Understanding the role of informal SMEs in food system transformations

What is the role of informal SME in Food System transitions? Informal SME could play an important role in food system transformations, as they link consumers to producers and vice versa. Often their role is neglected in the transitions towards healthy, sustainable and inclusive Food Systems. One reason is that they operate in informal economies, which are not well researched and understood, notably which incentives are effective to steer informal SMEs to contribute to desired food system outcomes, such as food safety or making more nutritious foods available and accessible to consumers.

In the KB project Feeding cities and the IFAD Rural Development Report (by WUR authors) the role of the the ‘informal’ sector, most notably the ‘informal SMEs in the Food System Transitions is identified as a key to boost empowerment, employment and solving Food System Challenges. As the formalisation of the ‘informal SMEs’ is not an option at short notice, measures, incentives and support services will have to be adapted to the reality prevalent in the informal economies. This poses a great challenge to policy makers, impact investors, financial agencies and other stakeholders: how can informal SMEs be supported to enhance their role in delivering desired food system outcomes?