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Reducing Food Waste: The role of foreign investors in promoting efficiency

Agricultural investors can help to minimize food loss both on the farm and during transport and storage. Governments also have a role to play in promoting efficiency and reducing waste. This blog explores both sets of interventions. 

By William Speller on July 25, 2016

How would you feel if every time you left the grocery store someone grabbed a third of your bags and tossed them in the garbage? That’s how much food is wasted worldwide.

If even a quarter of global food waste was saved it would be enough to feed 870 million people; that could turn hunger into a historic artifact. It could also help save the planet. If food waste were a country, only China and the United States would produce more greenhouse gases.

Agricultural investors can help to minimize food loss both on the farm and during transport and storage. Governments also have a role to play in promoting efficiency and reducing waste. This blog explores both sets of interventions. But first a few words on the size and complexity of the challenges around food waste.

The scale and impact of wasted food

A third of global food production—about 1.3 billion tonnes a year—is  discarded before it is eaten. Almost half of fruit and vegetables grown are not consumed. It’s not just food we are wasting: we are also over-exploiting precious resources—land , water, seeds, energy, and fertiliser—because of the immense inefficiencies in the global food system. We are exacerbating conflicts over land and water resources in developing countries. Intensive agriculture is degrading our soils, tearing down our rainforests and depleting fish stocks to the point of extinction. The water used to produce wasted food is each year equivalent to three times the volume of Lake Geneva. The energy wasted to grow, process, package, store, transport and, finally, discard unwanted food is contributing to climate change. Perhaps most perversely, when discarded food ends up in landfill, as it often does, it produces methane—the most dangerous greenhouse gas with 25 times more global warming potential than CO2.

Yet people are hungry and we need to produce more food

The Food and Agriculture Organization (FAO) estimates that food wasted annually is more than twice the amount needed to feed the world’s 870 million undernourished people. Yet we are told we need to increase global food production by 70 to 100 per cent to feed the nine billion who will inhabit our planet by 2050.

Global figures of this nature are useful to highlight the absurdity of the global food system. But they gloss over a critical disconnect between where food is wasted and where more is needed. Per capita food wasted in Europe and North-America is 95-115 kg/year, but only 6-11 kg/year in sub-Saharan Africa and South/Southeast Asia. While many a frustrated parent may have sought to guilt-trip a child into eating their greens with the claim that “there are children starving in other countries,” even a child can deduce that the brussel sprout on their plate can end up in one of three places: their mouth, the bin, or the mouth of a defeated parent—none of which are in any other country. “Waste not” in the Global North does not equate with “want not” in the Global South.

Waste occurs at all segments of the food chain

Food is lost during production, harvest, sorting, shipping, processing, packaging, wholesale, retail and consumption. There are important differences in how food is wasted between developed and developing countries. In developed economies, most waste is at the consumption end of the food chain, in middle-income countries it is during processing and packaging (including determining what will be accepted by developed country consumers), and in developing countries most food is wasted through post-harvest losses due to inadequate transportation, storage and refrigeration facilities.

There are many reasons for food waste and plenty of blame to spread around. Depending on who you talk to, the main culprit may be supermarket cosmetic standards, confusing expiry dates, all-you-can-eat buffets, excessive portion sizes, meat- and dairy-based diets, unfaourable tax treatment for donations, fickle and vain consumers, over-stocking, poor transport, storage and refrigeration infrastructure, food standards, and so on.

Solutions and initiatives to tackle the issue

Solutions abound too, from beer made out of stale-bread, to the Eat More Offal campaign, to regulating how and where green beans are sliced, and everything in between.  Reducing food waste is firmly on the hipster agenda with past-expiry and ugly food supermarkets on the rise in Copenhagen, Berlin, Paris and San Francisco. Feeding the 5000, a global campaign which cooks street feasts from food that would otherwise have been discarded, has now visited over 30 cities.

The role and obligations of foreign investors in developing countries

In the wake of the food price crisis of 2008, and the ensuing contoversy surrounding “land grabbing,” investors in agriculture have come under pressure to invest responsibly. A myriad of principles and guidance documents have been spawned. A core element of responsible agricultural investment must be to play a role in reducing global food waste.

So what, concretely, can be done to ensure large-scale foreign investors put these principles into practice? How do we move beyond nice words about sustainable and efficient use of resources to actions that make a difference to reducing waste?

Here are some ideas for how governments and investors could reduce food waste in order to help eliminate hunger and more sustainably use our planet’s finite resource to feed the world.  

Investors can:

  • Provide training to farmers on storage and techniques to minimize post-harvest loss.
  • Help build better storage facilities in the communities where they operate.
  • Allow communities on the farm to collect produce that has been missed in the harvest.
  • Develop systems for the productive use of waste and by-products, such as bio-diesel from rice husks.
  • Play an active role in combatting cosmetic standards for food (not all bananas need to have a curve!).
  • Link up and finance food waste campaigns.

Governments can:

  • Require investors to have a food waste policy as part of their business plan, detailing how they plan to minimize waste.  
  • Promote and prioritize investment in storage, transport, refrigeration and other infrastructure to reduce post-harvest losses.
  • Improve national transport and trade infrastructure.
  • Encourage the use of food by-products for animal feed.
  • Prioritise investments with on-site processing facilities.

These are the seeds for an action plan to reduce food loss and waste.

To this end, IISD is working on a project to estimate the total cost of ending hunger worldwide. A key parameter in the model is an estimate of funding needs to pay for effective storage facilities in developing countries. Establishing how much money is required must be complemented with the means to raise the money. As such, IISD is also researching financing for infrastructure, including the development of financing tools and strategies for public and private investment in storage infrastructure. Food waste is egregious in many places and for many reasons, but it is the development of storage infrastructure in developing when most mileage is to be gained in alleviating hunger. 

William Speller is a consultant with IISD's Agricultural Investment team. 

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