Understanding the issue before taking action

Food loss and waste: what’s the difference?

The idea of food being lost or wasted sounds simple, but in practice there is no commonly agreed definition.

Essentially, food loss and waste is the decrease in quantity or quality of food along the food supply chain.

Food loss occurs along the food supply chain from harvest up to, but not including, the retail level.

Food waste occurs at the retail and consumption levels.

Although there may be an economic loss, food diverted to other economic uses, like animal feed, is not considered as food loss or waste, nor are the inedible parts of food products.

in focus

Reducing food loss and waste at scale

This report confirms that food loss and waste is indeed a problem.

The broad estimate FAO provided in 2011 suggested that around 1/3 or 30 percent of the world’s food was lost or wasted every year. This can be considered a preliminary estimate that raised awareness of the issue.

To provide more clarity on the subject, that figure is in the process of being replaced with two separate SDG indicators, the Food Loss Index and the Food Waste Index. These two indices will allow us to measure more precisely how much food is lost in production or in the supply chain, or is wasted by consumers or retailers.

The Food Loss Index is calculated by FAO and provides new estimates for part of the supply chain, from post-harvest up to (but not including) retail.

The Food Waste Index, calculated by UNEP, measures food waste at retail and consumption levels. Estimates for this index are forthcoming.

These more precise figures will allow us to better measure our progress towards Sustainable Development Goal 12, which sets out the target of halving per capita global food waste at retail and consumer levels by 2030, as well as reducing food losses along production and supply chains.

Where and why food loss and waste occurs

At the farm

Important causes of on-farm losses include inadequate harvesting time, climatic conditions, practices applied at harvest and handling, and challenges in marketing produce.

In storage

Significant losses are caused by inadequate storage, as well as decisions made at earlier stages of the supply chain that cause products to have a shorter shelf life.

In transit

Good infrastructure and efficient trade logistics are key to preventing food loss. Processing and packaging play a role in preserving foods, and losses are often caused by inadequate facilities, technical malfunction or human error.

In the shop

The causes of food waste at the retail level are linked to limited shelf life, the need for food products to meet aesthetic standards in terms of colour, shape and size, and variability in demand.

In the home

Consumer waste is often caused by poor purchase and meal planning, excess buying (influenced by over-large portioning and package sizes), confusion over labels (best before and use by) and poor in-home storing.

Food loss and waste along the supply chain -
A meta-analysis

If we want to reduce food loss and waste, then we need to know where it occurs and where interventions will be the most impactful.

To gain further insight into the location and extent of food loss and waste across stages in the food supply chain, as well as between regions and commodity groups, FAO conducted the below meta-analysis of existing food loss and waste studies all over the world.

See the full results of the meta-analysis

How to interpret Figure 6

Actions and consequences: food loss and waste reduction beyond SDG12

Impact on global food security and nutrition

Measures designed to combat the problem of food loss and waste can have varying effects on food security and nutrition. What the impacts are, and who is affected, depends on where in the food supply chain the reduction in losses or waste takes place and where nutritionally vulnerable and food-insecure people are located.

Potential effects of reduction initiatives include changes in food availability, access, utilization and stability.

Importantly, not everybody stands to gain as these scenarios show:

Scenario one

At the farm

By reducing on farm losses, farmers can improve their diets due to increased food availability and gain higher incomes if selling part of their produce.

It can lead to increased supply and lower prices further along the food supply chain and eventually for consumers.

Scenario two

At the processing stage

If a processor reduces losses this will lead to increased supply and lower prices further down the food supply chain and eventually for consumers.

However, it may also result in farmers seeing a reduced demand for their produce, thus lowering income and worsening food security.

Scenario three

At the consumption stage

Reducing consumers’ food waste may improve their food availability and access, in addition to that of possible direct beneficiaries of food redistribution schemes.

However, farmers and other supply chain actors may be worse off as they are selling less and/or at lower prices.

Farm

Processing

Consumption

Impact on a geographical level

Any initiative designed to significantly reduce food loss or waste will affect prices all along the supply chain. These changing prices are known as price transmission. The exact impact of a food loss and waste reduction will depend on how closely markets are integrated and how effectively price changes are transmitted.

A key factor is distance or proximity to the location of the reduction.

For example, reducing losses on small farms in lower-income countries may have a strong local food security impact, as surplus food will be available in the local area. But reducing food waste from consumers in high-income countries does not mean that the surplus food is then available for poor and food-insecure people in a distant country, meaning their level of food insecurity remains the same.

The level of food insecurity a country faces can be relevant for determining their food loss and waste reduction strategies.

Want to know more about food insecurity? See The State of Food Security and Nutrition 2019

Impact on the environment

Food loss and waste entails poor use of resources and negative environmental impacts. It is forecast that a growing population and rising incomes will lead to increased demand for agricultural products, putting more pressure on natural resources.

This is why reducing food loss and waste is crucial. Not only will it improve our use of natural resources, but it will directly contribute to lower GHG emissions per unit of food consumed. This is because more food reaches the consumer for a given level of resources used.

However, it is worth remembering that improved efficiency does not necessarily reduce the total resources used or GHGs emitted. The environmental impact will ultimately be the result of price changes associated with the reduction of food loss and waste, which will indirectly determine its effect on natural resource use and GHG emissions.

When designing interventions, clarity in the environmental objectives is key

An environmentally oriented policymaker should first consider which environmental objective to target (carbon, land or water footprints) and define which commodities to focus on.

If you were a policymaker, which environmental objective would you like to target? Choose below and see where best to focus your efforts.

The effectiveness of reducing food loss and waste in generating desirable environmental outcomes depends on how it affects prices

An intervention to reduce food loss or waste, if sufficiently large, will affect prices upstream and downstream in the supply chain relative to where the intervention occurs.

These changing prices, and the stage at which the initiative takes place, will determine the overall environmental impact.

Because of these price effects, to reach environmental objectives, food loss and waste reductions need to take place downstream in the supply chain relative to where the environmental impact occurs.

Land use and water:

Since the environmental impact on land and water occurs mostly in primary production, no matter which area of the supply chain the initiative targets there will always be a positive impact. This is because they are right at the beginning of the chain, and subsequent lower prices will encourage producers to decrease production and consequently their use of natural resources.

Carbon reductions:

If the aim of the initiative is to reduce the carbon footprint, interventions at the consumption stage will have the biggest effect. This is because the emission of greenhouse gases increases throughout the supply chain.

As a rule of thumb, interventions have the biggest impact if they target critical loss points that come immediately after environmental damage.

How to make change happen

This report is based on an incremental approach that supports the business case for private investments and efforts to reduce food loss and waste through private incentives. It expands the rationale to one for public interventions to reduce some of the barriers that prevent producers and consumers from reducing food loss and waste, provide public goods or reduce negative externalities.

With this, it is possible to provide some guiding principles for policymakers to intervene.

1. A focus on food security will tend to favour interventions early in the food supply chain, where positive food security impacts will be felt throughout the rest of the supply chain.
2. For environmental sustainability, it is better to intervene at critical loss points that occur downstream of where most of the environmental damage takes place on a given supply chain. Actions later in the supply chain have the effect of reducing demand for the output coming from the environmentally damaging part of the chain, for environmental damage associated with:
   • Excessive water use at the farm level, any reduction of losses or waste after the farm level (transportation, processing, storage etc.) can have a positive effect on water demand.
   • GHG emissions from transport and storage, then interventions at wholesale, retail, and consumer level have a positive effect.
3. Location matters when pursuing food security and nutrition or environmental objectives, the only exception being a fall in GHG emissions, which has the same impact on climate change wherever it occurs.

Different countries will have different objectives to guide their choices.

Low-income countries will likely focus on improving food security and nutrition, in addition to the sustainable management of land and water resources. This calls for a focus on reducing food loss and waste early in the supply chain, including at farm level, where losses tend to be the largest and impacts will be strongest.

High-income countries with low levels of food insecurity will likely place the emphasis on environmental objectives, in particular reducing GHG emissions. This will call for interventions later in the supply chain, in particular retail and consumption, where levels of loss or waste are expected to be the highest.

There may be trade-offs between objectives, and choices may have to be made about which objectives to prioritize. A critical issue is that of policy coherence, which requires that all options are weighed together for their impact so that solutions which promote one objective do not unintentionally harm another.

linkDOWNLOAD FULL REPORT