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The Methodology of

APEC Food Losses Assessment

Emily Ching-Cheng CHANGResearch Fellow

Institute of Economics, Academia Sinica

APEC Seminar on“Strengthening Public-Private Partnership to Reduce Food Losses in the Supply

Chain”5-8 August, 2013, Taipei

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Outline

• Backgrounds• Connection between FS and Food lose/waste• Current Status

– By products/supply chain/level of development• Methodology for APEC• Preliminary Results

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Background

PHL reduction matters because its absence will–Reduce availability of food–Reduce quality, safety, nutritional values–Raise costs of production and distribution –Lower sectoral value-added

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Recent Trend of Food Price Index

As food prices continued to rise, the stakes got higherSo has the opportunity cost of post-harvest losses

Source: FAO, World Food Situation: FAO Food Price Index

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High incidence of PHL toward food insecurity

Globally speaking, food losses and waste:

– 1.3 billion ton/yr – Over 1/3 – 1/2 of production – Over USD 450 billion/yr – By 2020, estimated to increase by 40%

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PHL by region(kg/ per person per year)

• Food Losses– Europe and N America (180-190

kg) – Industrialized Asia (160 kg)– Southeast Asia (110-160 kg)

• Food Wastage– Europe and N America (80-100

kg) – Industrialized Asia (80 kg)– Southeast Asia (5-10 kg)

SOURCE: Opara, L. “Novel Postharvest Technologies for Food Security and Safety.” http://www.globalsciencecollaboration.org/public/site/PDFS/food/Opara%20L.%20Novel%20Postharvest%20Technologies%20for%20Food%20Security%20and%20Safety.pdf

Connection between PHL and Food Security/Safety

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Research Needed

• Quantify extent and economic cost of PHL in APEC region

• Calculate how much reduction of PHL would be required to end hunger in APEC region

• Determine whether reducing PHL would enable food security in APEC region

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Extent of Food Losses and Waste

–By stages of supply chain– By member economies– By products

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By Product & Stage

Source: Gustavsson et al .(2011), Global Food Losses and Food Waste: Extent Causes and Prevention, FAO, Rome.

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Methodology • Commodity System

Analysis (CSA)– CSA is widely use on

postharvest handling and marketing of a given commodity.

– CSA is made up of27 components that together account for all the steps associated with the production

• Mass Flow Model (MFM)– MFM is developed by the

Swedish Institute for Food and Biotechnology (SIK)

– Using available food balance sheet data

– Aimed to human consumption

– Quantify physical mass throughout the supply chain using SIK own assumptions

Commodity System Analysis (CSA)

• 26 components• Each component is

potentially important• But not always relevant for

all commodities• Permits analysis of a whole

commodity systems• Requires a multidisciplinary

team• Data collection is costly

Source: La Gra et al.1990

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Problem of CSA

• Losses for developing country records do not exist• Do not cover a long enough period of time• Assessment are only estimated by several observers• Records may not truly represent a continuing

situation, for example :1. losses may have been calculated only when unusually

high or low2. loss figures may be deliberately over- or understated in

order to gain benefits or to avoid embarrassment

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Mass Flow Model (MFM)

Source: Linpinski et al .(2013) Creating a Sustainable Food Future, Installment Two: Reducing Food Loss and Waste

FAO Food Balance Sheet Mass Flow

Allocation Ratio

- To determines the part of food that is allocated for human consumption.

Food(K)

Food (Fresh)(L)

Food (Processed)(M)

Allocation Ratio

(1-Allocation Ratio)

Allocation factorswheat maize rice

Europe 35% 35% 35%

North America & Oceania. 50% 50% 50%

Industrialized Asia 60% 60% 60%

Sub-Saharan Africa 75% 75% 75%

North Africa, West & Central Asia. 60% 60% 60% South & Southeast Asia 67% 67% 67%Latin America 40% 40% 40%

LW1=A* (❶/ (1+❶)) LW2=A*❷ LW3=(L+H)*❸ LW4=K*❹

Lw5= (L+H-LW3)*❺LW6=(K-LW4)*❻LW7=(L+H-LW3-LW5)*❼

Losses & Waste along Supply Chain

Production Handling& Storage

Processing& Packaging

Distribution& Market Consumption

ID Balance Sheet item ID Loss Ratios

A Production ❶ Production

H Processing ❷ Handling & Storage

K Food (Fresh) ❸ Processing and Packaging

L Food (Processed) ❹ Distribution (Fresh)

❺ Distribution (Processed)

❻ Consumption (Fresh)

❼ Consumption (Processed0

Formulae for Food Losses and Waste Calculation

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Loss Ratios along the Food Supply Chain

North America & Oceania., Russia.Cereals Roots & Tubers Oilseeds & Pulses Fruit & Vegetables Meat Fish & Seafood Milk

Production 2% 20% 12% 20% 3.50% 12% 3.50%Handling and storage 2% 10% 0% 4% 1.00% 0.50% 0.50%Processing and packaging 0.5%,10% 15% 5% 2% 5% 6% 1.20%Distribution Retail Market 2% 7% 1% 12% 4% 9% 0.50%Consumption 27% 30% 4% 28% 11% 33% 15%

Industrialized AsiaProduction 2% 20% 6% 10% 2.90% 15.00% 3.50%Handling and storage 10% 7% 3% 8% 0.60% 2.00% 1%Processing and packaging 0.5%,10% 15% 5% 2% 5% 6% 1.20%Distribution Retail Market 2% 9% 1% 8% 6% 11% 0.50%Consumption 20% 10% 4% 15% 8% 8% 5%

South & Southeast AsiaProduction 6% 6% 7% 15% 5.10% 8.20% 3.50%Handling and storage 7% 19% 12% 9% 0.30% 6% 6%Processing and packaging 3.50% 10% 8% 25% 5% 9% 2%Distribution Retail Market 2% 11% 2% 10% 7% 15% 10%Consumption 3% 3% 1% 7% 4% 2% 1%

Source: Gustavsson et al .(2011), Global Food Losses and Food Waste: Extent Causes and Prevention, ANNEX 4, FAO, Rome.

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Preliminary Results

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Preliminary Results

Losses & Waste

(mill ton)

Production

(mill ton)

Utilization

(mill ton)

Loss % in

Production

Loss % in

UtilizationWheat 34.9 292.3 236.2 11.9% 14.8%Maize 46.8 567.7 548.0 8.3% 8.5%Rice 39.8 256.6 242.4 15.5% 16.4%

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Preliminary Results-1

Per capita loss by weight (Kg)• Wheat: 1~43 kg (15 kg avg per year) • Maize: 1~66 kg (11 kg avg per year)• Rice: 1~38 Kg (13 kg avg per year)

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Preliminary Results-2

Convert into per capita calorie losses (Kcal) using FAO Food Balance Sheet• Wheat: 4~367 (112 kcal avg per

year) • Maize: 4~489 (80 kcal avg per year)• Rice: 8~381 (131 kcal avg per year)

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Preliminary Results-3

Convert into per capita monetary losses (USD) using FAO producer prices*1.5• Wheat: 2~15 (6 USD avg per year) • Maize: 1~14 (3 USD avg per year)• Rice: 1~50 (l0 USD avg per year)

13 billion 14 billion

24 billion

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Preliminary Results-Wheat

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Preliminary Results-Maize

Australia

Canad

aChile

P Rep of C

hina

Indonesia

Japan

Rep of K

orea

Malaysi

a

Mexico

New Ze

aland

Peru

Philippines

Russia

Chinese Ta

ipei

Thaila

nd

United St

ates

Viet Nam

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

Loss Ratio along FSC (Dom Utilization)- Maize

ConsumptionDistributionProcessing & PackingHandling & StorageProduction

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Preliminary Results- Rice

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APEC Information Platform onPost Harvest Loss and Waste System (PHLOWS)

PurposeSupport C food security policy formulationIdentify opportunities to improve value chainsMonitor and evaluate loss reduction activities

Input Data(Food

Balance Sheet)

Calculator(Loss/

Allocation/

Conversion Ratio)

Output (Losses)

by weight, calorie, $$$

(Table, Graph, Map)

Examined by Member Economy

APIP Website

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APIP-PHLOWS Webpage

https://sites.google.com/site/apecharvestlost/

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Cover Page

Click

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Thank you &Comment Welcome