, where agricultural production is only 10 percent of the region's economy, the food and agricultural system as a whole, including agroindustry, produces more than 30 percent of total economic output. A recent IFPRI study confirmed how agricultural growth helps the whole economy: When agricultural producers' incomes rise, they spend money on nonagricultural items, creating jobs for others throughout the economy, including city workers. The study found that for every $1 increase in agricultural output in developing countries, the overall economy grows by $2.32.

A successful strategy for urban development, even in middle-income countries, recognizes that a strong, vibrant food and agricultural system supports rural growth that can in turn strengthen the cities. With a dynamic rural economy, people are not forced to leave the countryside in search of jobs. The rate of rural-to-urban migration may slow, and the pressure on cities to provide services, shelter, and jobs for recently arrived migrants lessens. With fewer newcomers and an increase in the incomes of city dwellers accruing from a more vigorous food and agricultural system, cities can better afford and plan for the infrastructure needed to take care of their inhabitants. A more efficient, low-cost agricultural system can also result in lower food prices for urban residents.

Developing-country policymakers can pursue a number of actions to support economic growth in rural areas and strengthen the food and agricultural system. They should pay particular attention to two important issues that tie the cities and the rural areas together. First, they should eliminate policies that favor urban consumers to the detriment of rural areas, such as overvalued exchange rates, excessive agricultural export taxes and other trade restrictions, and food aid or subsidies that depress farm prices by selling food below market prices.

The second issue, sometimes overlooked by policymakers concerned with rural and agricultural development, is the transformation in food demand that occurs with increasing industrialization and urbanization. Urban consumers often replace traditional coarse grains like sorghum and millet in their diets with rice and wheat-based bread for convenience and variety and because these foods are often less costly. If they do not want to lose their domestic markets, agricultural producers and processors must shift to crops that urban consumers demand, or they must process, package, and market their traditional products to fit the urban lifestyle. Policymakers can help rural producers understand and meet changing urban demand by developing rural roads, markets, and communications and by investing in the education and health of rural people.

Although safety net programs can help alleviate hunger and poverty in cities in the short term, they are primarily survival, not development, programs. In the long term, urban poverty and malnutrition must be eradicated through policies that encourage broad-based growth in employment and incomes in both rural and urban areas and that take advantage of the significant contributions rural areas and the food and agricultural system can make.