The importance of informal markets in food systems transformation
Hundreds of millions of people in the Global South depend on the informal economy for their food and nutrition security. Informal markets are often the main source of income and nutrient-rich foods for vulnerable communities, however, their value is often not appreciated, and interventions and policies fail to take account of them. Yet conflicts, Covid-19 and climate change show the importance and the resilience of informal systems.
The food systems debate has created renewed attention for the critical role of informal markets for producers, consumers and job seekers in many developing countries. Traders, street vendors and transporters – known as informal businesses – play a critical role in providing affordable food to low-income households in Asia, Africa and Latin America.
However, the informal sector can also have negative impacts. This includes poor conditions for workers, which hampers development of the agri-food sector. Often, workers in the informal sector operate outside regulation policies for food safety and hygiene standards, creating risks to public health.
Governments prefer a large formal sector, which generates tax revenues and holds businesses accountable for evading or violating laws and regulations. Yet, if governments, investors and development practitioners aspire to have significant, large-scale impact on food system outcomes, then perceptions and understanding of the informal component of the food system need to change.
Acknowledging the role of informal markets
The informal sector must be acknowledged for its role in delivering food system outcomes so that interventions can help the sector contribute more effectively to food system transformation processes, achieving Sustainable Development Goal (SDG) 2 of zero hunger, climate mitigation and adaptation goals as well as other SDGs.
To support this process, we need to increase understanding of informal economic actors and our experience in working with the informal sector. In particular, how to work in parallel with formal and informal food systems; how to deal with their interactions; the different goals of private and public sectors; and how to find instruments that provide space for both systems and their stakeholders to operate.
Governments have only a limited repertoire of incentives that trigger informal midstream businesses to contribute to public goals. Other actors in the food system – such as retailers, organised consumers, consumer organisations and investors – are better positioned to reach out to informal businesses.
Sharing insights: join our learning session
At the meeting, we will share insights from recent research and project experiences in Asia and Africa, to promote food systems that are more inclusive and sustainable, and able to generate healthier diets. The meeting is intended to be the start of collaborative activities on this topic by:
- defining the future agenda for knowledge and action
- exploring common challenges and opportunities for practitioners and policymakers to learn
- developing joint initiatives.
Date: 15 November 2022
Time: 15h – 17h30 CET
Registration: click here
Location: The Social Hub (formerly The Student Hotel) + livestreaming for international participants
Address: Hoefkade 9, 2526 BN The Hague (a 3-minute walk from Holland Spoor)
Options for online participation are being explored and will be shared when available. Keep an eye on this page and our events.
Further reading on informal sector engagement:
- How to engage informal midstream agribusiness in enhancing food system outcomes. What we know and what we need to know better. Daniel A. Mekonnen, Emma Termeer, Katrine Soma, Siemen van Berkum and Bart de Steenhuijsen Piters. Wageningen University and Research, April 2022
- Unpacking the informal midstream: how the informal economy can and should contribute to enhanced food system outcomes. Emma Termeer, Siemen van Berkum, Youri Dijkxhoorn, and Bart de Steenhuijsen Piters. Wageningen University and Research Policy Paper, September 2022
- Sustainable diets in the informal economy. Sustainable diets for all reflection series. Bill Vorley, Alejandro Guarín, Giulia Nicolini. Hivos and IIED, October 2020
- Meeting small-scale farmers in their markets: understanding and improving the institutions and governance of informal agrifood trade, Bill Vorley, IIED/HIVOS/Mainumby, 2013.