Re: Food losses and waste in the context of sustainable food systems - E-consultation to set the track of the study

Jospeh Schmidhuber FAO, Italy
26.04.2013

Dear Members of the  HLPE Steering Committee,

 

I am referring to the e-consolation process you have initiated on “Food losses and waste in the context of sustainable food systems” http://www.fao.org/fsnforum/cfs-hlpe/food_losses_waste_scope. I am also referring to the paper on the scope proposed by the HLPE Steering Committee http://www.fao.org/fsnforum/cfs-hlpe/sites/cfs-hlpe/files/files/Food_losses_waste/topic_en_food_losses_waste.pdf

In keeping with the basic scope outlined in the guidelines, I would like to suggest that 3 analytical pieces be commissioned by the HLPE. They include:
 
A.Case studies to empirically measure waste and losses.
 
This paper would measure the extent of waste and losses along the various stages of the food chain. It would cover 5 developing countries, ideally representative of 5 different developing regions (e.g. sub-Saharan Africa, Near East & North Africa, South Asia, East Asia & Pacific, Latin America and the Caribbean) as well as 2 developed countries (e.g. 2 countries in North America and Europe). The paper would propose a statistically sound methodology to gauge nationally representative quantities and values of food losses and waste and do so at 3 key stages of the value chain:
 
  1. Post harvest, farm, stores
  2. Distributors, processors, wholesalers and retailers
  3. Households, individual and common (cantinas, hospitals, prisons, etc.) 
 
In tandem with measuring the extent of losses and waste at different stages of the value chain, the study would collect the parameters that characterize the technologies used at the 3 different stages of the food handling chain. Data collection would, where possible, also include contextual information, such as data on the overall infrastructure endowment (access to roads, public storage, electricity, communication, etc.), overall farm mechanization, etc.
 
B.Establishing the economic case for the reduction of losses and waste
 
Based on the results gathered and presented in the case studies of the first paper, this paper would examine the basic economic rationale for the reduction of food losses and waste at different stages of the value chain. Without preempting the results of this paper, basic economic analysis suggests that the economic rationale for waste and losses reduction at different stages of the value chain can be fundamentally different, with different beneficiaries within a society and different marginal reduction/abatement costs. The paper will cover the following points:
 
  1. Introducing the reasons why losses occur (low food prices, inadequate infrastructure, handling and storage facilities, etc.)
  2. Introducing the externalities associated with waste and losses, differences in economic and financial costs. To illustrate this point: waste in developed countries households is often a reflection/the result of low food prices. Food prices are too low to capture the full economic costs/the scarcity of the natural resources needed for the production of food, i.e. water scarcity and pollution, land degradation, loss in biodiversity, carbon emissions, insufficient land fill, etc. While important, here waste and losses are primarily a sustainable development issue, they affect heavily though not exclusively developed countries and their reduction is unlikely to help address hunger and other forms of malnutrition. These losses/waste could be contrasted by losses that occur at the upper part of the value chain (farm, storage, distribution). Such losses reduce farm incomes (lower volumes of sales) and food availability. Their reduction is likely to have a stronger impact on hunger reduction, both by raising farm incomes and lowering food prices.
  3. Measuring the economic and the financial costs and benefits of food losses and waste: empirical analysis based on the 7 case studies.
  4. Identifying economically optimal levels of waste and losses at the various stages of the food chain. This includes an illustration of increasing marginal abatement costs depending on the level of waste reduction targets, an understanding that there are economically optimal level of waste/losses. Results include a differentiation of optimal waste levels across population groups within a country and across the countries identified in the case studies. The results will help inform the Zero Hunger Challenges and in particular the Zero Waste Challenge. The results will also help understand that it is important to differentiate between an (uninformed) advocacy goal and an economically sound target.
 
C.Examining policy interventions to reduce waste and losses
 
Based on the results of the case studies in the first paper and the economic analysis in the second paper, this study will examine possible policy interventions and evaluate their differential impacts. Specifically, it will:
 
  1. Identify costs and benefits of different policy interventions at different stages of the food value chain
  2. Identify differential impacts of different interventions alternatives, costs and benefits (beneficiaries). It will provide a differentiated analysis of costs and benefits within and across countries.
  3. Identify optimal policy measures wrt to different policy objectives, e.g. hunger reduction or sustainable resource use.