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Agricultural value chains and social and environmental impacts: Trends, challenges, and policy options

Background paper for The State of Agricultural Commodity Markets (SOCO) 2020










Gómez, M.I., Meemken, E. and Verteramo Chiu, L.J. 2020. Agricultural value chains and social and environmental impacts: Trends, challenges, and policy options – Background paper for The State of Agricultural Commodity Markets (SOCO) 2020. Rome. FAO. 




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    The State of Agricultural Commodity Markets 2020 (SOCO 2020) aims to discuss policies and mechanisms that promote sustainable outcomes – economic, social and environmental – in agricultural and food markets, both global and domestic. The analysis is organized along the trends and challenges that lie at the heart of global discussions on trade and development. These include the evolution of trade and markets; the emergence of global value chains in food and agriculture; the extent to which smallholder farmers in developing countries participate in value chains and markets; and the transformative impacts of digital technology on markets. Along these themes, SOCO 2020 discusses policies and institutions that can promote inclusive economic growth and also harness markets to contribute towards the realization of the 2030 Agenda and its Sustainable Development Goals.
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    Regional and global trends in body weight show that the Near East and North Africa (NENA) region countries, especially the Gulf Cooperation Council (GCC) member countries, have the highest average body mass index and highest rates of overweight and obesity in the world. There exist several explanations that expound the high rates of overweight and obesity in most NENA countries, including the nutrition transition, urbanization, changes in lifestyle, and consequent reduction of physical activities. This study examines the implication of food policies, mainly trade and government food subsidies, on evolving nutritional transitions and associated body weight outcomes. We examine the evolution of trade (food) policies, food systems, and body weight outcomes across selected countries in the NENA region – Egypt, Jordan, and Iraq. In particular, we investigate the implications of important trade (food) policies in shaping diets and food systems as well as their implications on public health outcomes, mainly the rising levels of overweight and obesity in the NENA region. We provide a simple conceptual framework through which trade policies (tariff rates) and domestic government food policies (subsidies) may affect food systems and nutritional outcomes. An important and innovative feature of this study is that it compiles several macro- and micro-level datasets that allow both macro and micro-level analyses of the evolution of trade (food) policies and associated obesity trends. This approach helps to at least partly overcome the data scarcity that complicates rigorous policy research in the NENA region. Overweight and obesity rates have almost doubled between 1975 and 2016, with varying rates and trends across regions. For instance, whereas body weight in the NENA region was comparable with that found in high-income countries in the early years, after the 1990s regional overweight and obesity rates became much higher than those in high-income countries. Specifically, while most high-income countries are experiencing a relative slowing of increases in overweight rates, the trend for the NENA region continues to increase at higher rates. The evolution of overweight rates for the GCC countries are even more concerning. These trends are likely to contribute to the already high burden of non-communicable diseases in the NENA region. Contrary to the conventional view that overweight and obesity rates are urban problems, our findings show that rural body weight has been rising over the past few decades, sometimes at higher rates than in urban areas.
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    Food value chain transformations in developing countries - Selected hypotheses on nutritional implications
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    We examine how the transformation of food value chains (FVCs) influence the triple malnutrition burden (undernourishment, micronutrient deficiencies and over-nutrition) in developing countries. We propose a FVC typology (modern, traditional, modern-to-traditional, and traditional-to-modern) that takes into account the participants, the target market, and the products offered. Next, we propose selected hypotheses on the relationship between each FVC category and elements of the triple malnutrition burden. The primary finding is that the transformation of FVCs creates challenges and opportunities for nutrition in developing countries. For example, Modern FVCs may increase over-nutrition problems and alleviate micronutrient deficiencies for urban people with relatively high incomes. However, they have little nutritional impacts among rural residents and urban poor people, who primarily depend on traditional FVCs to access adequate quantities of calories and micronutrients. In addition, modern food manufacturers are leveraging traditional distribution networks (modern-to-traditional FVCs), substantially increasing access to low-priced processed/packaged foods in rural areas and low-income urban neighbors with mixed impacts on the triple burden of malnutrition. Further research should focus on the influence of FVC transformation on reduction of micronutrient deficiencies, on modeling demand substitution effects across food categories and the attendant policy implications for malnutrition.

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