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Urban Food Security: where should wholesale markets be located?

June 27, 2023 por Florent Tomatis - Ana Maria Huaita Alfaro - María Camila Quintero - Editor: Daniel Peciña-Lopez Leave a Comment

Este artículo está también disponible en / This post is also available in: Spanish


Markets have been, since their creation, the epicenter of city life. They are places where goods are exchanged, where people meet, but above all, they are the places that make food security possible in our cities.

Markets, as we know them today, date back to the 19th century.  They are the result of the predominant urban planning ideas of that period, which advocated moving the traditional open-air market in the public square to a central covered space.  In recent decades, Latin American and Caribbean (LAC) cities have grown rapidly horizontally, which means that most of their populations live far from the urban center. Is now the time to move the wholesale market out of our cities to adapt to today’s urbanism? In this article, part of a series on urban food security, we will try to answer this question. Read on for more details.

The larger the population, the greater the demand for food: how can we meet it?

During the last decades, LAC has experienced a very high migratory exodus from the countryside to the city. The region’s population is growing and becoming more concentrated in urban areas. Nearly four out of every five people in the region live in areas classified as urban: about 40 percent of these live in megacities exceeding one million people, while 60 percent live in smaller cities and towns. The expansion of urban territories and the merging of cities have led to the formation of large metropolitan areas with active economic and social activities across multiple municipalities. Urbanization in Latin America and the Caribbean (LAC) has resulted in increased food demand, and greater reliance on traditional food distribution channels – mainly composed of food markets and small retailers.

Urbanization, and the pressures emerging from it, ( not only of increased food consumption but also increased demand to food production and distribution to expanding urban areas) urgently demand infrastructure and logistic changes to safeguard fresh food access, to meet safety requirements and to strengthen resiliency and sustainability of food supply chain.

Agrifood systems, connecting the many and varied agents, environments and resources that make food availability and accessibility possible, are quickly adapting to keep up in their capacity to feed cities. As LAC experiences ongoing urbanization, food systems will face the task of producing and delivering significantly larger quantities of food to the growing urban populations. The scale of this challenge becomes apparent when considering the existing achievements of food systems. For instance, the Mexico City wholesale market already moves 11 million tons of food annually to serve the 21 million inhabitants of the greater Mexico City area. By 2050, the market will need to handle nearly twice that amount.

Markets, at the heart of food security

Marketplaces play a fundamental role, particularly in low- to middle-income economies, in providing market access for domestic producers and local products, often being the sole or primary means of trading fresh produce. Moreover, food markets can be pivotal in food distribution, as observed in LAC. These roles do not just have local impact, but may have regional, national or transnational implications for food systems.

Despite shifts in virtual and globalized forms of exchange, markets continue to be preferred as platforms for cooperation, coordination, and connectedness around food products. Their dynamism and flexibility, prioritizing direct and personal exchanges where market actors converge, have allowed them to prevail, despite pressures of modernization, competitiveness, and changes in production and consumption conditions.

In the sprawling cities of the region, the traditional marketing channel is composed by several aggregation and wholesale markets that facilitate food distribution, and a likewise large number of retail markets and vendors mainly sourced by these wholesale infrastructures.

What functions do markets perform?

In their various shapes and sizes seen today, marketplaces provide diverse operational functions:

  • Are the main platforms for collection and primary marketing of fresh products when they are located close to production areas, as in the case of wholesale food markets with a stronger function of aggregation, such as assembly markets.
  • Are key centers for local food provisioning where populations are settled in urban and urbanizing locations
  • Host a range of livelihoods, within, or closely connected to, their infrastructure, with a variety of value chains converging in these platforms.
  • Contribute to formalizing business activities, drawing informal operations into regulated marketing channels that can support fairer conditions in market participation for all food value chain actors.
  • Create environments for participation in broadening food access, from the wide variety of actors involved, as well as for inclusive urban development, encouraging private investment and offering synergies that boost competitiveness of small actors, unequally facing bigger players (such as large agrifood production and retail firms).

Should we move wholesale markets out of city centers?

In LAC, most wholesale markets are located in urban centers even though a significant part of the population lives in informal settlements that are poorly connected to the city centers. This prevents easy and quick access to logistics centers. Their location has not been considered as part of city planning and it could be more strategic to meet the needs of a greater number of people and facilitate more efficient and less polluted mobility in cities. Cities such as Parana, Argentina and Montevideo, Uruguay have or are in the process of moving their wholesale markets.

However, experiences in other regions, such as Europe, shows how the placement of wholesale market needs to be considered in a differentiated way depending on the context of each city. Food systems can be considered as different as cultures and even through there are basic approaches that can be applied to most markets, other specifics need to be considered to ensure food supply.

This process of moving the wholesale market out of the city center was already experienced 20 years ago by European cities such as Braga, Portugal. However due to urban growth the market location is being debated once more as it is no longer located in the periphery of the city. In the case of Hamburg, given the decreasing population growth and the size of the city the market will not be moved out of the city center as has been the case in Western Europe given the demographic changes.

Argentina:

In Parana, given the poor infrastructure conditions of El Charrua Market the Municipality, together with the Board of Directors, are planning on moving the market through a public-private partnership. The new market will have a prime location and is expected to be a regional reference point in terms of innovation and employment.

Uruguay:

The Mercado Modelo in Montevideo was transferred in 2021 to the metropolitan area and now plays a crucial role in local economic development by creating new opportunities for both small-scale producers and entrepreneurs. Additionally, the transfer of the Mercado Modelo has stimulated urban regeneration in the Aguada neighborhood where the new market is located. The market’s relocation has brought new life and activity to the area, attracting investments in infrastructure, hospitality, and real estate. This revitalization has not only improved the physical landscape but has also enhanced the overall livability and attractiveness of the neighborhood.

Germany:

The Hamburg Wholesale Market was originally built in 1962 and located in the city center. The location of the market has been strategic and in 2010 its was renovated. Given the changes in demography leading to a decrease in urban growth the market will not be moved as it could cause potential problems.

Webinar: Moving wholesal markets out of the city: lessons learned

If you are interested in this topic, we invite you to wacth the webinar that took place on Wednesday, June 27th, where we discussed the potential challenges and benefits of moving wholesale market outside the cities through the lens of cities in Latin America and Europe. Do not miss it:

Related content:

Urban food security: the role of cities in food supply
Urban Food Security: How to connect our cities’ food systems?

Filed Under: Urban economics

Florent Tomatis

Tomatis, Florent joined the FAO Investment Centre in 2019 as a urban food distribution and markets expert. His main areas of expertise include value chains analysis; agribusiness investments design and management; market infrastructure; agrologistics and urban food distribution systems. Prior to joining FAO, he worked in the main European wholesale food markets in France and Italy (Rungis market and Centro Agroalimentare di Roma) as manager of international projects, providing technical assistance to local and national authorities to develop agri-food platforms in Europe, West Africa, Maghreb and Balkans. He participated in the works of the World Union of Wholesale Markets Board of Directors for five years. Since 2019, he has supported the FAO Investment Centre’s work with the World Bank on investments in the agri-food sector in Central Asia, Balkans, West and North Africa, in particular the development of agricultural markets network in Morocco, Ivory Coast, Jordan and North Macedonia. He leads the FAO/EBRD COVID-19 package sub-component “Supporting the evolution of urban food distribution systems”. He is the technical team leader of the FAO CFI global study on wholesale food markets, “Upgrading wholesale food markets for food system resilience in the 21st century”. Florent holds a Master’s degree in political sciences and public affairs from Institut des Sciences Politiques of Paris (Sciences Po Paris), and a Master’s degree in business management from l’ École des Hautes Études Commerciales de Paris (HEC Paris).

Ana Maria Huaita Alfaro

Huaita-Alfaro, Ana Maria is an urban food markets expert. She joined FAO in 2020 to work as an international consultant in global projects falling this field. As an independent consultant and researcher, Ana Maria has strongly engaged with activities of knowledge co-production and sharing for enhanced participation in urban governance, applying the lens of food to highlight demands on renewed urban visions and planning around food centres – mainly markets. She has participated in the set up and strengthening of urban food platforms in Peru, connecting leaders of market traders and farmers’ associations, government authorities, academia and international organisations. She has strengthened these commitments by engaging with international networks of researchers and planning practitioners for urban food markets. She has also conducted studies on tourism and gastronomic potentials based on the Peruvian ‘gastronomic’ boom of the past decade. She has been part of the FAO Investment Centre team dedicated to agrifood markets and logistics, and has been actively engaged in the global study on wholesale food markets, evaluating potentials for their upgrading based on their roles for urban food systems. Ana Maria holds a Ph.D. in Development Planning from University College London, an M.Phil. in Environment, Society and Development from the University of Cambridge, and a Postgraduate diploma in design and management of social projects from the Pontifical Catholic University of Peru.

María Camila Quintero

Maria Camila is an economist specialized in cities and Latin American development. She currently works as a Consultant for the Housing and Urban Development Division of the Inter-American Development Bank (IDB) and the World Bank's Global Practice for Urban, Disaster Risk Management, Resilience and Land (GPURL). She has more than ten years of experience in the design and implementation of lending urban development projects; the creation of strategies and tools to address urgent urban challenges related to inequality, economic development, and environmental sustainability; building partnerships with international donors, private sector, public sector officials and universities; and the evaluation and promotion of sustainability in cities. Maria Camila holds an MSc in Cities from London School of Economics, an MSc in Latin American Development from Kings College London, and an MBA from Bentley University. She previously worked as a consultant for the IDB Cities Network and worked for the IDB country office in Bogotá, Colombia, was Deputy Director of Projects and International Cooperation of the Secretary of Environment of Bogotá Colombia and Technical Advisor of the Water and Waste Management Regulation

Editor: Daniel Peciña-Lopez

Daniel Peciña-Lopez is a specialist in international affairs, external relations and communication. He has more than 10 years of professional experience in diplomatic delegations, and international organizations in cities such as Washington DC, New York, Chicago, Madrid, Mexico City and Hong Kong, among others. Daniel is Master of International Affairs from Columbia University, Master of Science from the University of Oxford Brookes and Licenciado from Universidad Complutense de Madrid. In 2010 Daniel received the First National Award for Excellence in Academic Performance, from the Ministry of Education (Government of Spain) for being the university level student with the highest average GPA score in the country.

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