Feed the Future
This project is part of the U.S. Government's global hunger and food security initiative.

Three Good Reasons to Invest in Small Rural Towns to Improve Food Security

This post was co-authored by Jim Oehmke, USAID Bureau for Food Security, and Thomas Reardon, Michigan State University.

Economists studying agricultural and structural transformation have often divided the economy into rural and urban geographies, but economic geography tells us that "rural" and "urban" are simply points on a continuum. In fact, small rural towns — and tertiary and secondary cities — are critically important in the drive to end hunger and extreme poverty. Here are three reasons to invest in food systems in small rural towns.

1. Small rural towns are critical linchpins between farm production and food consumption. They can be food manufacturing export hubs for other local areas with different production patterns as well as for secondary and primary cities.

The rural-urban flow of food has grown 800 percent in Africa and 1,000 percent in Asia in the past 30 years, mostly via tertiary and secondary cities. This improved access to affordable foods for the 60 percent of the African urban population who live in tertiary and secondary cities, as well as residents in primary cities.

Rural towns also provide a flow of food in the other direction — to rural smallholders who are commercializing and increasingly reliant on markets for diverse and nutritious foods.

Public investment and policy can have a significant influence on the development of tertiary city food markets. The share of purchased food in rural food expenditures ranges from 45 percent in East and Southern Africa, to about 70 percent in Nepal and Vietnam, and to about 80 percent in Indonesia and Bangladesh. This implies a need to invest in rural-rural and urban-rural food supply chains, which are mediated through investment in small rural towns.

2. In South Asia and Africa, where extreme poverty and hunger are most prevalent, youth demographics will propel population growth, including in rural areas. In Africa, the majority of the population is expected be rural through 2040 despite rapid urban growth. Driven by a youth bulge, this population is a labor force that will demand rural jobs and present an opportunity to locate production in small rural towns with a viable labor force.

Small towns are currently a cornerstone of rural nonfarm employment, as illustrated in China’s agricultural development and success in reducing poverty. In Sub-Saharan Africa, rural nonfarm employment comprises 50 percent of smallholder income, providing more opportunity for the poorest of the poor. Rural nonfarm income provides financial capital for the vast majority of farmers who invest in agriculture, especially smallholders.

3. Investment in small towns that leads to employment is a more sustainable way of supporting the poor who move off the farm and provides a path to more rapid emergence from poverty. Small town employment opportunities help smallholders diversify livelihoods, and migrants from the farm to small towns are more likely to have opportunities to build skills and capital and emerge from poverty. Evidence shows that the extremely poor who move to primary cities are likely to remain poor.