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To feed the future, let’s make logistics and transport sustainable

Jose Luis Irigoyen's picture
How serious are we about addressing the challenge of food security in the face of climate change?  This is one of the topics to be discussed at Food for the Future, one of the events at the IMF-World Bank Group Annual Meetings this year.

If we are dead serious about this challenge, then we really need to pay greater attention to the role of transportation and logistics, both crucial in increasing food security, so we can feed 9 billion people by 2050, and mitigating impact on climate change. Just consider these facts:

  • Up to 50% of harvest is wasted between farm and fork, the moment we actually consume food.
  • Transport-related emissions account for about 15% of overall greenhouse gas emissions. And 60% of those emissions are coming from road transport.
  • And logistics costs affect small farmers disproportionally (up to 23% of their total costs).
Thus logistics – the services, knowledge, and infrastructure that allow for the free movement of goods and people – is now recognized as a key element in achieving sustainable food security, and thus a driver of competitiveness and economic development. The development of agro-logistics, for example, has helped address the food security challenge more holistically: from “farm to fork” and all stages in between.

It’s a popular belief that much of the food losses occur during production, handling and storage. The Food and Agriculture Organization, however, has shown that much can also be wasted or lost during the consumption stage of the value chain. Without negating the importance of proper handling, storage and transport climate-control, recent studies indicate that thanks to modernized value chains and technology, much progress has been made in reducing the post-harvest losses from field to local storage. But for the small farmer to further benefit economically, it is also important to control the losses up the value chain.  

When looking at the value chain of staple foods, for instance, it appears that the more agents are involved between harvest and table, the less incentive there is for each agent to control costs and food losses. This often means that the farmer who is at the start of the chain loses out the most as he/she has little power to control what’s happening upstream.

Another impact of complex value chains is that it increases the risk for broken cold storage chains or food losses due to poor storage, handling and packaging (losses up to 37% of retail value). Furthermore, freight movement also impacts people’s quality of life in multiple ways, including: road safety, noise, air pollution, use of scarce space, and others. Cold Storage Facilities and Transport Refrigeration Units, for instance, consume lots of electricity (often diesel-based) and hence add to greenhouse gas emissions.

For many, these are important arguments for focusing more on locally-produced foods. However, it is not a given that the complexity of the chain increases with geographical distance. As maritime shipping costs are generally low, for example, farmers can often achieve decent yields when their crops are exported to foreign markets through this transport mode.  And bulk transport also tends to generate a lower-emission footprint.  It is therefore crucial to look at a case-by-case basis for the optimal balance between economic yields, total transportation costs, and overall greenhouse gas emissions.

The good news is that there are great opportunities to reduce food waste and minimize the environmental impact through the use of technology and other innovative solutions. For instance, solar-powered mobile refrigeration units may help address the cold-storage challenge in remote places, where access to energy is unreliable or too expensive, and the reliance on fossil fuels to generate needed electricity. Moreover, the World Bank is already working with client countries to implement integrated solutions that involve the whole agro-supply chain; from farm-to-fork.  In a study in Indonesia, for instance, we will look into how rural connectivity impacts post-harvest losses and which connectivity improvements offer the best sustainable path for the environment.

These integrated and holistic approaches to agro-supply chains are fundamental to maximizing efficiency in the movement of goods (for greater food security) while minimizing social and environmental impacts (like climate change).

Three pillars of Sustainable Logistics

In this context, one of the initiatives led by the World Bank is a Multi-Donor Trust Fund for Sustainable Logistics, established in September 2013 with the support of the government of the Netherlands. The fund finances specific activities or projects in developing countries, focusing on three main pillars:

First, the Green Supply Chains or Logistics pillar aims to enable developing countries to address climate-related and local environmental impacts caused by the transport of goods, and enhance the competitiveness of their exports through less carbon-intensive value chains.
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Second, the agro-logistics pillar aims to assist developing countries to strengthen food security and improve the competitiveness of agricultural exports through sustainable reduction in logistics costs as well as food losses.

And third, the urban freight and port cities pillar helps developing countries address urban congestion from the retail distribution of goods, and improve the sustainable design and operations of port-cities.

There is little doubt that efficient logistics are a precondition for regions, countries, cities, and businesses to participate in the global economy, boost growth, and improve livelihoods.  And on the nexus between food security and climate change, there also are great potential gains from the implementation of concrete solutions.  As a sample, just consider these:

  • 80% potential reduction of CO2 emissions when moving from small trucks to inland water, rail or pipeline
  • Solar-powered mobile Transport Refrigeration Units and Cold Storage Facilities
  • Dry-bulk storage solutions (packaging) geared for emerging economies
  • International renowned Post-Harvest-Loss Network 
Win-win for all

Policy making is turning its attention to sustainable growth paths, valuing scarce resources, minimizing environmental impacts, and allowing economies to prosper across generations. In this new integrated vision of development, sustainable logistics and transportation are fundamental for addressing food security and climate change. 

To improve sustainable logistics practices in the developing world, private sector technologies and innovation, as well as government policies and academic knowledge, need to be brought together for the benefit of both developing and developed countries.

It is clear that an effective and holistic value chain management is a win-win for all: it maximizes returns for farmers, minimizes waste of food products, and limits its impact on the environment.

Let us not waste time to reap the benefits of this triple win.

This blog is part of a series exploring what different sectors can do to feed the world in the face of climate change. For more, tune in to Food for the Future, a high-level panel discussion on Friday, October 10 at 12:30 E.T. and join the conversation on Facebook and Twitter using #food4future.

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