Lower food prices increase consumers' real incomes and help employers hold down nominal wage rates, thereby fostering expanded employment. For both types of intersectoral transfers to be economically sustainable, they must be fueled by increasing productivity throughout the food system . This involves improved marketing, processing, and input delivery technologies and institutions as well as better farm-level technologies. The food system needs to keep up with economic growth by developing new products and services in response to urbanization and income growth. Over-investment in any one role may lead to high costs, in terms of slowing the economic growth that is necessary for alleviating widespread chronic hunger.
Chronic hunger is fundamentally a problem of low real incomes, in both rural and urban areas.
The major way to fight hunger is through increasing real incomes and expanding employment. Historically, countries that have achieved large increases in real incomes have done so through structural transformation of the economies. The reduction of consumer expenditures on food items is essential to expanding real incomes and employment in other sectors of the economy. Generating the productivity increases needed to bring about these lower food prices requires an ongoing stream of technological and institutional changes throughout the food system . The transition from farm to non-farm employment is not automatic.