How to create a more efficient and resilient food system
Our food system has many areas of inefficiency. This can lead to external risks and post-harvest loss impacting agricultural yields. If we are to create a more efficient food system, we must address these issues. Through SCOPE assessments, we can increase the efficiency of agribusinesses, which will help increase the efficiency of the overall food system.
Post-harvest loss in the current food system
The current global food system is inefficient in many areas, which leads to a great deal of preventable food waste. Particularly in developing countries, this often takes the form of post-harvest loss (PHL). The Food and Agriculture Organization (FAO) defines PHL as “a measurable quantitative and qualitative loss in a given product… [that] can occur during any of the various phases of the post-harvest system.” Consequently, PHL can have a massive negative impact on an agribusiness’s profits.
PHL often stems from issues in the operations and/or processing of an agribusiness. For example, farmers may not dry grains and cereals properly, or they may keep perishable produce in non-refrigerated containers. This leads to a damaged product that cannot be sold for the total market price, if it can be sold at all. And if the farmers themselves consume the harvest, they risk malnutrition or health issues.
External risks faced by agribusinesses
Climate can increase both pre – and post harvest (otherwise known as production) risks. There are various ways to mitigate production risks, including including crop diversification and insurance. However, many smaller agribusinesses, particularly those in emerging markets, are either unaware of these mitigation strategies or do not practice them. Therefore, these agribusinesses are at a higher risk of having their crops impacted by these external risks, which can impact negatively on yields and have a ripple effect on finances.
Consequences of PHL and external risks can be severe
Exact numbers on yields lost to PHL are challenging to calculate. However, researchers have estimated that, in the cereal sector in Sub-Saharan Africa, annual weight losses due to PHL have a value of approximately $4 billion. For comparison, the estimated overall annual cereal production value is $27.4 billion. If these estimates are correct, even a minor decrease in PHL could have a massive financial impact.
Similarly, exact numbers on the amount of an average yield lost to external risks are difficult to calculate. However, FAO estimates that 20-40% of global crop production is lost to pests and/or disease, and research suggests that the extremes of drought and excess moisture can cause anywhere from a 30 to 70% loss in productivity. Weather-related risks will only increase, with climate change-related temperature changes predicted to negatively impact important crops like maize and soybeans by anywhere from 3.1 to 7.4% per degree-Celsius increase. Mitigation strategies are thus critical to minimize this impact.
SCOPE assessments can increase efficiency
There are ways to lessen the impacts of both PHL and external risks. Some strategies to reduce PHL include increasing access to finance, which allows agribusinesses to buy the tools they need to properly process their harvests, training farmers, which teaches them the best ways to keep their harvests from spoiling, and collecting data on the phenomenon, which helps to tailor future interventions. When it comes to mitigating the impacts of external risks, one of the most important things is for agribusinesses to be aware of the risks and have contingency plans in place. This means that agribusinesses have a level of preparation they would not otherwise have.
SCOPEinsight’s assessments are designed to assess the professionalism of an agribusiness. The results can then help determine how best to increase the agribusiness’s professionalism. More mature and professional agribusinesses can better deal with problems that may arise in their work, such as PHL and external risks. Research has shown that organization immaturity is a common characteristic of less resilient agribusinesses. To help agribusinesses become more resilient, we must first help them to become more professional.
SCOPE assessments indirectly assess multiple components related to PHL, including operational strength and processing capacity. They have an entire dimension that assesses an agribusiness’s ability to withstand external risks. Capacity builders can then use SCOPE data to assess an agribusiness’s strengths and weaknesses and create a tailored plan. With targeted assistance, agribusinesses can receive training in reducing PHL and mitigating external risks. SCOPE assessments can also increase access to finance, which can help agribusinesses purchase tools they need to increase their efficiency. This will lead to improved yields, profits, and nutrition for many agribusinesses.
Are you interested in improving the efficiency of your agribusinesses? Contact us today to see how we can work together.Back to news