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Impacts of Reducing Food Losses Across the Value Chain

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IFPRI's Director of Markets, Trade and Institutions Division (MTID), Rob Vos discussed findings from IFPRI's study and explains the complexity of measuring food loss, and identifying its causes and consequences.

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Impacts of Reducing Food Losses Across the Value Chain

  1. 1. Impacts of Reducing Food Losses across the Value Chain Rob Vos International Food Policy Research Institute (IFPRI)
  2. 2. Value Chain Analysis Production Post- harvest & Processing Distribution & Logistics Processing Consumption Food Losses: Losses in production (including PHL), distribution, and processing. - More prevalent in developing countries - Representative samples of farmers, middlemen and processors Food Waste - More prevalent in developed countries - Not covered
  3. 3. Evidence from China, Ecuador, Ethiopia, Guatemala, Honduras and Peru • Food losses are substantial (6% - 26% of production) • Especially when we account for quality losses • Most of the losses occur at the farm level (56% - 86% of losses) 10% 18% 14% 16% 10% 22% 22% 26% 12% 17% 22% 21% 12% 19% 17% 19% 8% 18% 21% 21% 13% 21% 19% 22% 6% 9% 9% 9% 11% 16% 17% 16% 0% 5% 10% 15% 20% 25% 30% S C A P S C A P S C A P S C A P S C A P S C A P S C A P S C A P ECU, Potato PER, Potato GUA, Beans GUA, Maize HON, Beans HON, Maize ETH, Teff* CHN, Wheat Food Losses (% of value of total production) Farmer Middleman Processor Source: Delgado, L., M. Torero and M. Schuster (2017). The reality of food losses: A new measurement methodology. IFPRI Discussion Paper 01686. Washington, DC: International Food Policy Research Institute. Self reported Quality disaggregation
  4. 4. Where do loses occur? Photo credit: El Diario, Bolivia Photo credit: The Hindu, India Photo credit: Victor Agreda Photo credit: Eduardo Nakasone Photo credit: Eduardo Nakasone Photo credit: Eduardo Nakasone Photo credit: Eduardo Nakasone Photo credit: Eduardo Nakasone Photo credit: Eduardo Nakasone In the field? Post Harvest at farm? Transportation and storage? Processing? Most of the losses occur at the farm level (56-86%)
  5. 5. Determinants vary by crop, context, and production stage Main determinants: - weather - poor knowledge of how to avoid pests & plagues - poor technology (no mechanization, low quality seeds) - poor infrastructure (storage, transportation, processing) - low and volatile prices Source: Delgado, L., M. Torero and M. Schuster (2017). The reality of food losses: A new measurement methodology. IFPRI Discussion Paper 01686. Washington, DC: International Food Policy Research Institute.
  6. 6. Less food loss = higher farm income? • Yes: - by definition if preventing food loss as quality loss (lower value) - much, if not most of losses happen at the farm level • Depends: - If “saved” food can be sold in market (without price loss) - More likely if food loss prevention through - improved handling, packaging on farm (sealed bags, crates, etc.) - adequate storage (dry and cold chains) - adequate transportation - greater processing capacity - certification of food quality/safety and contractual arrangements - Even more so, above also helps reduce market price volatility • But: - Cost of technologies/interventions should not be prohibitive - Thinks need to work along the entire supply chain
  7. 7. Less food loss = crop substitution? • We do not know - Little evidence about patterns of crop substitution in response to reductions in food loss • Depends on - the extent of adoption of new technology and demand elasticity of crop - shift to higher value added crops (e.g. fruits and vegetables) more likely if also cold chains are also developed
  8. 8. Less food waste = lower prices and farm incomes? • We do not know - Little evidence • YES - If significant food waste reduction, prices would drop and farm incomes may drop for that food product (ceteris paribus) • BUT - Consumer purchasing power would rise and demand could shift to higher value added foods - Impacts on nutrition outcomes could be ambiguous - Impacts on environmental pressures could be ambiguous
  9. 9. Reducing food loss cannot be sole focus • There are simple solutions reducing food loss, but benefits not always around the corner • Farm level benefits require full value chain development and market access • Income and nutritional gains will depend on broader food system improvements • Environmental gains not achieved by just reducing food loss; agriculture and food systems at large need to be made sustainable

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