In the run up to our Summit on the Global Agenda, we asked you to put your questions to John Manners-Bell, from our Global Agenda Council on Logistics and Supply Chain Systems. Up to 50% of food never makes it to the end consumer. What do you want to know about fighting food waste?
Questions from our Facebook followers:
Narciso Lantigua: I think food is wasted for two reasons. 1. Underdeveloped infrastructure and inadequate distribution networks. 2. Overproduction due to protection of food producers in developed countries with generous subsidies. Can we improve the infrastructure to prevent losing so much food?
John Manners-Bell: Food waste as an issue probably represents the dichotomy between developed and developing countries more than any other. Whereas in large parts of the developing world, up to 50% of food never makes it to market, in the Western world a similar amount is wasted by retailers or consumers. One, you might say, is a humanitarian challenge, the other an ethical one.
The Logistics and Supply Council has been championing research into the former, while recognizing the importance of the latter. With populations forecast to explode in many parts of the world, helped by economic growth and prosperity, the job of feeding extra billions of hungry mouths in the years ahead cannot be left to advances in food-production technology alone. Focusing on productivity is only part of the answer, and it’s ultimately futile if food is damaged or perishes due to inefficient or dysfunctional distribution processes.
Transport infrastructure is a big part of the problem. Investing in roads, railways and ports can go a long way towards reducing time-to-market, and reducing losses. However, it is also a supply chain issue; in many markets the distribution channels are often fragmented, complex and inefficient, with few parties willing to invest in improvements. The value of the product is often so low that there is little economic imperative for anyone to take the financial risk of, say, building temperature-controlled facilities.
And this is the key point. Certainly, costs can be taken out of the supply chain by improving infrastructure, reducing bureaucracy and administration, stimulating (or at least facilitating) the growth of supply-side services, focusing on training, etc. But this must be accompanied by increasing the value of the supply chain itself. One way this can be achieved is by pushing processing up-stream – for example, by encouraging milling of grain to occur closer to the farm. This will also lead to more consolidation, creating an economic incentive for ensuring that the product gets to the right place at the right time in the right condition – basic tenets of supply-chain management practice. Many commercial farmers in Africa have achieved this for export markets; the goal will be to replicate it for the domestic market.
As part of the Global Enabling Trade project, supported by the Logistics and Supply Chain Council, research is currently being undertaken that examines a number of important food-supply chains in Africa. The results of the project will help to identify best practice – a first step along the road of addressing this critical issue.
Michael Nyarko-ampem: Wouldn’t it help if good roads were constructed to the farms and storage capacities expanded?
John Manners-Bell: Yes, investment in infrastructure will be essential to making sure crops can get to market before they deteriorate.
Amit Sachan: Would decentralized production and a diverse set of crops help the situation?
John Manners-Bell: Not necessarily. In Africa, the most efficient supply chains are those of the commercial farmers supplying international markets.
C.j. Wijtmans: Could we remove the tax from healthy food and raise it on luxury food, such as candy?
John Manners-Bell: This may be an issue in the developed world, but in most emerging markets the main concern is food security.
Author: John Manners-Bell is Chief Executive Officer of Transport Intelligence Ltd, and a member of the World Economic Forum’s Global Agenda Council on Logistics and Supply Chain Systems.
Image: Workers unload 2,494 tonnes of Thai rice at the Tanjung Priok harbour in Jakarta REUTERS/Crack Palinggi.