Who Benefits from Private Sector Investment in Agriculture?    

The Connection between Post-Harvest Loss Reduction and the Wellbeing of the Urban Poor

Every morning in Kampala’s sprawling slums, hundreds of thousands of people wake to the aromas of tea and mandazi (fried dough) emanating from the city’s street food vendors. By noon, narrow alleyways are lined with mothers and grandmothers in bright kitenge wraps tending to steaming pots of beans and posho (boiled maize flour) that sit precariously atop charcoal stoves. Each evening, children gather with siblings and caretakers to sip tea and pick roasted maize kernels from the cob. By nightfall, the streets again fill with hissing stoves and burping pots of peanut sauce and posho, Uganda’s primary staple dish.

Food is pervasive in Kampala, from home-cooked meals that are prepared on the sidewalks of residential alleyways to the countless corner stores, restaurants, roadside stands, street hawkers, and open-air markets that stretch across the city’s seven hills. What goes unseen to the casual observer is the absence of food in so many people’s lives there. At least four million people in Uganda—one out of ten people—are food insecure, meaning they lack regular access to quality foods that meet their dietary requirements for a healthy and happy life. On a global scale, food security statistics reveal a similar picture, with 795 million people worldwide facing the same daily outlook.

Imagine for a moment what one tenth of our friends and neighbors around the globe might ponder each morning when they wake with an empty stomach: if I can afford only one meal today, shall I eat lunch or supper? Do I have enough money to pay the fees for my children’s lunches this week or must I pull them out of school? Should I send the youngest ones to eat with the neighbors again or will that further damage my reputation as a bad parent? Will I be able to earn enough cash today or will I have to pick scraps of food from rubbish heaps when no one is looking?

For those who live in urban areas (and can’t produce their own food), access to food hinges primarily on the family’s ability to earn enough money and purchase food in the market. The prices that urban consumers must pay—2,400 Ugandan shillings (67 cents) for a kilo of maize flour, for example—are determined by how much it cost to produce, process, package, and transport the maize from the farmer to the point of sale. The cost of maize flour that urban consumers see can be magnitudes greater (e.g. triple the cost or more) than what rural producers receive for the unprocessed maize at their farm gate. Urban families pay for the value that is added to the final product at each point along the value chain, which includes everything from the planting of seeds the previous season, to milling the flour, to transporting it in convenient packages to urban retailers.

Urban consumers are also ultimately paying for food that never actually makes it to the market since so much food is damaged or lost between the field and the consumer.

Urban consumers are also ultimately paying for food that never actually makes it to the market since so much food is damaged or lost between the field and the consumer. This so-called “post-harvest loss” has myriad negative impacts on local and global food systems. The loss of food quantity (volume) and quality (nutrient density and safety) negatively impacts the livelihoods and well-being of everyone in the system, including subsistence farmers (whose food consumption hinges on farm productivity), producers (whose livelihoods depend on selling enough of their crops), and urban consumers (who end up paying higher food prices due to the removal of part of the food supply from the market), among others. There are also important environmental implications of post-harvest loss since land, water, and other non-renewable resources are used to produce and transport food that is never actually consumed. Although externalities like environmental degradation are rarely reflected in the sticker price that urban consumers pay, city-dwelling families effectively end up paying for all of the labor and inputs along the entire agricultural supply chain (e.g. seeds, herbicides, pesticides, irrigation water, land, fuel, and equipment)—even those resources that went into producing food that was lost between harvest and market.

The key to solving post-harvest loss is to first identify where losses occur in agricultural and food processing value chains and then make strategic investments to improve their efficiency. These investments will have the greatest likelihood of success if they are carried out through well-coordinated and logically sequenced efforts by multiple stakeholders, i.e. the private sector, public sector, community leaders, and others. These partnerships will become increasingly important as the private sector continues to position long-term social and environmental goals at the center of their core business growth strategies. There is an important business case for investing in post-harvest loss reduction. The private sector wants to sell more foods that are safe and well-suited to the preferences of their consumers; the private and public sectors want a healthy and productive workforce; and communities want healthy and resilient families.

Investors may have any of the following specific objectives:

  • Estimate the expected return on their investments in post-harvest loss reduction
  • Strategize and plan how investments will lead to the greatest financial, social, and environmental impacts
  • Monitor progress toward stated goals and change course or re-allocate resources as needed
  • Evaluate investments to learn what works, demonstrate success, and build accountability

The first step that these stakeholders must take is to identify how, when, and under what circumstances they can make the most strategic “upstream” investments in agricultural value chains that will lead to the greatest “downstream” improvements in well-being (e.g. social and environmental outcomes). If, for example, Mars Inc. —recognized for its commitments to mutually beneficial supply chains—wanted to determine the returns it could expect to see on an upstream investment in post-harvest loss reduction in the peanut value chain by developing new equipment or improved systems, it might examine both the expected financial returns on its investment decision as well as the social impacts.

It is both challenging and extremely important to determine social impact because it involves accurately measuring things like wellbeing and food security that are not directly observable to the naked eye. There are four primary steps we can take to do this:

  1. Use your team’s internal knowledge resources and external literature to identify what has and has not worked in the past with similar types of investments.
  2. Map out the logical causal relationships of how upstream investments in the value chain may affect people at each stage in the value chain or system.
  3. Develop a comprehensive analytic plan that identifies what real-world information you need and how you will collect it.
  4. Gather, organize, and analyze the information to draw conclusions about what worked and what did not.

This enables us to determine how, when, and under what circumstances small upstream investments in the value chain will lead to big, measurable improvements in people’s lives. Those of us in the business of addressing the world’s solvable problems like post-harvest loss must go beyond our commitments to action—we must also hold ourselves accountable by measuring progress toward achieving positive social change.

Feature photo courtesy of Igor Ovsyannykov

Dr. Diana L. Caley, a social scientist and international development practitioner, is an Advisor in the Food Security and Monitoring and Evaluation practice at Crown Agents USA, in Washington, DC. This blog post draws on original field research she conducted in Uganda.

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