Reducing the costs of food waste: An economic assessment of alternative approaches

Date: 4 May 2017 – 1pm – 2pm

Location: Lecture Theatre 3, UNE Business School, EBL Building (W40)

The costs of food waste in food value chains have been highlighted recently, particularly amid concerns over global food security due to climate change and global population growth projections. As more information has become available on the extent of waste, public and political pressures mount to do something about it as part of the drive to achieve more sustainable food production, marketing and consumption. Currently, around one third of global food production is wasted. The dispersion of food waste is highly variable among socioeconomic classes, value chains and different stages of the value chain.

Food waste occurs at virtually all stages in food value chains; however, in lower income countries waste occurs primarily in the early periods of the chain due to causes such as poor packaging; insufficient storage facilities; lack of adequate refrigeration; unsuitable infrastructure and conditions of market venues. In higher income countries, waste tends to occur mostly in the later stages of the chain due to manufacturing; display conditions, quality standards and leftovers/excessive planning. In many circumstances, simultaneous efforts are required from diverse sources to make significant inroads in tackling the problem because its causes and extent vary according to the stage at which they occur, and actions at one stage have implications for the ability of participants at other stages to take effective action.  Hence, the problems of food waste are deep-seated and complex.

A review is made of the analytical framework for assessing initiatives that have so far been taken in food value chains to reduce food waste. As a starting point, we take a  ‘whole-of-chain’ approach and consider the problem of food waste as an external cost – both within food value chains (negative chain externalities) and, because of spillovers, to society as a whole (negative social externalities). The initiatives that we review to tackle the problem cover a wide range of actions. Individuals can take action to reduce their own food waste, sometimes in response to government urgings, and governments can legislate to force individuals and firms to cut waste. But most actions require some form of collaboration whereby parties create ‘clubs’ to reduce waste. These ‘clubs’ are typically drawn from participants in food value chains, but governments and non-government organisations have also had important roles to play. These ‘clubs’ may be limited to few, many or all chain participants. Evidence we report suggests that larger chain benefits and social gains are likely to be associated with widespread involvement of participants in the chain.
Professor Euan Fleming has major research interests in efficiency and productivity analysis in agricultural production, value chain analysis for food, beverages and fibres, the economics of livestock production and wine economics.