What do we know about the future of urbanization in relation to food system transformation

By Paul Dorosh and James Thurlow

Food, land, and water systems face daunting challenges in the future, and the body of research exploring these challenges is growing rapidly. This note is part of a series developed by the CGIAR Foresight Initiative to summarize what we know today about the future of various aspects of food systems. The goal of these notes is to serve as a quick reference, point to further information, and help guide future research and decisions.

Key messages

• The world is urbanizing rapidly. The global urban population increased from 2.87 billion in 2000 to 4.38 billion in 2020, a 53 percent rise, and is projected to reach 6.57 billion by 2050, representing 68.0 percent of the population (World Bank 2024a).
• Urbanization is often associated with structural economic transformation, marked by a growing share of non-agricultural sectors (i.e., industry and services) in GDP and employment, as well as increased productivity and incomes-ideally driven by high-productivity industries.
• Rapid urbanization typically leads to significant growth in market volumes (Reardon and Timmer, 2014; Minten et al., 2020). However, this growth can result in declining diet quality due to reduced availability of fruits and vegetables. Additionally, improving sanitation and food safety becomes a major challenge.
• Excessively rapid urbanization can lead to the development of urban slums and increased poverty, and often coincides with under-investment in agriculture and the rural economy, exacerbating rural poverty.
• Further research is needed, using detailed spatial data to link bio-physical and socio-economic outcomes, to better understand the ongoing urbanization-driven transformation of food systems.

Recent trends and challenges

Although global population growth slowed from 2.1 percent per year in 1970 to 1.2 percent per year in 2022, the total population continues to rise, increasing by 27.3 percent between 2000 and 2020, from 6.14 to 7.82 billion. The rural population remained nearly constant, increasing by just 0.2 percent over the same time frame. As a result, by 2020, 56 percent of the world's population lived in urban areas, up from 46.6 percent in 2000.

In many countries, increased urbanization has coincided with and contributed to rapid economic growth. This is partly due to structural transformation of the economy, where the share of non-agricultural sectors (i.e., industry and services) in GDP and employment rises. Labor productivity in industry and services is typically higher than in agriculture, so shifting resources to these sectors boosts overall productivity and income levels. Moreover, the concentration of economic activity that accompanies urbanization can lead to further productivity gains through positive agglomeration effects due to economies of scale in infrastructure (e.g., electricity and water supply), lower transport costs within cities, and improved information flows. (Fujita et al., 1999; Henderson and Wang, 2005; World Bank, 2009).

As shown in Figure 1, both the urban population share and GDP per capita rose sharply in East Asia and the Pacific (EAP) between 1990 and 2020. South Asia is on a similar trajectory, with its urban population share and real GDP per capita in 2015 and 2020 projected to be comparable EAP's levels in 2015 and 2020. In Latin America, urban population shares have averaged nearly 30 percentage points higher than those in EAP. However, due to rapid economic growth in EAP, that region now has a higher per capita income. Sub-Saharan Africa, which had urbanization and per capita income levels similar to those in South Asia in 1990, has seen urbanization rise sharply from 27 to 38 percent, while its per capita GDP has increased by only 25 percent.

Figure 1[Link]Source: Dorosh and Thurlow (2021) and World Bank (2024b).

What is the latest foresight research on this topic?

Reardon and Timmer (2014) describe five interlinked aspects of the agrifood system-urbanization, diet change, agrifood system transformation, rural factor market transformation, and intensification of farm technology-that "are occurring rapidly in Asia, and are well along in Latin America, and emerging in Africa." Dietary changes, such as increasing diversity and rising consumption of non-grain foods, processed products, and prepared foods, typically accompany urbanization. As urban markets expand, food supply chains and markets are also transformed-for example, the case of teff in Ethiopia (Minten et al., 2016). In the later stages of this transformation, large-scale retail and secondary processing sectors emerge, frequently supported by substantial foreign direct investment (FDI). Rural factor markets, especially nonfarm labor markets, develop along with input markets to enable intensification of agricultural production and increases in productivity.

In most of Africa, urbanization rates remain low, structural transformation has been limited. Investments in infrastructure, such as transport and internet connectivity, are needed to help small towns expand downstream processing and marketing services. However, excessively rapid urbanization can lead to the growth of urban slums and increased poverty, particularly when underinvestment in agriculture and the rural economy drives rural-to-urban migration at a pace that exceeds investments in the urban infrastructure necessary to support rapid economic growth in the urban economy (Dorosh and Thurlow, 2014 and 2018).

Diet quality may decline with increased urbanization due to lower availability of fruits and vegetables in urban centers. Improving sanitation and food safety is a major challenge, requiring the development of effective governance mechanisms to implement and enforce regulations and standards, in order to limit the spread of non-communicable disease (Resnick and Swinnen, 2023).

Several recent studies have utilized detailed spatial data to analyze the bio-physical and socioeconomic outcomes of food systems. Liu et al. (2023) examine variations in dietary water footprints (DWF) from household consumption patterns in China, finding that while plant-based foods dominate consumption, animal-based foods have higher DWF and contribute to regional inequalities. De Vos et al. (2024) combine spatial projections of urban expansion in Africa with a partial equilibrium economic model to estimate the future increases in rice production, consumption, and agricultural methane emissions. Model simulations by Dizon et al. (2023) show that Africa will experience the greatest overlap between food-producing areas and urban expansion, particularly under a scenario of significant challenges to climate change adaptation. Using a very different approach, Rusca et al. (2024) construct a socio-environmental scenario of the possible impacts of an unprecedented drought in Maputo, Mozambique, and argue that "future droughts in Southern Africa will probably polarize urban inequalities, generate localized public health crises and regress progress in water access."

What are key gaps, questions, and opportunities for further foresight research on this topic?

Further research is needed to explore the impacts of evolving market structures that accompany urbanization in most developing countries, particularly in promoting competition and preventing excessive concentration of market power for perishable commodities. Work on policies and investments aimed at improving urban diets and food safety-especially regarding fruits, vegetables, and meat products-could have major positive impacts on nutrition for urban households. Spatial analysis and policies to promote economic growth in small towns are essential for preventing excessive rural-to-urban migration. Finally, there is potential for new uses of artificial intelligence to deepen our understanding of changes in employment, food markets, and consumption patterns linked to ongoing urbanization.

This note was prepared by Paul Dorosh, Director of the Development Strategy and Governance Unit, International Food Policy Research Institute (IFPRI) and James Thurlow, Director of the Foresight and Policy Modeling Unit, IFPRI.

If you have any feedback or questions about this note, please contact Paul Dorosh ([email protected]).

References

De Vos, Koen, Janssens, C., Jacobs, L. et al. 2024. "African food system and biodiversity mainly affected by urbanization via dietary shifts", Nature Sustainability. https://doi.org/10.1038/s41893-024-01362-2

Dizon, Felipe, Hina Sherwani, and Rui Su. (2023), "Climate Change, Urban Expansion, and Food Production", World Bank Policy Research Working Paper 10411, Washington, D.C.: World Bank. https://openknowledge.worldbank.org/server/api/core/bitstreams/58752a68-d0c2-4bff-8a59-7fa74f2c02a8/content

Dorosh, Paul and James Thurlow. 2014. "Can Cities or Towns Drive African Development? Economywide Analysis for Ethiopia and Uganda". World Development 63: 113-123 November. http://dx.doi.org/10.1016/j.worlddev.2013.10.014

Dorosh, Paul and James Thurlow. 2018. "Beyond Agriculture Versus Non-Agriculture: Decomposing Sectoral Growth-Poverty Linkages in Five African Countries", World Development 109: 440-451. http://dx.doi.org/10.1016/j.worlddev.2016.08.014

Dorosh, Paul A. and James Thurlow. 2021. "Agricultural growth, urbanization, and poverty reduction", in Agricultural development: New perspectives in a changing world, eds. Keijiro Otsuka and Shenggen Fan. Part Three: Context for Agricultural Development, Chapter 9, pp. 285-320. Washington, DC: International Food Policy Research Institute (IFPRI). https://doi.org/10.2499/9780896293830_09

Fujita, M., Paul Krugman, and A. J. Venables. 1999. The Spatial Economy Cities, Regions, and International Trade. Cambridge MA, US: MIT Press.

Henderson, J. V., and H. G. Wang. 2005. "Aspects of the Rural-Urban Transformation of Countries." Journal of Economic Geography 5: 23-42.

Liu, Menghang, Chuanglin Fang, Yu Bai, Biao Sun, Xia Liao and Zhitao Liu. 2023, "Regional inequality and urban-rural difference of dietary water footprint in China", Resources, Conservation and Recycling, 199 (December), 107236. https://doi.org/10.1016/j.resconrec.2023.107236

Minten, Bart, Seneshaw Tamru, Ermias Engida, and Tadesse Kuma. 2016. "Transforming Staple Food Value Chains in Africa: The Case of Teff in Ethiopia", The Journal of Development Studies, 52(5), 627-645. https://doi.org/10.1080/00220388.2015.1087509

Minten, Bart, Mekdim Dereje, Fantu Bachewe, and Seneshaw Tamru. 2020. "Evolving Food Systems", in Dorosh, Paul and Bart Minten (eds.), The Future of Ethiopian Agriculture: Past Trends, Present challenges, and Future Scenarios, chapter 7, pp. 121-154. Washington, D.C.: International Food Policy Research Institute. https://doi.org/10.2499/9780896296916

Ramsay, Emma E., Perrine Homel, Steven L. Chown, Grant A. Duffy. 2024. "Humid heat stress overlooked for one billion people in urban informal settlements", One Earth 7(1): 2-5. https://doi.org/10.1016/j.oneear.2023.12.005

Reardon Thomas and C. Peter Timmer. 2014. Five inter-linked transformations in the Asian agrifood economy: Food security implications. Global Food Security, 3 (2), 108-117.

Resnick, Danielle and Johan Swinnen. 2024. The Political Economy of Food System Transformation: Pathways to Progress in a Polarized World. Oxford University Press. https://doi.org/10.1093/oso/9780198882121.001.0001

Rusca, Maria Elisa Savelli, Giuliano Di Baldassarre, Adriano Biza and Gabriele Messori. 2022. "Unprecedented droughts are expected to exacerbate urban inequalities in Southern Africa", Nature Climate Change, 13:98-105. https://doi.org/10.1038/s41558-022-01546-8

Timmer, C. Peter. 1988. "The Agricultural Transformation." In Handbook of Development Economics, Vol. I, edited by H. Chenery and T. N. Srinivasan. New York: Elsevier.

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World Bank. 2024a. Population Estimates and Projections database. Accessed June 11, 2024. https://databank.worldbank.org/source/population-estimates-and-projections#

World Bank. 2024b. World Development Indicators database. Accessed May 13, 2024. http://databank.worldbank.org

Photo: In the Tudu market (Accra, Ghana) by Francisco Anzola/Flickr.

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