1. Introduction [1]
Population growth, rising incomes (which lead to changes in dietary patterns), and limited availability of land and other natural resources endanger global food security. These challenges are particularly acute in developing countries and pose considerable risks to poor populations. A promising strategy to mitigate these problems is to reduce losses and waste from food production to human consumption: across the food value chain, there are considerable losses of agricultural production that could have fed vulnerable populations. The United Nations has recognized the importance of this approach in the Sustainable Development Goal target 12.3, aiming to “halve per capita global food waste at the retail and consumer levels and reduce food losses along production and supply chains, including post-harvest losses” by 2030.
Much recent attention has focused on the measurement of food losses (including post-harvest losses), which remains challenging. Many still quote an early global estimate of FAO (2011), which suggests that as much as one third of all food production gets lost or wasted before human consumption. More recent, but incomplete, estimates suggest losses could be considerably less than previously thought, albeit still significant, especially when also accounting for losses in food quality (Delgado et al. 2017; FAO 2019), Likewise, too little is known about which factors are associated with food loss and waste, especially in developing countries. Inadequate post-harvest handling practices and lack of cold or dry storage and transportation are among several known food chain weaknesses that are major causes of food losses. Yet, even where farmers and other supply chain actors are aware of the economic benefits (net of costs) of proper storage and handling practices, we do not always see widespread adoption of such practices. This maybe the case, for instance, if farmers perceive greater payoff from investing in increased production or do not have enough market access to reap the benefits of food loss reduction. Overlooking such economic drivers could lead to ineffective intervention strategies. This paper explores the implications for policy design and investment strategies for the development of more efficient food systems in developing countries.
2. What do we know about food loss?
The SDGs include the target of halving food loss and waste by 2030, but from what level? We know remarkably little about the extent of food loss and waste. In 2011 an FAO report came out stating that probably one third of all food produced either gets “lost” during production, distribution, or processing, or “wasted” during retailing and household consumption (FAO, 2011). Though everybody still cites this staggering number, it is based on rather thin evidence. A more recent FAO study now estimates global food losses (up to the retail stage) at 14 percent on average worldwide, but – for lack of reliable data – does not give an estimate for global food waste (FAO 2019). IFPRI research (Delgado et al. 2017, 2019), which influenced the latest FAO study, focuses on food loss during the first stages of the supply chain (farming, transportation, storage, wholesale distribution, and processing). Though applied to a limited number of staple crops and country cases, three key findings stand out from that research.
First, it confirms that food losses can be substantial in developing countries, ranging from between about 6% and 26% of the produced value of staple crops (see Figure 1). That estimate includes losses both in terms of quantity and quality. Quality losses may refer to less nutrient content, caused for instance by poor handling of crops on the field, and visibly poor aspect of food items, caused for instance by excessive exposure to heat or humidity during storage, transportation or selling in the marketplace, which in turn may imply products are sold at a lower price, thus constituting a loss in economic value for farmers or traders.
Second, when properly measured, such quality losses tend to be greater than quantity losses (Figure 1). This is an important finding. It means that not all food loss defined this way goes unused; rather much may be used for animal feed or is still consumed by people, though it presents less economic value to farmers and consumers have less nutrient intake and, possibly, are exposed to increased food safety risk.
The third main finding from IFPRI’s research is that, in developing countries, most of the losses of staple crop production (roughly between 55% and 85%) occur at the farm level, while the average loss at the middleman and processor levels lies around 7% and 19%, respectively. The causes, however, lie to a large extent beyond the farmgate.
3. What causes food loss?
Why do food losses occur? There is no simple answer here, as the reasons are multiple and vary greatly from context to context. In developing countries, much food gets lost because of poor handling on the farm, as well as rodents and fungi that damage crops in the post-harvest process. [2] But economic reasons often are also a cause. Here I will focus on these economic drivers, as these seem most critical for several reasons.
First, low market prices may cause farmers not to market all of their produce or not harvest everything, because it does not pay off. This may be the case, for instance, if the cost of seasonal labor for the harvest and post-harvest handling is too high relative to the farmgate output price. In Ecuador and Peru, for example, about half of potato farmers report that low prices and/or the high cost of labor are the cause why they leave produce on the field (Delgado et al. 2017).
Second, Goldsmith et al. (2015) provide evidence on how poor market incentives lead producers of soybeans and maize in tropical Brazil to accept significant post-harvest food losses in the intercropping season. In this case, farmers producing both soybeans and maize cannot afford any delay in harvesting soybeans so as not to miss out on the timely plantation of the more profitable second crop (maize) on the same land, as delay in planting would expose maize cultivation to higher risk of losses. As the opportunity cost of delayed plantation of the second, more valuable crop is higher, it may lead farmers to hasty and improper harvesting and handling of soybeans, especially if the cost of hired seasonal farm labor is high relative to the crop’s output price, and, hence, lead to greater post-harvest losses of soybeans.
Third, farmers and other supply chain actors may perceive that the expected benefits of adopting improved harvest and post-harvest handling practices that reduce food losses are not big enough be it relative to the cost of introducing such practices or to the expected returns of investing in inputs to increase output. A study by Chegere (2018) shows that maize farmers in Tanzania make rational economic decisions regarding whether or not to adopt better post-harvest handling practices and storage capacity. While certain practices (like timely harvesting, maize sorting and disinfecting storage facilities) have been shown to pay off economically, their adoption has remained low among Tanzanian corn farmers. Some farmers expect the gains will be too small compared with the expected gains from alternative investments that would lead to higher production, while others appear to stick to existing practices as a risk-averse strategy, being unable to foresee the economic gains. Sheahan and Barrett (2017) draw similar conclusions from a survey of evidence on post-harvest loss interventions in Africa. While several studies found favorable benefit-cost ratios for better on-farm post-harvest handling practices, particularly use of hermetic plastic bags, farmers may be incapable of internalizing the expected returns, explaining low uptake. Likewise, Nakasone et al. (2020) find that post-harvest losses tend to be higher among maize-producing farmers with larger production capacity in Malawi, Nigeria and Tanzania. They see as evidence confirming that farmers expect higher gains from investing in output increases than efforts to minimize post-harvest losses.
Fourth, the same studies also conclude that food losses diminish significantly where farmers have better access to markets (e.g. being closer to roads) and where there is capacity to store and process agricultural produce. Those conditions are more favorable the better integrated the food supply chain. Conversely, losses are larger when there is no proper development of cold- or dry-chain storage, transportation infrastructure and food processing capacity. As food chains develop, one also sees farmers engaging in better handling practices, seeking better storage and being required to undertake better quality control and package or protect produce when taking it to market. Also, where costs of transportation and distribution are lower, one observes fewer pre- and post-harvest losses (see e.g. Rosegrant et al. 2015).
4. What can be done about it?
Understanding the causes also provides the basis for finding the solutions. There are simple and often low-cost technological solutions. For instance, research at IFPRI showed that through quality-based contractual arrangements, loss of quantity and quality of beans production in Guatemala dropped by almost 10%. Similar impacts are found when introducing the use of hermetically sealed bags for maize in Ethiopia, and even much bigger impacts of use of solar-powered cold storage for fruits and vegetables as implemented by Coldhubs, [3] a social enterprise in Nigeria.
While there can be simple solutions, getting them to work for food markets at large is more complex. Isolated interventions may not suffice, and farmers and other food system actors may not adopt better practices if they do not see enough profitability in investing in better, loss-reducing practices, as pointed out by several studies (see e.g., Nakasone et al. 2020, Sheahan and Barrett 2017, and Chegere 2018).
Furthermore, other assessments indicate that the introduction of better practices require adjustments throughout the supply chain for these to be effective and profitable to all food system actors involved. Bradford et al. (2018), for instance, conclude that the adoption of “dry chain” systems [4] in developing countries requires multiple changes in food supply chains to encourage its broad adoption and ensure effective food loss reduction while preserving food safety. This can be explained as follows. Smallholder farmers currently often have limited access to drying and storage facilities, so their choices are to sell their products to traders immediately after harvest or to store them for own consumption or later sale but at high risk of spoilage. While they would benefit from drying, there are disincentives for farmers to invest in commodity drying. If sold by volume, low moisture content is not rewarded, and if sold by weight, the farmer loses money on every kilogram of water that is removed. The availability of humidity meters or indicator strips, or other means to test or guarantee dryness (e.g. through certification) could enable price compensation according to product dryness even in rural markets and incentivize on-farm drying.
Similar requirements for changes throughout the supply chain were found with the implementation of the Purdue Improved Crop Storage (PICS) program supported by the Bill and Melinda Gates Foundation. [5] The PICS program is based on farmers purchasing hermetic storage bags and reusing them for several years to recoup their initial investment (Baributsa et al. 2014). The harvested crops are stored on-farm in the PICS bags and marketed in bulk with the farmer retaining the bags for reuse. A problem with this practice is that it makes the product susceptible to rehydration and pests downstream in the marketing chain when left in open storage (e.g. keeping the bags open when selling in the marketplace), thus requiring behavior change by vendors. Alternatively, in a recycling system, the bags could be collected at the processing plant or end-use sales point (say, near urban areas or transport centers) and returned to farmers for reuse. This would create additional entrepreneurial opportunities for providing mobile drying services, bags and containers in agricultural areas and recycling containers back to farmers. Another option would be to turn traders or end users (e.g., millers and food processors) in the value chain into owners of the bags or containers, who would provide them to contracted farmers and recycle them, with costs recouped from the reduced losses and higher product quality obtained.
Adjustments will also be required at the processing stage. Food processors often reject high percentages of purchased commodities due to quality standards and, where applicable, mycotoxin contamination, like aflatoxin (as often found in improperly handled maize or groundnuts). The financial costs of these losses could be avoided through investments in drying services or providing packaging for free or at low cost to farmers. The latter model has been successfully implemented by some seed companies in Bangladesh, where the companies provide containers and drying beads to their contracted seed producers to efficiently dry their seeds. Containers and beads are returned to the company for reuse along with the higher quality dried seeds (Van Asbrouck and Kunusoth, 2015).
These examples show that for food loss prevention measures to work it is critical that the solutions:
- Provide enough incentive to farmers to reduce food losses and improve food safety (e.g. through quality certification and a price premium on better quality products)
- Are cost effective (for farmer as well as other value chain actors and consumers)
- Work across value chains and leverage private initiative to provide temperature-controlled storage and transport, and adequate handling in wholesale, processing, and retail
- Are considerate of trade-offs with food access (not raising prices disproportionately)
- Are consistent with food safety standards
These pre-conditions suggest that reducing food loss should be part of interventions that improve the functioning of the food value chains at large. The consequent recommendation is that interventions for the reduction and prevention of food loss should be part of broader food and agricultural policies in support of the development and integration of food systems, rather than specifically targeting food loss mitigation.
In principle, everybody stands to gain if we can reduce the loss of food quantity and quality. It would make food systems more efficient, making the cost of food go down and increasing the nutritional value of food. That will be a gain for consumers, but it may also be a gain for farmers because they can sell more and produce at lower cost. There can be environmental gains if it means less resources get wasted and there is less pressure on the environment. However, it would be way too simplistic to state that it will solve problems of world hunger, climate change and environmental degradation. For farmers to really gain they will need to see the development of the full value chain. The cost of cold- and dry-chain development, better packaging, and so on can be significant. If only applied to a part of the market food cost per unit will be high and confront consumers with higher food prices, which will limit food access for poor people. There may be no environmental gains if less food gets lost but the same amounts still get produced to meet higher food demand. All of this is to reiterate that one needs a food systemwide approach to tackle the problem of food loss and waste in order to obtain the desired societal gains.
References
Baributsa, D., Djibo, K., Lowenberg-De Boer, Moussa, J.B., Baoua, J. 2014. The fate of triple-layer plastic bags used for cowpea storage. Journal of Stored Products Research, 58: 97-102.
Bradford, K.J., Dahal, P., Van Asbrouck, J., Kunusoth, K., Bello, P., Thompson, J., Wu, F. 2018. The dry chain: Reducing postharvest losses and improving food safety in humid climates. Trends in Food Science & Technology 71: 84-93 (January).
Chegere, M. 2018. Post-harvest losses reduction by small-scale maize farmers: The role of handling practices. Food Policy 77: 103-115.
Delgado, L., Schuster, M., Torero, M. 2017. The Reality of Food Losses: A New Measurement Methodology. IFPRI Discussion Paper 1686, Washington D.C.: International Food Policy Research Institute.
Delgado, L., Schuster, M., Torero, M. 2019. Quantity and Quality Food Losses Across the Value Chain: A Comparative Analysis. Background paper prepared for the State of Food and Agriculture 2019. International Food Policy Research Institute.
FAO. 2011. Global food losses and food waste – Extent, causes and prevention. Rome: Food and Agriculture Organization of the United Nations.
FAO. 2019. The State of Food and Agriculture 2019: Moving forward on Food Loss and Waste Reduction. Rome: Food and Agriculture Organization of the United Nations.
Goldsmith, P.D., Martins, A.G., de Moura, A.D. (2015). The economics of post-harvest loss: a case study of the new large soybean-maize producers in tropical Brazil. Food Security, 7(4):875-888.
Nakasone, E., Delgado, L. and Vos, R. 2020. Determinants of Farm Post-Harvest Losses: A Tale of Three African Countries. Food Policy (forthcoming).
Rosegrant, M., Magalhaes, E., Valmonte-Santos, R., Mason-D’Croz, D. 2015. Returns to investment in reducing postharvest food losses and increasing agricultural productivity growth. Food Security and Nutrition Assessment Paper. Copenhagen Consensus Center, Copenhagen.
Sheahan, M., Barrett, C.B. 2017. Food loss and waste in Sub-Saharan Africa. Food Policy 70: 1-12.
Van Asbrouck, J., Kunusoth, K. 2015. Scaling and commercialization of drying technologies for improved horticultural seed and processing quality. USAID-Horticulture Innovation Lab.
End notes
[1] This paper is based on the author’s presentation at the Pontifical Academy of Sciences (PAS) Conference on Reduction of Food Loss and Waste (Vatican, Casina Pio IV, 11-12 November 2019).
[2] See Nakasone et al. (2020) and Sheahan and Barrett (2017) for reviews of evidence for determinants of food losses in low-income countries (mostly in Africa).
[3] See http://www.coldhubs.com
[4] “Dry chain” is referred to as the process of initial dehydration of typically non-perishable food products like grains to levels preventing fungal growth followed by storage in moisture-proof containers. This is analogous to the “cold chain” in which continuous refrigeration is used to preserve quality in the fresh produce industry. However, in the case of the dry chain, no further equipment or energy input is required to maintain product quality after initial drying as long as the integrity of the storage container is preserved.
[5] See https://www.purdue.edu/postharvest/purdue-improved-crop-storage-pics/