Trade winds: is free trade in food bad news for rural areas during rapid urbanisation?
City dwellers are driving more than half of the demand for food in Africa and 60–70 per cent in Asia. Trade meets that demand — urban consumers are linked to farmers and processors by supply networks that can span great distances. Whether rural areas are winning or losing from increased trade, however, remains uncertain. Urban areas can draw in imports rather than domestic suppliers because of proximity to ports, shifts in consumption, poor competitiveness or poor infrastructure. A working paper explores how urbanisation is transforming trade between rural and urban areas. It looks at the relative merits of trade and agriculture policy instruments, and unpacks some of the implications for policymakers.