Reducing waste and loss in the agro-food sector is often seen as a solution to hunger and food security. However, the economic effects of reducing food waste and loss have not previously been studied. In a scientific publication, LEI researcher Martine Rutten gives insight into the possible effects.
Contrary to what has been stated by existing literature, the article shows that if a certain amount of food waste is prevented, so that this food comes on the market, this does not mean that food consumption and production will increase by that same amount. Instead, market prices will decrease and supply and demand will adapt to the change. These lower food prices could then even promote food waste. There may also be costs involved in reducing waste. These are all factors which must be taken into account.
If the consumer reduces food waste, for instance, she will not need to purchase as much food. This will have an effect on the producer, who would be selling less, and as a result on employment, as less production means less work. It is very uncertain whether a producer who invests in reducing production losses in the short term can profit from these investments in the long term. Production may be increased, but the reduced prices may outweigh the additional sales, with smaller returns as a result. These factors, combined with the national and international interactions between the various links in the chain, lead to the article's conclusion that the effects on food security and the well-being of producers and consumers are uncertain and should be studied further. Good data on food waste and factors causing it is essential in this regard, as is more knowledge about consumer behaviour and wider interactions in the chain. .In dealing with food waste, it is necessary to also look at the socio-economic impacts of any measures taken. This will enable policy-makers to make better decisions. It is important that policy-makers also look at the food chain as a whole when making decisions. And finally, it is important that policy does more than merely setting goals regarding food waste: without dealing with the underlying causes (the low regard for food in combination with the possible cost of waste prevention measures) it is unlikely that the problem of food waste can be solved or even reduced.