By 2050 we’ll need to feed 2 billion more people. This requires 70% more food than we have today, according to the World Resource Institute.
To accomplish this we’ll need to double our crop production. All the while agriculture is already among the greatest contributors to global warming. Increasing production and using existing resources more efficiently are among the pathways towards this gigantic challenge.
I was recently invited with a team of experts by the Rockefeller Foundation to explore a third pathway, namely ‘reducing food loss’. In rich countries today up to 50% of food is lost, most of the loss occurs in homes, restaurants and supermarkets. Therefore it was great to see our partner FOODLOOP taking on this challenge. FOODLOOP, sponsored by SAP SE, recently won the top prize and the People’s Choice Award at Sustainable Brands’14 in San Diego.
Their aim is to reduce the 90 million tons of edible food trashed every year in the EU by alerting consumers about discounts due to upcoming ‘best before’ dates. Try it out, you save money and you are doing good.
Picture 1: 40% of food is lost from farm to market
But our week-long trip to India had a different focus. In poor and emerging countries roughly 40% of food is lost between farmer and market, due to lacking market information systems, storage and transportation. Almost nothing is lost at consumption level.
Reducing this so-called ‘post-harvest’ food loss requires a combination of policy changes, hardware and software innovation. Our task was to visit rural India and explore similarities as well as differences to the situation in Africa. Rockefeller Foundation is planning to make a bigger investment in Africa in the foreseeable future to mitigate food loss.
We quickly discovered that one commonality is the lack of market information and learning mechanisms for farmers. For example, middlemen often collude to pretend there is no demand for products. Farmers (lacking storage facilities, up-to-date price information, credit and finance opportunities) are unable to negotiate for a fair price or delay their selling process.
Picture 2: Meeting with farmers in Chandigharh (India)
Representing SAP in this hand-selected team of experts, I was intrigued to see the importance of software solutions to overcome some of these obstacles.
The widespread introduction of mobile phones and progress in form of IT solutions for farmers like ITC’s e-Choupal kiosks, Reuters Market Light (RML) and Digital Green’s knowledge platform are starting to change agriculture practices, and farmers increasingly make use of it (e.g. RML solution has already 1.3 million subscribers).
Picture 3: Farmer receiving the latest market information in Hindi
SAP solutions already deployed in Ghana and Columbia are similar examples. Studies showed that our solution increased income of participating farmers and smallholders by between 59-82%. Clear proof how IT solutions can 'make the world run better'.
All solutions have one thing in common. Connecting farmers with food value chain entities while providing new levels of services. These services can come in form of capacity building, farmer training, traceability, information sharing and access to finance.
The problems that lead to food waste lies throughout the chain from production to distribution and consumption, which means countless opportunities for organizations across all sectors to innovate and tackle it.
The ‘digitization’ of the food value chain and linking small-scale farmer communities is essential. Not only to address food waste, but also as response to other macro-economic drivers like
- Rising demand for food
- Managing the scarcity of natural farm resources
- Developing farming practices
- Acting swiftly on food incidents.
Delivering a complete global food value chain service needs to be the goal, serving multiple constituencies along the way. From consumer all the way upstream to the smallholder farmer.
Globally, over 1 billion people are employed in world agriculture, yet the number of hungry people reaches the 1 billion mark as well.
What if governments, banks, foundations (like Rockefeller) and companies like SAP collaborate to support the millions of smallholders farmers? This support could include creating global policies for a level playing field, access to capital and markets, structured training (both agriculture and business development), and, as in the case of SAP, investment in technology to achieve longevity and sustainable growth.
SAP already believes Africa will be its fastest-growing market over the next couple of years. Technology and solutions for food value chains and the prevention of food loss need to be at the top of the agenda.
For more detailed information about my trip, please visit my guest blog at the Leaders Quest site.
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