Food Waste and its economic impact
By Geetika Muddam
Introduction
In a world where an estimated 828 million people go hungry daily, the World Food Programme states, “One-third of food produced for human consumption is lost or wasted globally, which amounts to 1.3 billion tons per year, worth approximately $1 trillion.” The astonishing amount of food waste lost yearly through production, distribution, and consumption results in substantial economic losses worldwide. This wastage not only squanders resources that could be consumed by hundreds of millions of people each day but also contributes to higher costs which can be troublesome for low-income consumers needing to buy food. Understanding food wastage's economic impact on the economy is crucial in developing strategies for even individuals to make a difference.
Why Is Food Wasted and Lost?
Food is wasted and lost in all supply chain stages, from production to consumption. Food loss is due to production, processing, storage, or distribution, while food waste is at the seller or consumer levels.
Food loss occurs due to various factors across the food supply chain, including inadequate infrastructure, poor storage facilities, transportation systems, and handling methods. Before the food reaches the market, 30-40 percent is lost due to processing, transportation, and post-harvest storage alone (FOA). These numbers as substantial much of the food that is lost is due to out-of-date practices, machinery, infrastructure, and environmental factors.
Food waste is due to consumer behaviors and poor food management. A major contributing factor includes the misinformation and aesthetic standards of fruits and vegetables in developed countries. Many foods that do not meet the aesthetic standards of consumers are thrown away, which accounts for around 10 million pounds of edible produce thrown away (Bhandarkar). 90% of the food that consumers throw away can still be eaten. Due to the consumer's prejudices, many sellers must ensure they do not sell bruised or oddly shaped produce even though it is edible. This accounts for many perfectly consumable produce being thrown away.
The Economic Impact
The exponential growth of food waste and loss has severe economic repercussions, directly impacting businesses and consumers throughout the supply chains. The FOA estimates that 30-40 percent of the production is lost before coming to market, resulting in substantial financial losses for farmers and producers making it harder for them to generate produce. These losses and supply chain challenges contribute to higher consumer prices. However, this impact goes beyond losses and costs — it represents a missed opportunity for economic growth. Utilizing this food effectively could contribute to economic development, expansion, job creation, and poverty reduction. These valuable resources can be redirected toward improving food security and economic stability by reducing food waste and loss.
Addressing the issues of food waste and loss requires an approach involving all members of the supply chain, from producers to consumers. Implementing high-end infrastructure with improved storage and transportation systems can help reduce food loss during production and distribution. Reducing food waste can be done by addressing the issue and raising consumer awareness about food waste behavior. Education on responsible food purchasing, storage, challenging aesthetic standards, and consumption practices should be encouraged. These practices can help reduce the amount of food lost and wasted daily.
Policy changes and initiatives that incentivize food waste and loss reduction should be put in place by governments, businesses, and organizations. These incentives can include tax incentives for businesses implementing these food waste reduction strategies, food donation programs for citizens, and innovating of new technologies to keep food from perishing for longer and transport goods safely. Along with these initiatives, farmers should receive government benefits that can provide better technology for their farms to yield more goods. When trying to solve these issues systematically, we can ensure that the majority of the economic burden of food waste and loss can be relieved and can direct nations towards more development and food security.
Conclusion
Food waste and loss have far-reaching economic and social consequences impacting consumers, businesses, and the world. Reducing food waste and loss can feed the hungry and relieve the environment but is a step towards further development.
Sources: