Urban and Informal Food Systems

By 2050, two-thirds of the world’s population will live in cities. This has generated renewed calls for the private sector, particularly the finance industry, to invest in and support small and medium-scale enterprises (SME) in the food value chain.1

In the near term, medium-scale producers, or consortiums of small-scale producers, who have the capacity to expand their operations are more likely to benefit from this new wave of investment.  Independent small-scale farmers will continue to rely on the informal food value chain, selling their products in local markets or to traders who supply larger buyers.

Informal markets also contribute to the food security and nutrition of low-income people in urban areas.2 In South Africa’s urban centers, low-income people purchase their monthly supply of staple foods, such as mealie meal, from formal retail outlets, but perishable products and ready-to-eat foods are purchased at local food markets or from street vendors.

South Africa’s informal food sector is a significant part of the agricultural economy. It is the country’s second largest potato buyer, and Fresh Producer Markets, the largest potato buyer, purchases more than half of its supply from informal traders.

Given the importance of the informal food sector to producers, consumers and the economy, policymakers need to consider how to increase the sustainability and safety of food produced and sold informally, and how to improve the working conditions and social protection of those involved in this vibrant and growing part of the food value chain.



  1. Thomas Reardon, “Growing Foods for Growing Cities: Transforming Food Systems in an Urbanizing World”, Chicago Council for Global Affairs, (April 2016).
  2. Etai Even-Zahaz and Candice Kelly, “Systemic Review of the Literature on ‘Informal Economy’ and ‘Food Security’,” Institute for Poverty Land and Agrarian Studies, Working Paper No. 35, (July 5, 2016), 14, 16.

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