Presented at The State of Food and Agriculture 2015 (SOFA) workshop held at FAO's headquarters in Rome on July 1st, 2014. The presentation explained the concept of Institutional Demand as a feature of Social Protection that links agricultural producers with local and assured local/regional markets. Institutional demand primarily consists of state purchases of produce from smallholder farmers that is then distributed through social protection networks (community kitchens, food banks, schools, etc) to fight hunger.

1. Food assistance and institutional demand:
supporting smallholder farmers to fight hunger and
boost agricultural production
United Nations Development Programme – International Policy Centre for
Inclusive Growth (UNDP/IPC-IG)

2. The importance of Smallholders
for Development
• Post-war technologies that strived for modernization, urbanization and
industrialization marginalized smallholders
• Narrowing and specialization of the commodity chains presented
additional challenges
• Over 70 percent of the world’s poor reside in rural areas and a majority
depend on agriculture for their livelihoods
• Despite this, smallholders/peasants produce 70% of the world’s food
(ETC Group 2009)
• Production based on crop diversity and local/regional specificity to
incorporate culturally and climatically appropriate food
• According to the UN Committee on World Food Security and the United Nations’ High
Level Task Force on Global Food Security, “smallholder agriculture has a central role
to play in increasing agricultural production sustainability and in reducing poverty” and
“efforts to connect smallholder farmers to markets – for example, through food
procurement operations— contribute to farmer productivity”.

3. Assumptions
• Responses
o State intervention
o Price mechanisms
o Procurement of local produce
• Culturally appropriate
• Local economy linkages
o Increased demand
o Bolster farmer organization
o Expand infrastructure
• Challenges
o Narrow supply chains
o Uncompetitive markets
• Trader monopolies
• Incomplete information
• Land tenure uncertainly
o Food Imports
o Infrastructural
inadequacies/remoteness

4. Homegrown School
Feeding (HGSF)
“A new model of school feeding that is designed to deliver agricultural/market improvements as well as
nutritional and educational benefits” (Morgan et al. 2007)
Social Protection Benefits of School Feeding
• Increases school enrollment and attendance
• Improves educational achievement
• Promotes food security and nutritional health
Synergies with Rural Development
• Food for school feeding programmes can be procurement from smallholders
• Increases demand for food
• Provides a secure marketing channel
• Increases productivity
• Raises famer incomes
• Secure income contributes to household’s food security

5. Local and Regional Food
Procurement (LRP)
Policies based on purchasing food from smallholders
• World Food Programme’s Purchase for Progress (P4P)
• Brazil’s Food Acquisition Programme and (PAA)
• Purchasing from Africans for Africa (PAA-Africa)
• USAID/USDA supported LRP programmes in Africa
• Additional innovations
o Targeted support for nutritionally superior,
domestics produce
• i.e. Cereals in Senegal for
bread production
o Direct supermarket supply chains
o Domestic food safety net programmes
• i.e. Bolug-Raskin programme
in Indonesia
Brazil’s Food Acquisition
Programme – PAA
• Targets the most vulnerable family
farmers
• Budget of around US$700 million
• Distributes food through social
protection networks and public
institutions
• Implemented through various scales
and across governmental levels

6. Institutional
Demand as
Social
Protection for
Development
Price
Stability
Farmer
Organization
Food
Security
Income
Generation
Institutional demand policies promote development by procuring smallholder produce
and protecting vulnerable populations through coordinated markets to expand food
availability

7. Price Stability
• Many producers remain net food buyers
o Volatile food prices affect production and consumption decisions
o Globally, food price volatility can make import dependent countries even more
vulnerable
• Domestic food markets need to be supported
o Institutional demand policies help to set a price benchmark for producers
• Regional price surveys
• Procurement of certain crops can have spillover effects to support price
stability in others
o Seasonal fluctuations in prices can be mitigated by assuring a market for
producers eliminating post-harvest sell-offs

8. Income Generation
• Financial risks inhibit productive investments
o Market information – demand, crop type, income security
o Income shocks often result in selling off productive assets or reducing
investments in household human capital (i.e. taking children out of school,
reducing clinic check-ups, etc)
• Institutional demand supports longer-term decision
making to invest in productive assets
o Increased and assured market demand
• Crop type with more certainty
• Assured income
• Longer-term planning to invest in production based on demand

9. Food Security
• Institutional Demand has four main components that
bolster domestic food security
o Availability
• Increased demand supports more productivity by incentivizing productive
investments to expand food supply
o Access
• Food distribution through social protection networks increases food access
to vulnerable populations (via food banks, schools, community kitchens and
other public institutions)
o Utilization
• Domestic and/or local administration of institutional demand recognizes
more culturally and ecologically appropriate crops for production
o Shocks
• Domestic and/or local support of food systems enhances the resiliency of
producers and consumers through the support of food production that is less
reliant on volatile international food prices

10. Farmer Organization
• Institutional Demand and farmer organizations are
mutually reinforcing
o Program implementation typically utilizes farmer organizations to facilitate
procurement and food delivery
o Organized production can increase the capacity of local/regional food systems to
meet the demand of local institutional markets
o Multiplier Effects
• Opportunity for shared learning about production and processing
o i.e. Bulking other produce for improved market leverage

11. Issues/Controversies of
Institutional Demand
• Pricing
o How are regional/local prices for procurement determined? Who manages the a pricing mechanism?
o What effect will this have on the existing infrastructure of private traders/intermediaries?
• Infrastructure
o Transportation issues for food delivery
o Organization and implementation of the program
• Who are the producers? Where does food get delivered, stored and distributed?
• Payments
o How are payments made and is there a procurement limit per producer/household?
• Tendering Requirements
o Procurement rules may impose burdensome bureaucracies which smallholders may find difficult to comply –
health and safety regulation, tax registration for producer organizations, etc
o Countries may need to reform their legislation regarding public purchases in order to facilitate smallholder
participation in tendering processes
• Registration/Targeting
o What system exists to target the most vulnerable producers?
o Can the producers meet production requirements?
• Scalability
o How can ID policies be scaled-up to include other producers (fisherfolk, landless, highly-capitalized family
farmers, etc)
• Dependency
o Loss of state funding resulting in less of a market than prior to Institutional Demand programme

12. Graduation?