Returns to Investment in Reducing Postharvest Food Losses and Increasing Agricultural Productivity Growth

Abstract

Mason-D'Croz. All rights reserved. Readers may make verbatim copies of this document for non-commercial purposes by any means, provided that this copyright notice appears on all such copies. 2 AbstractIn this paper, we assess the levels of infrastructure investment and rates for return on investments to reduce postharvest losses (PHL). Food security impacts and rates of return to reducing PHL are compared to rates of return to productivity-increasing research and development (R&D) investment. First we undertake of review of the literature on the magnitude of PHL. Next we undertake an econometric analysis of the impact of infrastructure investments on PHL using a panel data set. Third, we quantify the investments required for any given level of PHL reduction by combining marginal effect analysis based on the econometric estimation with data on unit costs for specific infrastructural variables. Fourth, we undertake a cost-benefit analysis of the required infrastructural investments to assess whether or not significant efforts in PHL reduction are economically feasible; and compare these to the rates of return to investments in R&D.These scenarios show that investment in infrastructure for PHL reduction contributes to lower food prices, higher food availability, and improved food security, and has positive economic rates of return. However, improvements in food security and marginal returns to investment in agricultural research are considerably higher for investment in agricultural research than for investment in PHL reduction. Reductions in PHL are not a low-cost alternative to productivity growth for achieving food security. Rather, reduction in PHL through improved infrastructure requires large public investments and is complementary to investments in long-term productivity growth to achieve food security. 3The 2008-2011 food price spikes brought the issue of postharvest losses (PHL) back to the forefront of policy debate, and observers are again calling for a reduction in PHL as a tool to feed the expanding global population. Food losses due to improper postharvest handling, lack of appropriate infrastructure, and poor management techniques, have once again become a matter of serious concern. Food losses, defined as "any decrease in food mass throughout the edible food supply chain," can occur in any point of the marketing stages-from production (e.g., crop damage, spillage), postharvest and processing stages (e.g., attacks from insect or microorganisms during storage), distribution, and retail sale until home consumption (e.g., spoilage, table waste) (Rosegrant et al. 2013). Kummu et al. (2012) suggest an additional 1 billion people could be fed if food crop losses were halved, which could potentially relieve some of the pressure on the significant increase in production that would be required. Achieving lower levels of food losses, however requires both investments in technologies that help prevent losses as well as in overall infrastructure. Understanding the magnitude of these investments and their impa...

A Systems Approach to Food Loss and Solutions: Understanding Practices, Causes, and Indicators

“…Furthermore, while the indicators are suggested because they are expected to be correlated to food losses, this remains to be confirmed. With limited existing work on evaluating the impact of improving infrastructure on food loss and waste [111], as a next step, more effort should be made to estimate the magnitude of effect on food loss from efforts towards improvement in these indicators.…”

Post-harvest management and post-harvest losses of cereals in Ethiopia

“…Therefore, infrastructure and access to markets is not only of major importance for stimulating agricultural productivity, growth and development but also for reducing post-harvest losses (Dorosh et al 2012;Tefera 2012). Thus, the reduction of post-harvest losses in Ethiopia requires large public investments but these are complementary to investments required for achieving productivity growth and food security (Rosegrant et al 2015).…”

Measuring postharvest losses at the farm level in Malawi

“…Even at the farm level, different surveys may ask about crop losses in different ways, which can result in mistargeted interventions to reduce losses. Given the expense of potential strategies for loss reduction, accurate and consistent measurement is an important input when weighing the cost of solutions against the value of reduced losses (Parfitt et al 2010;Rosegrant et al 2015).…”