While close to 195 million Indian’s are severely undernourished, it is estimated that food losses and waste amount to a staggering 67 million tonnes every year. Although a recent figure of the exact amount of food wasted at the consumption level is not available, we often see consumers being called out to reduce wastage so that hungry mouths can be fed.

But to what extent is it true? Can food waste reduction by people substantially help to feed more people? Or will it make the existing scenario complicated

Indian Foodonomics

The nature of demand for food is inelastic which means that, irrespective of fluctuations in prices, the quantity demanded largely remains the same. This is because a human being on an average can consume only a fixed amount of food to satisfy his/her hunger. This paves the way for two options:

(Assuming that consumers are wasting ‘x%’ of food, ‘x’ is a variable)

Actuals: Consumers purchase only the exact amount of food that satisfies their hunger and consume it in full

Excess: Consumers purchase more than what they need for their consumption and toss away the left-overs in trash cans

Actuals: If the consumers purchase only the exact quantities of food, then the x% of food waste will lose its market. This means that the x% food which was purchased earlier by the consumer will now remain in the stores. There are two possible reactions to this phenomenon:

Market Shrink: The food market shrinks by this x% amount due to lack of demand. The farmers will therefore produce fewer quantities. While producing and consuming only the required quantities is good, this will seriously affect the livelihoods of the people who earlier made a piece of bread out of the income generated from this wasted food. For an economy to absorb the people who were dependent on a shrinking agriculture market the manufacturing and service sectors should have the demand for the workforce and the economy must have supply of skilled workforce. In February 2019 the unemployment in the country was 7.2%, the worst in twenty nine months. These figures suggest either a lack in the supply of skilled workforce or a lack in the demand for workforce due to economic slowdown. Therefore, for India it might not be the right time to walk down the path of a smaller market for agriculture.

In order to avert a market shrink, exporting this x% is a tremendous option but export market has its own requirements. It largely depends on demand for the same produce and export infrastructure facilities available in the country. Even if everything falls in place and if we are able to export, it doesn’t feed hungry mouths in India.

Over-Supply: The farmers might continue producing the same quantity of the produce despite a slump in demand. If this happens then the over-supply will either rot or be dumped off. To avert rotting or dumping off of the over-supply, the prices have to be brought down in order to let the new consumers who were not a part of the market due to unaffordability, enter the market. As differential pricing of the same good in an agricultural market is not a practical idea, the overall prices of the commodities come down. When overall prices come down, then the income generated for the same product is much lesser than that which was realised earlier. Even if differential pricing is possible and two different markets exist for the haves and have-nots, still this x% of the produce which was earlier sold to the haves at a higher price will fetch a lower price to the players in the food supply chain when sold at lower prices to the have-nots. Few more hungry mouths can be catered to but at lower incomes to the producers.

The Government of India has announced its mission to double the farmers’ incomes by 2022, so a reduction in incomes might not be desirable. In order to avert the problem of lower revenues due to over-supply, the government will have to purchase this x% food. The food thus purchased will have to be distributed to the needy at subsidised prices. This will maintain the overall demand, feed more mouths but will add to government expenditure; the greater the ‘x’ implies the higher the expenditure. As an alternative, some would suggest taxing people more to discourage them from purchasing more (the wastage of x %) and use the tax income to procure food for the poor (x %), this would be a good move by the government to maintain demand levels, feed more people when the benefits of tax income trickle down, and not allocate any extra budget to procure food. This decision comes at an increased burden of food expenditure on the consumers and their displeasure at the government for imposing this burden on them. Would the governments in developing countries risk the anger of middle-class families just for the sake of discouraging them from purchasing what they could earlier afford is a question that needs to be thought about. Also a feeling of increased expenditure might make consumers cut down their spending on other goods, thereby adversely affecting those sectors. Moreover determining a fixed quantity wasted per-capita over certain period of time at the level of consumption is almost impossible. This makes determining such tax rate highly difficult. This option doesn’t seem viable.

Excess: If the consumers as usual buy in excess or cook in excess, they toss away the left-overs in trash cans. This will not lead to a Market Shrink or Over Supply. The demand doesn’t go down as in the earlier case. The players in food supply chain will have better incomes. The government treasury will not take a hit and the consumer need not be burdened.

So, a reduction in the purchases by the consumers to reduce the food waste might only feed few more hungry mouths but at a great cost in terms of incomes of the producers or the government revenues. Though it might feed few more people, it might also force the same number of people dependent on food as a source of income into poverty.

Does that mean it is highly recommended of the consumers to waste food? In the short-run though it maintains demand level, in the long-run it is a terrible waste of resources. It is a waste of land, soil, water, fuels, labour, storage, and all that are required to make the food reach the plate. If the pressure on land, soil, water, fuels, labour, etc. is reduced then they could be put into better alternate uses or be saved for future use without exhausting now.  Over-use of resources could mean harm to everyone. So, wasting food is not suggested either. The most a consumer can do is either serve the left-overs to someone needy nearby or an organization has to collect and distribute the left-overs. Considering the time requirements from consumers for such activities and the reach limitations of the organizations it is not a worthwhile option to consider.

How to reduce food waste and reduce hunger?

Hunger is not more a consumer side or demand side problem but rather is a producer side or supply side problem. Lack of proper infra to reduce losses between the field and consumption and resource intensiveness could be the major problems. If the 60% of the food losses that occur between farm and consumption are reduced by ensuring better transport, storage, packing, etc. then overall prices come down because of an increased supply and more people can afford food. In order to make food affordable and farming profitable, also the resource costs need to reduce. Government must take active measures to reduce disguised unemployment to make the increased supply profitable and promote new techniques of farming to reduce excessive use of natural resources. Therefore, a person arguing that consumer food waste reduction could possibly solve the hunger problem might need to re-think.