Costs of food waste along the value chain: evidence from South Africa

Abstract

In a previous paper (Nahman et al., 2012), the authors estimated the costs of household food waste in South Africa, based on the market value of the wasted food, as well as the costs of disposal to landfill. In this paper, we extend the analysis by assessing the costs of food waste throughout the entire food value chain, from agricultural production through to consumption at the household level. First, food waste at each stage of the value chain was quantified in physical units (tonnes) for various food commodity groups. Then, weighted average representative prices (per tonne) were estimated for each commodity group at each stage of the value chain. Finally, prices were multiplied by quantities, and the resulting values were aggregated across the value chain for all commodity groups, to obtain the total cost of food waste in South Africa. The total cost of food waste across the food value chain was estimated at R61.5 billion per annum (approximately US$7.7 billion); equivalent to 2.1% of South Africa¿s annual gross domestic product. The bulk of this cost arises from the processing and distribution stages of the fruit and vegetable value chain, as well as the agricultural production and distribution stages of the meat value chain. These results therefore provide an indication of where interventions aimed at reducing food waste should be targeted to achieve the maximum benefit.