What Is Missing in Food Loss and Waste Analyses? A Close Look at Fruit and Vegetable Wholesale Markets

Abstract

Food loss and waste (FLW) has been the subject of significant research, with recent empirical evidence analyzing the determinants of FLW in many different countries. Much of this literature examines FLW at the farm, food processing, and consumer level. However, to the best of our knowledge, no study thus far has addressed this issue at food wholesale markets. This paper fills this knowledge gap by examining food loss at fruit and vegetable wholesale markets. Using a dataset with individual auction transactions from Taiwan, we examine the extent to which average daily market prices, product quality, and disaster shocks are associated with food loss. Results point to a negative effect of daily market prices on food loss. Furthermore, disaster shocks can lead to greater food loss, particularly typhoons. These effects are heterogeneous across the distribution for the weight of food loss.Research has also examined the extent of food losses at different stages of the food supply chain. At the farm production level, food losses range from 20 to 40 percent for meat, dairy, cereal, and vegetable products [15][16][17]. These production losses occur when agricultural shocks such as weather conditions prevent crops from being harvested, or when produce is "graded out" based on quality [16]. Other literature has examined post-harvest losses of crops such as maize and sweet potato due to poor management skills and market mismatches [18,19].However, despite this extensive research, no studies have been done on FLW at wholesale markets. There are two primary reasons to believe that FLW can be a severe problem at this stage in the food supply chain. First, many wholesale markets are unplanned urban spaces with no special facilities. Thus, these markets often lack even a single refrigeration unit for their products, particularly cold storage systems that can preserve and store goods for extended periods. Second, the auction system that typically governs wholesale markets can also generate FLW. Since consumers bid on both the quality and quantity of items, this means that products can be left unsold. Wholesale markets facilitate FLW because they have the unique cost of clearing their inventory of perishable products at the end of the business day. This clearance is done to ensure that there is adequate space for the following day's auction items.This paper quantifies the determinants and extent of food loss for wholesale markets using a case study in Taiwan as an illustration. Using a large-scale dataset of individual transactions from a fruit and vegetable wholesale market, we estimate the weight of food loss using the ordinary least squares and quantile regression models. Results show that average market prices are negatively associated with the weight of fruit and vegetable food loss. Compared to high-quality grades of fresh fruits and vegetables, low-quality products are less likely to be sold within the auction market. Regarding the sourcing of agricultural products, we find that fresh fruits and vegetables provided by farmer'...

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“…At the wholesale and retail level, the food loss is smaller compared to the other stages of the food supply chain [ 98 , 113 ]. Therefore, the availability of products to potentially be valorised is lower.…”

“…Buyers bid on both the quality and quantity of items, resulting in unsold products. Moreover, wholesale markets clear their inventory of perishable products at the end of the business day to ensure that there is adequate space for the following day’s auction items [ 113 ]. Major players in the wholesale and retail sector include the fruit and vegetable auctions, which receive and sell fresh fruit and vegetables.…”

“…Other reasons for discarding crops include deviating colours, shapes or sizes that do not comply with the auction’s criteria. Moreover, damaged crops are also discarded [ 113 , 114 ]. According to Stenmarck et al [ 6 ] and Caldeira et al [ 98 ], approximately 5% of the total amount of food waste in the EU (non-valorised) is generated in the wholesale and retail sector.…”