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

Karl Pauw, Paul A. Dorosh, Wenqian Xu and Jean Balié

Chapter 2 in What do we know about the future of food systems?, 2025-07-21, pp p. 8-12 from International Food Policy Research Institute (IFPRI)

Abstract: Global poverty declined rapidly over the past 25 years, from around 30 percent to 8.5 percent today, but a series of global crises caused the pace of poverty reduction to slow down from 2020 onward. Some regions have done well; for instance, the East Asia and Pacific region has now effectively eliminated extreme poverty, a Sustainable Development Goal (SDG), while extreme poverty in South Asia is expected to be eradicated by 2030. But with almost no further reduction in the extreme poverty rate in sub-Saharan Africa until 2030, the number of poor people in this region will expand by 10 percent to reach 500 million. This means that by 2030, around 80 percent of the global population of poor people will live in sub-Saharan Africa. Poverty and food systems are closely intertwined. Both theory and evidence support the notion that investments in the food system that reduce food prices or create jobs in the food system will be highly effective at reducing poverty, and likely more so than investments outside of the food system, especially during the earlier stages of a country’s development. With respect to investments within the food system, since the majority of the world’s extreme poor are engaged in farming, investments in the on-farm part of the food system are likewise more effective at reducing extreme poverty than off-farm investments, such as in processing, distribution, and food services. However, rural-urban migration and structural shifts in employment into off-farm jobs, combined with growing demand for processed foods from retail or food service outlets, will gradually increase the poverty-reducing impacts of off-farm investments. Foresight analysis can help policymakers anticipate employment and dietary shifts and allocate their food system investments in a way that would maximize their impact on extreme poverty. Policies and investments designed to facilitate food systems transformation may be associated with trade-offs across development outcomes. For instance, while investments in staple crop productivity may be most effective at reducing poverty and calorie availability, they may not contribute to improving dietary quality or health outcomes, which are also important SDGs. Likewise, regulations that encourage the adoption of environmentally conscious food production processes, also central to several of the SDGs, may raise the cost of food, with negative consequences for poverty. At the same time, inaction now to facilitate a transition toward more sustainable food systems will contribute to conflicts, disasters, physical displacement, and adverse health and economic outcomes in the future, the burden of which will fall disproportionately on future generations of poor people. Foresight analysis can help policymakers understand these trade-offs as they consider alternative investment choices and measures to protect vulnerable populations from any adverse impacts.

Keywords: poverty; poverty reduction; food systems; policies; investment; agricultural productivity; rural development (search for similar items in EconPapers)
Date: 2025-07-21
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