Resources Research

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Posts Tagged ‘cold chain

Throwing it away – food losses, food waste and retail responsibility

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Good job by FAO on this topic, an extremely important one. ‘Global food losses and food waste’ is the title of a new report by FAO and it is an eye opener indeed. FAO has said that food waste is “more a problem in industrialised countries, most often caused by both retailers and consumers throwing perfectly edible foodstuffs into the trash”. This is true, but only partly.

It is in fact a problem of societies that have industrialised their food handling, processing and retailing systems to the average level that is seen in the OECD economies, and that this problem is therefore as much visible in the urban food consumer markets of say Sao Paulo and Mumbai and Jakarta as it is in North American or west European cities and towns.

The study has shown that per capita waste by consumers is between 95-115 kg a year in Europe and North America, while consumers in sub-Saharan Africa and South and Southeast Asia each throw away only 6-11 kg a year. The ‘only’ is relative of course. If these averages are mapped to populations and their food wasting habits, then for Bangladesh in 2011 we have a total wastage of 1.275 million tons! What was the total harvest of vegetables in Bangladesh in 2008? It was 1.1 million tons (FAOstat)!

Per capita food waste

Total per capita food production for human consumption is about 900 kg a year in rich countries, almost twice the 460 kg a year produced in the poorest regions. In developing countries 40% of losses occur at post-harvest and processing levels while in industrialised countries more than 40% of losses happen at retail and consumer levels. Food losses during harvest and in storage translate into lost income for small farmers and into higher prices for poor consumers, said the report. Reducing losses could therefore have an “immediate and significant” impact on their livelihoods and food security.

There are wider connections between food loss + waste and natural resources and energy. Food loss and waste also amount to a major squandering of resources, including water, land, energy, labour and capital and needlessly produce greenhouse gas emissions, contributing to global warming and climate change.

Components of food waste/loss

What can be done? For a start, selling farm produce closer to consumers, without having to conform to the quality standards of retail markets, is a good suggestion. “This could be achieved through farmers’ markets and farm shops” said the report, which is in fact one of the strengths of the Transition movement in the West.

The real problem lies in the retail labyrinth in urban areas, particularly in fast-industrialising Asia. Here, in rather myopic copycat fashion without any learning having taken place, food is wasted due to quality standards that over-emphasise appearance. My guess is that this report will not have reliability of the kind it ought to for India and China, simply because in Asian cities and towns, a large network of scrap vendors (for food too) exists which will place food rejected by the retail markets into channels used by the urban poor, by small roadside eateries and by micro-businesses in the informal food processing industry.

What the study is cler about is that “consumers in rich countries are generally encouraged to buy more food than they need”. The ‘Buy three, pay for two’ promotions are one example, while the oversized ready-to-eat meals produced by the food industry are another. Restaurants frequently offer fixed-price buffets that spur customers to heap their plates. Generally speaking, consumers fail to plan their food purchases properly, the report found. That means they often throw food away when “best-before” dates expired.

There are some useful numbers in here. The study has shown that the per capita food loss in Europe and North-America is 280-300 kg per year. In Sub-Saharan Africa and South and Southeast Asia it is 120-170 kg per year. The total per capita production of edible parts of food for human consumption is, in Europe and North-America, about 900 kg per year and, in sub-Saharan Africa and South and Southeast Asia, 460 kg per year. Per capita food wasted by consumers in Europe and North-America is 95-115 kg per year, while this figure in sub-Saharan Africa and South and Southeast Asia is 6-11 kg per year. Food waste at consumer level in industrialised countries (222 million tons) is almost as high as the total net food production in sub-Saharan Africa (230 million tons).

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The food industry in India and its logic

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Tractor on a road to the city, Kanpur district, Uttar Pradesh

Tractor on a road to the city, Kanpur district, Uttar Pradesh

The Economic & Political Weekly (EPW) 09 October 2010 issue carries a commentary I wrote as a backgrounder to the price rise of food staples. Here is part of the commentary:

On multiple fronts, the union government is proceeding to forge new compacts with the private sector food industry, whether global, regional or national. There is a new set of investors whose claims in the emerging food industry are being staked, and which are being encouraged by state governments eager to display their foreign direct investment (FDI)-friendliness. These are investors, promoters, asset management professionals who have learnt the patterns of the 2007-08 commodities (food included) boom and who are now well equipped to take positions, both financial and real, in the emerging food industry.

An indication of the size and scale of the national market for food (production, collection, processing, distribution, retail) being envisaged can be gauged from a “discussion paper” circulated by the Department of Industrial Policy and Promotion (DIPP) in July 2010. The paper, “Foreign Direct Investment (FDI) in Multi-brand Retail Trading”, has been circulated to “generate informed discussion on the subject” which will “enable the Government to take an appropriate policy decision at the appropriate time”. As this article shows, these decisions have already been taken and investment in the direction revealed by the paper has been rolling out for months.

Supported by the Ministry of Agriculture, the top echelons of India’s national agricultural research system and dedicated agricultural trade and investment bodies, the union government has tackled the arguments against FDI in retail by describing the “limitations” of current conditions in the Indian retail sector. That there has been a lack of investment in the logistics of the retail chain, leading to “an inefficient market mechanism”. The point is made that India is the second largest producer of fruit and vegetables in the world (about 180 million tonnes or mt) but has “very limited integrated cold-chain infrastructure” with only 5,386 stand-alone cold storages which together have a capacity of 23.6 mt. It points out that post-harvest losses of farm produce – especially fruits, vegetables and other perishables – have been estimated to be over Rs 1,00,000 crore per annum, 57% of which is due to “avoidable wastage and the rest due to avoidable costs of storage and commissions”.

A couple working in their paddy field, North Goa

A couple working in their paddy field, North Goa

From 2009, the Ministry of Agriculture’s approach to its subject has shifted perceptibly – from its stated protection of the interests of the farming household and the rural and urban consumer – towards the food industry. Employing the reasons listed above, all of which contain some reflection of actual conditions, the massive apparatus of the ministry and its appurtenant research system is now ushering in private participation and control of areas that were hitherto in the public domain. When read with the rapid movement of finance between the money markets and the commodity markets, with the extension of infrastructure and property conglomerates into the processed food “value chain” domain, and with new alliances between agricultural research institutes and market entrepreneurs, the outlook for India’s small and marginal farming households is bleak.

The concentration of funds, food handling and transport systems and growing corporate control from farm to fork can clearly be seen in an address by the Union Agriculture Minister, Sharad Pawar, at the Indian Council of Agricultural Research (ICAR) – Industry Meet on 28-29 July 2010. The meet focused on four theme areas: seed and planting material; diagnostics, vaccines and biotechnological products; farm implements and machinery; and post-harvest engineering and value addition.

Pawar said that the ministry recognises the role of the private sector in critical areas of agricultural research and human resource development. The conventional approach of public sector agricultural R&D has been to take responsibility for priority setting, resource mobilisation, research, development and dissemination. He then explained that agricultural extension, which has been neglected for several years now, is “no longer appropriate”. It is here that the impact of the Indo-US Agricultural Knowledge Initiative, now in its fifth year, can be recognised. The alternative, Pawar advised, is public-private partnerships through which public sector institutes (such as those in the ICAR network) can “leverage valuable private resources, expertise, or marketing networks that they otherwise lack”.

Coconut trees along a bund between field and stream, North Goa

Coconut trees along a bund between field and stream, North Goa

This is the undisguised merchant reasoning behind the creation of “Business Planning and Development units” in five ICAR institutes (Indian Agricultural Research Institute, Indian Veterinary Research Institute, Central Institute for Research on Cotton Technology, National Institute of Research on Jute and Allied Fibre Technology, Central Institute of Fisheries Technology). These units will tackle intellectual property management, commercialisation of research, find investors and begin businesses. India’s national agricultural research system, therefore, has decided to now become a broker of its own output (publicly funded) and a speculator seeking profits from the country’s agricultural and food price crises.

If the Ministry of Agriculture has its way, rural India will be a patchwork not of villages and hamlets but of “intelligent agrologistic networks combining consolidation centres, agroparks (agroproduction and processing park) and rural transformation centres”, which is how the MTMs and their typical built-up footprints have been described by one enthusiastic bank. The techno-industrial idiom cannot conceal the union government’s intention to encourage a dangerous new dimension to urbanisation, by provisioning infrastructure to support an internal trade in agricultural products, and doing so by allocating a greater share of scarce funds to support favoured business and trading constituents rather than to the rural constituents who need it most, the smallholder farmer and local agro-ecosystems.

Supported by the vast and powerful machinery of the Ministry of Agriculture, emboldened by the global trading successes of commodity cartels which learned their tactics in the Multi Commodity Exchange of India (Mumbai), the National Commodity and Derivatives Exchange (Mumbai), and the National Multi Commodity Exchange of India (Ahmedabad), the new entrepreneurs in India’s agribusiness sector are promoting MTMs as potentially attracting “leading foreign retail chains to anchor and plan their supply chain at and through the agrofood parks” and exploiting the MTMs’ “township model approach to attract Indian MNCs and foreign food processing companies”.