Worldwide, 570 million farmers and millions of agribusinesses, traders and retailers supply 7.6 billion people with food. Digital solutions will dramatically reduce time, costs and waste in today’s highly complex food supply chains. This explains why data-driven logistic firms like Amazon or Alibaba have moved into food distribution. This trend is likely to continue, perhaps even gather pace.
Roughly a third of the edible parts of produced food is lost in supply chains. In poor countries, more food is lost on farms or between the farm and market due to lack of regular market access, inadequate post-harvest storage, poor transportation and lack of food processing facilities. In rich countries, more food is lost in retail shops and consumers’ homes.
Imagine the potential global impact of halving food waste. About 1.3 billion tons of food is wasted annually. How many of today’s 800 million malnourished people could benefit if we also assume that waste is transformed into supply?
Assuming that about 200 kg of food is needed per person in cereals-based diets, 650 million tons of food not wasted but suitable for consumption can feed 3 billion additional people. This is more than three times the number of today’s malnourished. There isn’t a linear relationship between food waste and hunger, but it is clear that there is no shortage of food in the world today.
How can this vision be realized?
Direct sales from farms to retailers using mobile platforms and farmers’ cell phones in remote areas of India bring supply costs down by 15 to 25 percent, translating into higher farm-gate prices, greater liquidity and more market transparency for smallholder farmers previously highly dependent on local traders and money lenders.
Digital solutions can also help to improve productivity by delivering weather forecasts, market information, finance and improved farm practices to farmers. Productivity increases on farms are reducing carbon emissions per unit of output and help to include previously unbankable rural poor in financial systems.
These developments will transform smallholder production systems and bring farmers nearer to markets and finance. It will disrupt food supply chains and offer opportunities for digital entrepreneurs to develop and scale-up food supply services.
Improved access to markets and finance can help even small farmers decide for themselves to whom to sell and when, and increases their bargaining power. Usually, at harvest times prices go down and vice versa. Making storage facilities bigger and better are profitable investments since they reduce post-harvest losses. The problem is that this requires reliable access to energy, which is in short supply in South Asia and sub-Saharan Africa. But in recent years, the availability of renewable energy and battery storage systems has increased, making off-grid cold store solutions competitive for more than 100 million farmers without access to electricity grids.
What if the advanced technologies that global suppliers use to ensure food freshness become available on smartphones for everyone? This would greatly reduce food waste and emissions. If we can find ways to encourage creative entrepreneurs to develop solutions to reduce food waste in places like China and India, 10 billion people could eat well and live comfortably on our planet.
Heinz Strubenhoff is a senior private sector specialist with World Bank Group, and this article appeared on and was excerpted from the Brookings Institution website. Access the complete article at this link: https://brook.gs/2CRCEJR