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Modern wholesale food markets: a key to reduced food waste

In south and south-east Asia, and throughout sub-Saharan Africa, most consumers buy an estimated 80 percent of their food in traditional open markets, small, neighborhood convenience stores and from informal food sellers. A smaller but growing number of people purchase food in modern groceries and supermarkets. Since a large share of the food we eat transits urban, wholesale food markets, their operations and performance are critical to the ability of the food system to deliver safe, nutritious and affordable food. Their functioning and efficiency also affects food loss and waste throughout the system.

Most of us are aware of the scale, urgency and tremendous challenges of reducing food waste. FAO reports that globally, 1.6 billion tons of food worth an estimated $2.6 trillion are lost or go to waste every year; this is greater than the annual value of all goods and services produced on the continent of Africa (nominal GDP). The resources used to produce this quantity of wasted food account for 8 percent of global greenhouse gas emissions (GHG), a large and avoidable contribution to climate change..

Urban wholesale food markets play a crucial role as the center point of supply chains in our agri-food system. They provide a platform for all market actors (producers, traders, logistics firms, processors, retailers, restaurants and consumers) operating in traditional, modern and informal market segments to physically assemble, sort, grade, repack, redistribute and resell food in smaller lots. Given this role, many cities in Asia and Latin America have been upgrading their urban wholesale food markets to improve performance and reduce food loss and waste.

Several other reasons compel municipal governments to modernize markets as a critical piece of urban infrastructure, whether to reduce urban congestion, sustain or spur job creation in the agri-food system or reduce food waste as the largest share of cities’ solid waste. In Monrovia, Liberia, an estimated 44 percent of food waste sent to landfills is organic or food waste. Reducing the volume of this waste and recycling it through composting or waste to energy decreases the amount and cost of disposing waste in bursting urban landfills (which generate an estimated 3 percent of GHG emissions).

New or modernized market facilities, productivity-enhancing technology, innovative market procedures and governance, and updated policies and incentives have combined to increase efficiency, improve performance and reduce food waste. The innovations include use of reusable, wooden and cardboard boxes and plastic crates (rather than bulk transport); incentives for private sector investment in green, energy-efficient cold chain storage and low temperature warehouses. Most modern wholesale food markets have invested in integrated electronic information management and logistics tracking systems that facilitate inventory management, supply and demand forecasting and financing for market actors. Regulatory changes include: food grades and standards for diverse size, quality and appearance of fruits and vegetables (e.g. valuing imperfect food or inedible parts for sale in different markets – “ugly fruit”); new labeling regulations; and measures to reprice food waste for disposal in landfills.

Modern wholesale markets are also developing diverse measures to reduce, repurpose and recycle waste. They may send waste for composting, for animal feed, to anaerobic digestors to produce bio-energy or to food banks located within the market before it goes bad.

For market actors, these improvements help to minimize loss and waste, reduce costs and improve their margins and profits. They also make food more safe and affordable to consumers. Finally, as the center point of the agr-food system, these innovations drive efforts to reduce losses and waste throughout supply chains, starting with post-harvest losses at the farm level.

An article by James Tefft, Senior Economist and World Bank Liaison Officer

Food and Agriculture Organization of the United Nations

Washington, DC USA

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