In this city of 1.1 million people, about 80 percent of all food moves through the Bazurto market. But in recent years, government officials decided to relocate the marketplace in order to build a dedicated high-speed bus route. This is a huge task — one street near the market building contains over 1,000 food vendors — and Cartagena cannot afford to disrupt its food-supply system. Yet in Colombia’s informal food industry, it is hard even to trace the web of affected growers, wholesalers and retailers. Independent food stores account for 5 percent of sales in the United States, but half of sales in Colombia.
But now an MIT research team has produced a report, presented to Cartagena officials in April, detailing where its food comes from and how its new marketplace should work. Because food is sold in many ways, the researchers propose, the new facility should be organized around the types of transactions that occur in the market. The researchers believe this approach can help developing countries upgrade chaotic urban markets while preserving the commercial networks and jobs within them.
“If you propose changes that will completely disrupt the market, then you will end up with more poverty and violence in Cartagena down the road,” says Edgar Blanco, a research director at MIT’s Center for Transportation and Logistics. “So it is not just about a new location or a nicer building, but understanding market dynamics. Our challenge is to find a general approach that can work around the world.”
The plantain supply chain
To study the Cartagena market, eight professors from MIT’s Department of Urban Studies and Planning and Center for Transportation and Logistics teamed with colleagues from Colombia’s Universidad Tecnologica de Bolivar and 22 students, who took urban planning and logistics classes in 2009, then conducted surveys inside the market — sometimes in the middle of the night, when shipments arrive — in early 2010. The project was initiated in part by MIT’s Community Innovators Lab.
Those students included Lina Garcia, who grew up in Cartagena and who is now a senior majoring in engineering. “Being from Cartagena myself, I had assumptions about the market based on what I had seen and heard throughout my life,” explains Garcia. “However, with every visit to the market, I was surprised to find out how little I actually knew.”
What the researchers found is that foods move through Bazurto in at least four distinct supply chains, depending on whether they are fresh or industrially processed. Consider two supply chains, involving plantains (a banana-like fruit) and rice.
Both types of food arrive in Cartagena in quantities that cannot fit comfortably with the streets and old building of the Bazurto market. About 600,000 plantains are shipped to Cartagena fresh and sold by just 14 wholesalers every day in what is known as the “spot market,” in which retailers examine the plantains and negotiate prices. By contrast, rice is a commodity whose price is determined by global markets and not subject to negotiation in the market. About 10 to 15 trucks carrying between 700 and 2,000 bags of rice arrive at Bazurto in any given hour, on behalf of large firms who set its price.
These different practices create different demands. The MIT researchers think plantains should be sold to retailers all in one large area, but that rice wholesalers be scattered around the market. Why? For plantains, one central marketplace should create more efficient, transparent face-to-face bargaining. Meanwhile, about 44 percent of Cartagena consumers buy their rice from neighborhood groceries. These retail grocers save time (and hence money) by obtaining rice quickly from wholesalers located near other vendors.
Ultimately, a reorganized market should help consumers save money, although the MIT researchers cannot put a price tag on those savings until the new Cartagena market is in operation. Still, in urban food markets, “if inefficiencies and problems accumulate, prices will doubtless go up,” says Alejandro Guarin, a consultant who completed a doctoral thesis in 2009 on Colombia’s food retailers, for the University of California, Berkeley.
Logistics across Latin America
Guarin believes the MIT project lays a foundation for additional studies. “There are two kinds of questions the MIT practicum in Cartagena opens up,” he notes. One, he says, is the level of the market’s daily activity, which requires gathering more data. “There are no written records of transactions, so it’s very hard to figure out how many vendors there are or what volume they trade.” The second question is, more broadly: “How do you feed a city? This is a central problem of urban planning in developing countries.”
The two matters are related: One third of Cartagena’s residents do not eat three meals a day, and the MIT report helps assess how Cartagena’s food resources can reach consumers more efficiently. Blanco is studying more food markets in developing countries, in conjunction with MIT’s partner, the Center for Latin American Logistics Innovation, in Bogota, Colombia, though as he acknowledges, “The jury is still out on how replicable this can be.”
Cartagena’s officials, Blanco says, were impressed by the MIT report. But as the researchers know, there is no guarantee their proposal will be implemented. “It will take a lot of political capital and political will to make these changes,” says Martha Bonilla, a Department of Urban Studies and Planning lecturer and Colombia native who helped start the project. “I think we will succeed, though it will take time. But there is no doubt we have changed minds.”