IFAD’s Rural Development Report 2021

Our food systems are failing us. From the climate, to the environment, to nutrition, to human health and well-being, they are not delivering the outcomes we all need. Meanwhile, the lives of more than 700 million people are blighted by hunger.

We urgently need food systems that deliver adequate, nutritious diets for all – and, more than that, we need systems that can provide decent livelihoods for all who grow, process, store, and market our food.

This is an especially pressing concern for the world’s small-scale farms. Despite their size, these farms make an enormous contribution to our global food supply: farms of 2 hectares or fewer collectively produce 31 per cent of the world’s food on less than 11 per cent of its farmland. They also tend to produce a greater richness and diversity of nutrition compared to larger-scale farms. But despite their contribution to feeding the world, small-scale farmers are especially prone to suffering themselves from poverty and hunger.

Moreover, small-scale farms, and the people who work on them, face a number of constraints. In addition to the impacts of climate change, these farms must contend with the encroachment of industrial farms and the social and political upheavals occurring in many places around the world. The failure of these systems spells danger not just for the livelihoods of rural people, but for human health, the environment, global stability and our children’s future.

IFAD’s Rural Development Report 2021  focuses on “Transforming food systems for rural prosperity.” It describes the systemic issues that have led to the situation we are in, identifies priorities for transforming our food systems, and provides recommended actions to achieve meaningful change.

The Rural Development Report 2021 is launched on the eve of the United Nations Food Systems Summit – a gathering of leading food and nutrition experts that marks the beginning of transforming our food systems in the context of the Sustainable Development Goals. 

So, at this auspicious moment, what insights does the Rural Development Report offer us?

One prominent issue concerns what we call the “midstream” of food systems. The midstream includes all the activities that happen after the farm gate – trading, storing, processing, and distributing food to consumers – as well as businesses that supply inputs to farmers. This segment of the food system has strong potential to generate decent employment.

Currently, many developing countries are undergoing a transition in this sector, with their midstreams rapidly growing and encompassing a wider range and complexity of activities. The development of these midstreams should therefore be focused on local small and medium-sized enterprises (SMEs) and their potential to generate jobs. These jobs, plus the potential to generate connections between midstream SMEs and local small-scale farmers, can help create food systems that work for rural people.

But this can only be achieved if the right policies are put in place – particularly those that promote investment in SMEs and discourage the domination of the midstream by large companies. Employee skill development programmes will be important too, as will ensuring the improvement of working conditions through public regulations.

Another key aspect of midstream development is forging connections of all kinds – from building better roads and bridges to extending access to digital technologies. SMEs will benefit from improved access to diverse, nutritious sources of food, while the farmers will benefit from easier access to inputs and markets.

This brings us to another closely related priority highlighted in the Report: enabling small-scale farmers to earn decent and fair rewards for their work.

The Rural Development Report 2021 shows that small farms are remarkably productive and contribute a greater diversity of food compared to larger farms. Nevertheless, small-scale farmers contend with many constraints – such as lack of access to land, water rights, finance, information, and new technologies – that limit their productivity and keep them poor. An equitable transformation of food systems must therefore have small-scale farmers at its centre, complemented by local midstream SMEs that link them with essential services and markets.

This means supporting these farmers to overcome these constraints. It also means making markets work for them by eliminating systemic sources of bias and inequality. The Report describes these systemic issues, along with the manifold ways in which global trade systems are biased against small-scale farmers. It shows how, although farmers in some parts of the world benefit from advantageous trade and subsidy arrangements, there is little support for small-scale farming in the countries where needs are greatest.

As such, the Rural Development Report 2021 calls for a rebalancing of market and trade regulations so they support, rather than discriminate against, poor rural people. Food markets need to be accessible to small-scale farmers – and other SMEs working in food systems – on fair terms.

The Report provides detailed analysis and policy recommendations are in these areas as well as many others, including nutritious diets, food loss and waste, food processing, and the role of animal-based foods. These recommendations are particularly pertinent at a time when the world is set to come together to put in place a shared agenda for the future of our food systems.

You can download the Report in full  or browse through it on our dedicated website.

Publication date: 21 September 2021