Introduction
A system ripe for transformation
Transformation of food systems is needed at a global scale to foster healthy people and a healthy planet. One of the greatest challenges humanity faces is that of feeding its growing population – projected to reach 9.7 billion people in 2050 – under a changing climate, while remaining within “planetary boundaries” and meeting the Sustainable Development Goals. Until now, food production has outpaced population growth, but it has done so at great environmental cost. Environmental destabilization, moreover, is making it ever harder for food systems to deliver, and to do so sustainably. Climate change and resources degradation threaten to further slow already decelerating agricultural yield growth, beckoning farmers to resort to environmentally harsher practices. They are also increasing the vulnerability of the roughly 500 million family farms responsible for about half the world’s food supply (Graeub et al. 2016). Meanwhile, despite food systems’ impressive capacity to feed the world to date and a long-term decline in undernutrition, hunger has been rising since 2015 and more than 820 million people had insufficient food in 2018 (SOFI 2019).
Overall, at least 2 billion people were food insecure, many of them struck by the “hidden hunger” of micronutrient deficiencies (SOFI 2019). What is more, over one in two people globally may be experiencing various forms of diet-related disease – now the leading cause of death globally (GBD 2017 Diet Collaborators 2019) [1] – as a result of consuming low-quality diets that are nutritionally unbalanced, characterized by nutritional excesses as well as deficiencies. Considering these and other challenges, a wide range of scientists and policy makers are coalescing around the view that major shifts in global food systems are needed to make them more compatible with a changing climate and societal aspirations.
Food loss and waste: commonly overlooked but with unprecedented potential
Among the host of immediate actions that could help make food systems more climate-friendly and sustainable, reducing the volume of food that is lost or wasted is gaining attention as a significant yet largely overlooked candidate. Food loss typically refers to the discarding of food upstream in the food supply chain, from the farm to wholesale stages. Food waste typically refers to the discarding of food further downstream in the supply chain, at the retail and consumer levels. In either case, food is discarded for various reasons, ranging from spoilage – actual or perceived – to real or suspected changes in food’s quality, such as its appearance, flavor, texture, nutritional value, or safety.
The magnitude of food loss and waste (FLW) is undeniable. In 2015 the world lost or wasted an estimated 1.6 billion tons of food – nearly one-third [2] of what it produced – and that amount was projected to reach 2.1 billion tons by 2030 (Hegnsholt et al. 2018, FAO 2011). FLW is also a global phenomenon, occurring across countries of different income levels, albeit in different forms and at different rates. Overall, rates of waste have been lower, per capita, in low- and middle-income countries (LMICs), but that per capita gap is expected to narrow going forward as their incomes rise and diets shift.
A Global Framework to analyze FLW
The Global Framework, developed by the World Bank, focuses on how a reduction in FLW contributes to policy goals. It is a model that captures the interconnected nature of food waste along the food supply chain, including at the stages of the farm, transportation, handling, and storage (THS), processor, retailer, and consumer. It allows for exports and imports between countries and shows the relationship between reductions in loss and waste levels at various stages of the value chain and associated impacts on prices, production, consumption, and priority policy objectives. The Global Framework assesses a government’s commitment of reducing food loss and waste by simulating the reduction in losses and waste rates by 50%. It then assesses how reductions at different stages of the supply chain compare in terms of their impact on outcomes of interest to support a government’s key priorities.
The waste reduction scenarios, simulated by the Global Framework, show results for a series of policy priorities of interest, including farmer welfare (as measured by net profitability), food security (as measured by net consumption prices), trade (imports or exports), natural resource stress (as measured by farm production), GHG equivalent emissions, and total food waste. By jointly considering all stages of the supply chain and assessing impacts on several policy priorities at the same time, the model provides insights on the tradeoffs that result from different food waste reduction policies. This Framework compares situations of implementing food loss and waste reductions against a baseline of no interventions. A detailed analysis of costs, benefits and effectiveness of alternative interventions would be the next step towards a holistic FLW strategy.
Food Smart Country Diagnostics
The case of Rwanda: feeding its people
Rwanda’s growing population – set to nearly double from 12 million today to 22 million in the next thirty years – will exacerbate the food security challenge. Despite significant progress since the early 1990s, Rwanda’s people remain challenged by food insecurity, malnutrition and undernourishment. Rwanda’s food security index lies below the average for Sub-Saharan African countries: 18.7% of Rwandan households remain food insecure, with most of them located in the western and northern parts of the country. At the same time, undernourishment affects 36.9% of the population and 35% of children are stunted (WFP 2018). Additional challenges will arise from rapid urbanization and climate change impacts. By 2050, 30% of the population will reside in urban areas (UN 2018) – compared to 18% today – with prospects of higher incomes, and a shift toward higher value diets. Likewise, Rwanda is ranked 114th globally in terms of its vulnerability versus readiness to adapt to climate change (Chen et al. 2015, ND 2017). Being primarily rainfed, higher frequency of severe droughts and outbreaks of pests and diseases increases the vulnerability of Rwanda’s agriculture sector.
Rwanda loses and wastes about 40%of its food supply, totaling around 3 million tonnes of food per year. Therefore, as shown in Figure 1, food loss and waste uses 564,400 hectares of land, generates 1.2 mt CO2 equivalent, and costs Rwanda around 12% of its annual GDP.
As opposed to increasing food production from the agriculture sector and increasing food imports, reducing FLW would bring the country a variety of positive impacts: increased food yields from the stock of land and water already under farming, reduced pressure on the import bill by increasing the availability of domestic food, bringing benefits to remote and food-deficient households, and a reduced carbon footprint of the food supply that could potentially open doors to some sources of climate mitigation-related financing.
However, for the Rwandan Government to make fully informed decisions based on their policy priorities and considering the situational and interconnected nature of FLW interventions described on the first section, we used the Global Framework to analyze three different commodities – a combination of staples and perishables. Each of these crops has a significant importance for Rwanda. The two staples, maize and rice, are specifically mentioned in Rwanda’s Nationally Determined Contribution (NDC), as part of the Paris Agreement, and have therefore been prioritized. Tomatoes, a perishable, represent a large portion of perishables production for Rwanda and have experienced a growing demand from increased incomes and an expanding middle class within the country’s population.
As shown in Figure 2, losses and waste occur at different locations along the value chain between the three commodities selected. Tomatoes have the largest total loss rate of 49%, followed by maize and rice, with 25% and 18%, respectively. Total loss rates are calculated by applying the respective loss rates at each stage above to the volume that makes it past the prior stage.
As discussed, demand in Rwanda for food will increase. The Global Framework and accompanying analysis propose a balanced approach to managing Rwanda’s future food requirements where part of the food demand will be met by reduced food loss and waste.
Reducing FLW of tomatoes
A key assumption is the degree of openness of the food economy, and this will depend to some extent on the food commodity being considered. Looking at production, consumption, and trade patterns, it is clear that for perishables, Rwanda is effectively a dual economy – a closed economy for remote regions with poor infrastructure and connectivity, and an open economy with access to international markets, supporting infrastructure, and a rising middle class in urban areas.
Results from the Global Framework show that for Rwanda, as a small country trader, there is an import substitution potential with cuts in losses at any stage of the value chain, shown in Figure 3. Results also show significant improvement in food security with reductions in FLW at the retail level, compared to other stages. A cut in rates of farm losses increases farm production and hence farmer welfare, but at the expense of increased natural resource use. In addition, with reductions in FLW at all stages, GHG emissions and total food waste decrease.
For rural areas of Rwanda, because of poor connectivity, a closed economy model may be more representative of economic conditions in the tomato (and perishables) sector. In a closed economy scenario, as shown in Figure 4, results highlight a tradeoff between farmer and consumer welfare. Cutting losses at the farm level results in lower market prices, and hence lower production, which triggers a loss in producer welfare. With these lower market prices, food security improves more significantly in a closed economy compared to an open economy scenario. Finally, GHG emissions increase slightly in a closed economy scenario for decreases in rates of waste at the farm and THS levels.
For staples, Rwanda is considered a small, open economy because staples tend to be transported better than perishables and Rwanda’s staples import quantities have no significant impact on world prices. Similar to tomatoes, in the cases of maize and rice, a reduction in farmer loss and waste rates leads to an increase in sales coupled with a small increase in natural resource stress (Figures 5 and 6), but it is found to be partially offset by a large reduction in imports. Farmers see welfare improvement with food loss reductions at both the farm and THS levels and consumers benefit through lower consumption prices. A reduction in waste rates at any point of the supply chain triggers lower GHG emissions as well as total food waste levels.
Identifying drivers and potential interventions
Food loss and waste in Rwanda is in part a consequence of the perception of risk across the value chain by multiple actors. Drivers that trigger FLW occur all throughout the value chain. The best interventions would be measured considering their costs and their impact shown through the analysis done by the Global Framework.
Conclusions
- Rwanda will not face a negative tradeoff between reducing losses and waste for any of the three commodities studied and achieving, at the same time, the six policy priorities of farmer welfare, food security, trade, natural resource stress, GHG emissions, and food waste.
- Rwanda is effectively a dual economy in the case of perishables; a closed economy in lagging remote regions with poor infrastructure and connectivity, and an open, urban economy with access to international markets supporting a rising middle class.
- The government of Rwanda seeks to transition to an export economy. This model suggests that for tomatoes, by cutting losses and waste in half, other things being equal, Rwanda can switch from a small importer to a significant exporter.
The case of Vietnam: more from less
Over the last 30 years Vietnam has experienced remarkable poverty reduction and economic growth, accompanied by significant improvements in food security. The economy transitioned from largely agrarian-focused to more diversified, with greater GDP contribution coming from the services and industry sectors over the past two decades (WBG 2016). The agriculture and food sector will remain, however, a key contributor of GDP growth and employment over the next 30 years and a critical driver of food security domestically and globally. Vietnam’s burgeoning middle class in urban centers, with increased incomes and shifting diets away from staples toward proteins and perishables, as well as a booming tourism industry, is also heavily influencing the country’s food demand. Vietnam now needs to shift to different patterns of growth with accompanying reforms of its food system in tandem with the changes taking place in the Vietnamese economy.
Vietnam is heavily land-constrained and needs to get more value from its relatively scarce resources, especially land. Agricultural growth has historically stemmed from expanded or more intensive use of land and other natural resources, and relatively heavy use of fertilizer and other agro-chemicals. This has led to a large environmental footprint from the sector (WBG 2016). In the future, further growth of food production and exports will need to be based on generating more from less; that is, producing higher value food items per unit of natural resources and labor utilized. But while the agriculture sector’s performance has been impressive, Vietnam’s once robust growth has weakened.
Food production is now facing environmental constraints to growth, and it must pivot to increase both the efficiency and sustainability of outputs to meet its development goals. One way to move towards a more from less objective is by reducing FLW along the supply chain. Vietnam loses and wastes about 25% of its food supply, totaling around 27.5 million tonnes of food per year. As shown in Figure 7, this means FLW uses 30.4 thousand square km of land, generates 15.8 mt CO2 equivalent, and costs the country around 4% of its annual GDP.
As Vietnam is grappling with a natural resource scarcity challenge, urbanization, and climate change, the country could consider the role that food loss and waste reductions would play in helping meet its agro-food sector and development goals. Food loss and waste presents a promising option when considering the country’s policy priorities, which are centered around (i) domestic availability of high quality and diversified food; (ii) global leadership in agriculture exports with a focus in high value products; and, (iii) environmental sustainability through reduced stress on natural resources, less waste contamination and lower GHG emissions.
Vietnam is a top exporter of rice and seafood, and the government is strategically shifting from the production of low value, raw exports to higher value processed exports. The share of rice in Vietnam’s food calorie consumption is expected to decrease from 52% in 2009 to just over 33% by 2030, when animal products and seafood will account for 33% of caloric consumption. The global framework analyzed two main commodities: rice and farmed pangasius (catfish), to illustrate potential policy impacts when reductions of losses and waste are implemented along the value chain. As shown in Figure 8, losses and waste occur at different locations along the value chain between the two selected commodities. Catfish has the largest total loss rate of 32%, followed by rice, with 21%.
Given Vietnam’s imperative to shift of to produce more from less, the driving policy priorities will likely be reducing environmental stress while meeting increasing demand for food in urban centers as well as sustaining export growth. Part of these goals will be met by reducing food loss and waste.
Reducing FLW of rice
As Figure 9 would suggest, with a reduction of FLW at any stage of the value chain, results highlight clear tradeoffs between improved food security, exports and natural resources stress, and a reduction of farmer welfare. The largest improvements in consumption are achieved with cuts in waste rates at the THS, retail, and consumer levels. With reductions of losses at every stage, farm production declines marginally (at most by -0.2%), as a result of lower farm sale prices, implying reduced stress on natural resources from lowered production. GHG emissions can also increase, albeit negligibly. When a 50% reduction in losses is made at the farm level, more rice flows through from the farm to the THS and processor stages, and eventually down to the consumer. Both the farm and processor stages have relatively higher GHG emission intensities compared to other stages, thereby marginally increasing GHG emissions when a reduction of FLW is made at the farm level. On the contrary, total food waste declines significantly with reductions at any stage along the value chain.
This simulation demonstrates the viability of Vietnam’s more from less strategy through reduced FLW for rice production, increasing food availability for domestic consumption and international export while using the same or fewer natural resources.
Reducing FLW of catfish
Like rice, food availability improves with reductions of losses at any stage of the catfish value chain. However, the impact on farmer welfare, exports, and natural resource stress depends on the stage of the supply chain where the reduction takes place. Reductions of FLW at the farm, THS, retail, and consumer levels improve farmer welfare. However, a cut of FLW at the processor level reduces farmer welfare, as shown in Figure 10. Exports decline marginally with the reduction of losses at the retail and consumer levels because the associated increase in catfish availability increases retail sales and consumption, and causes domestic production to decline, leading to a minimal decline in exports. Net resource stress increases in all cases, except for reductions made at the processor level. All these impacts are very small in magnitude.
Reductions in GHG emissions and in total food waste levels are explicit for catfish, with a reduction of FLW at all stages. Vietnam can gain more food from existing natural resource use through reductions in FLW in the catfish value chain, always increasing food availability domestically and providing more food for exports.
Conclusions
- Vietnam’s future food needs will be driven by a booming urban population, growth in the tourism industry, and the need to sustain exports. Rural demand for food is expected to decline. Historical gains in agricultural output came at the cost of environmental degradation and pollution, which is now an unsustainable model for Vietnam, as it has maxed out natural resources.
- For Vietnam, the Global Framework shows that the best strategy to increase food availability for urban centers and exports through reduced FLW would be to cut FLW in half at every stage of the rice and catfish food supply chains. This will be neutral with respect to natural resources and greenhouse gas emissions.
- Since most impacts on policy goals are very small in magnitude for Vietnam, it is acceptable to consider a reduction of food loss and waste as neutral for farmer welfare, exports, and natural resource stress, and clearly positive in improving food availability, which matters for urban centers. While reductions in greenhouse gas emissions are evident in the case of catfish, the Framework shows that reducing losses and waste in the rice value chain is not an effective way to reduce GHG emissions because impacts are minimal or slightly negative.
Next steps
These results indicate that reducing food loss and waste bears potential benefits for Rwanda, Vietnam and Nigeria, and identifies the tradeoffs between competing policy goals implied by reductions in waste at different stages of the supply chain. Going forward, the design of these countries’ food loss and waste strategies should be based on a careful analysis of alternative interventions, their associated costs, benefits, feasibility of implementation, and effectiveness in reducing losses and waste, as well as the public and private investments necessary for its implementation.
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End notes
[1] Poor diets were responsible for 10.9 million deaths, or 22% of all adult deaths in 2017; they also resulted in 255 million disability-adjusted life years (DALYs). Cardiovascular disease was the leading cause, followed by cancers and diabetes.
[2] In 2011 an FAO-commissioned report by the Swedish Institute for Food and Biotechnology estimated that roughly one-third of edible parts of food produced for human consumption globally was lost or wasted, corresponding to about 1.3 billion tons of food per year. Though debated, this study is the only one providing a global estimate covering all food production sectors and stages of the supply chain (SOFA 2019). The 2015 estimate cited here is a Boston Consulting Group projection using the FAO estimate and other FAO data