4: The Impact Of Food Waste on the Economy

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Figure 1, World Map (Friesland Campina Institution For Dairy Nutrition and Health, 2020)

Introduction
Did you know that the world wastes almost one third of the food it produces, amounting to more than a 950 million US Dollars? The world produces 930 million tons of food waste every year, according to the 2021 Food waste index by the United Nation’s Environment Program, out of which about 569 tons comes only from households. Food waste takes up a larger area than China and uses up nearly a quarter of the world’s water supply. Food waste is also one of the leading producers of greenhouse gasses, producing more greenhouse gasses than the entire aviation industry.

Figure 2, Global Food Waste Statistics (IFCO, 2020)

Impact of Food Waste on Global Economy

China, India are the leading producers of food waste per year, producing about 92 million tons and 69 million tons respectively, with the United States of America at third producing 20 million tons of food waste per year. However, Australia produces the highest food waste per capita at about 103 kilos. Australia produces 8.2 million tons of food waste annually. It costs the Australian economy about $21 Billion a year just to send the food waste to landfills. This economic impact is much higher while taking into consideration the environmental impact that takes place due to the greenhouse gasses produced and air pollution caused, due to the food breaking down in the landfills.

Figure 3, Food Waste statistics per country (Statista, 2021)
 

A study in the Resources, Conservation and Resources journal assessing the economic impact of food waste on three European countries, namely Spain, Poland and Germany, revealed that it would save them $14719.43M, $7933.84M and $34618.73M respectively just by reducing food waste from households, food catering sector and whole sale/retail sector.

In the United States of America, 40% of the food produced is wasted, equating to more than $200 billion. This accounts for 1.5% of their Gross Domestic Product (GDP) and more than 20% of their solid waste to landfills. An estimate by the Business and Sustainable development Commission reveals that food waste in the United States will provide an economic opportunity of $400 Billion. It also revealed that by 2030, a 20% reduction could save the United States up to $300 billion annually. 

Israel is another country whose economy is ravaged by the food waste problem. They generate more than 2 million tons of food waste equating to a value of $6 Billion. The Environmental Protection Ministry revealed that the environmental costs generated just from food waste amounted to a massive $945 Million. About 6% of greenhouse gasses produced in Israel, are produced from food waste. This costs the Israeli economy almost $300 million. An additional $400 million was spent on land, water and other resources used. Food waste also accounted for 35% of municipal waste costing about $312 million. Further an amount of $245 million was spent on food waste collection and processing.

Sustainable Development Goal - 12

17 Sustainable Development Goals or SDGs for short, have been introduced by the United Nations in hopes of achieving a more stable and sustainable future. SDG 12 of 17 talks specifically about food waste reduction, and aims to halve per capita global food waste production at the consumer level and reduce food waste production along the supply chain.

Figure 4, Sustainable Development Goal 12 of 17 (United Nations, 2021)


Conclusion
In conclusion, it is evident that food waste has a devastating impact on the economy. Only by reducing and capitalizing on food waste can countries have a stable economy and a better financial future. Investing and promoting innovative ideas, companies and startups provides an incredible business opportunity that could prove extremely profitable.

By, 
Hanuman Rajagopal Kuntamukkula



References: 

Campoy-Muñoz, P., Cardenete, M.A. and Delgado, M.C., 2017. Economic impact assessment of food waste reduction on European countries through social accounting matrices. Resources, Conservation and Recycling, 122, pp.202-209. Available at: https://www.sciencedirect.com/science/article/abs/pii/S092134491730054X  (Accessed: October 2021)

 

Celia Jean (2020) What are the economic and environmental impacts of food waste in Israel? Available at: https://www.jpost.com/health-science/what-are-the-economic-and-environmental-impacts-of-food-waste-in-israel-648526  (Accessed: October 2021)

 

Eco Guardians (2019) Food Waste – Why should Businesses be Concerned? Available at: https://www.ecoguardians.com.au/post/food-waste-why-businesses-concerned (Accessed: October 2021)

 

EPA (2020) International Efforts Wasted on Food Waste Recovery. Available at: https://www.epa.gov/international-cooperation/international-efforts-wasted-food-recovery (Accessed: October 2021)

 

Katharina Buchholz (2020) Food Waste Most Prevalent in Affluent Countries. Available at: https://www.statista.com/chart/20825/food-waste-by-consumers-selected-countries/ (Accessed: October 2021)

 

Valuing the SDG prize in Food and Agriculture Unlocking Business Opportunities to Accelerate Sustainable and Inclusive Growth, A paper from AlphaBeta commissioned by the Business and Sustainable Development Commission. (2016). Available at: http://s3.amazonaws.com/aws-bsdc/Valuing-SDG-Food-Ag-Prize-Paper.pdf. (Accessed: October 2021)


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