The Methodology of APEC Food Losses Assessment Emily Ching-Cheng CHANG Research 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 1

Outline Backgrounds Connection between FS and Food lose/waste Current Status – By products/supply chain/level of development Methodology for APEC Preliminary Results 2

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 3

Recent Trend of Food Price Index As food prices continued to rise, the stakes got higher So has the opportunity cost of post-harvest losses Source: FAO, World Food Situation: FAO Food Price Index 4

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% 5

PHL by region (kg/ per person per year) Food Losses – Europe and N America ( kg) – Industrialized Asia (160 kg) – Southeast Asia ( kg) Food Wastage – Europe and N America ( kg) – Industrialized Asia (80 kg) – Southeast Asia (5-10 kg) 6

SOURCE: Opara, L. “Novel Postharvest Technologies for Food Security and Safety.” 20Postharvest%20Technologies%20for%20Food%20Security%20and%20Safety.pdf 20Postharvest%20Technologies%20for%20Food%20Security%20and%20Safety.pdf Connection between PHL and Food Security/Safety “7

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 8

Extent of Food Losses and Waste – By stages of supply chain – By member economies – By products 9

By Product & Stage Source: Gustavsson et al.(2011), Global Food Losses and Food Waste: Extent Causes and Prevention, FAO, Rome. 10

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 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 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 11

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

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 low 2.loss figures may be deliberately over- or understated in order to gain benefits or to avoid embarrassment 13

Mass Flow Model (MFM) Source: Linpinski et al.(2013) Creating a Sustainable Food Future, Installment Two: Reducing Food Loss and Waste Creating a Sustainable Food Future, Installment Two: Reducing Food Loss and Waste 14

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)

LW1=A* ( ❶ / (1+ ❶ ))LW2=A* ❷ LW3=(L+H)* ❸ LW4=K* ❹ Lw5= (L+H-LW3)* ❺ LW6=(K-LW4)* ❻ LW7=(L+H-LW3-LW5)* ❼ Losses & Waste along Supply Chain Production Handling & Storage Processing & Packaging Distribution & Market Consumption IDBalance Sheet itemIDLoss Ratios AProduction❶ HProcessing❷Handling & Storage KFood (Fresh)❸Processing and Packaging LFood (Processed)❹Distribution (Fresh) ❺Distribution (Processed) ❻Consumption (Fresh) ❼Consumption (Processed0 Formulae for Food Losses and Waste Calculation

Loss Ratios along the Food Supply Chain North America & Oceania., Russia. CerealsRoots & TubersOilseeds & PulsesFruit & VegetablesMeatFish & SeafoodMilk Production2%20%12%20%3.50%12%3.50% Handling and storage 2%10%0%4%1.00%0.50% Processing and packaging0.5%,10%15%5%2%5%6%1.20% Distribution Retail Market2%7%1%12%4%9%0.50% Consumption27%30%4%28%11%33%15% Industrialized Asia Production2%20%6%10%2.90%15.00%3.50% Handling and storage 10%7%3%8%0.60%2.00%1% Processing and packaging0.5%,10%15%5%2%5%6%1.20% Distribution Retail Market2%9%1%8%6%11%0.50% Consumption20%10%4%15%8% 5% South & Southeast Asia Production6% 7%15%5.10%8.20%3.50% Handling and storage 7%19%12%9%0.30%6% Processing and packaging3.50%10%8%25%5%9%2% Distribution Retail Market2%11%2%10%7%15%10% Consumption3% 1%7%4%2%1% 18 Source: Gustavsson et al.(2011), Global Food Losses and Food Waste: Extent Causes and Prevention, ANNEX 4, FAO, Rome.

Preliminary Results 19

Preliminary Results Losses & Waste (mill ton) Production (mill ton) Utilization (mill ton) Loss % in Production Loss % in Utilization Wheat %14.8% Maize %8.5% Rice %16.4% 20

Preliminary Results-1 21 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) 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)

Preliminary Results-2 22 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) 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)

Preliminary Results-3 23 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) 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

Preliminary Results- Wheat 24

Preliminary Results- Maize 25

Preliminary Results- Rice 26

APEC Information Platform on Post Harvest Loss and Waste System (PHLOWS) Purpose Support C food security policy formulation Identify opportunities to improve value chains Monitor 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 27

28 APIP-PHLOWS Webpage

Cover Page Click 29

30 Thank you & Comment Welcome