Exploring Market-driven Solutions to Post-harvest Loss

By Daniel Runde, Michael Levett, and Caitlin Allmaier

Produce sale at local market in Malawi. Photo courtesy of the International Food Policy Research Institute (IFPRI).

Produce sale at local market in Malawi. Photo courtesy of the International Food Policy Research Institute (IFPRI).

CSIS and the Rockefeller Foundation recently facilitated a multi-day dialogue at the Rockefeller Foundation’s Bellagio Center on Lake Como, Italy, which focused on the vital, unmatched role the private sector can and should play in creating and sustaining market-driven solutions to the wide-ranging problem of post-harvest loss, particularly in sub-Saharan Africa. The Convening’s participants clarified the role post-harvest loss (PHL) currently plays in the planning and decision-making processes of most of agriculture’s global and regional private sector: reducing food loss and spoilage is rarely if ever a specific focus of most companies participating in food product supply chains; rather, PHL is seen as an element or an outcome of strategies, practices, and initiatives adopted in pursuit of effective and sustainable supply chains.

Participants in the Bellagio Convening came from leading African, American, and European companies from across agriculture supply chains – representing input, processing, retail, and financial services sectors. The Convening brought together an array of unique experiences and at times divergent points of view to analyze how the Rockefeller Foundation can best support cohesive, market-driven solutions that significantly contribute to the lasting reduction of PHL across entire supply chains. The participants identified and discussed the drivers of market pull for quality goods, as well as (1) expanding supply chains to integrate smallholder farmers and small-scale entrepreneurs, (2) leveraging the capacity of financial institutions to reduce post-harvest loss in sub-Saharan Africa, and (3) motivating and supporting change by any and all of the actors, large or small, in agriculture supply chains.

Market-driven solutions for eliminating or significantly mitigating PHL were explored as the most effective ways to introduce and motivate lasting, large-scale change to smallholder farmers and other local entrepreneurs because, at least in part, changes catalyzed by opportunities to reduce costs, increase sales, and maximize profits will provide the drivers and the long-term support (e.g., demand/product purchasing, introduction of new technologies, access to affordable financing) for sustainable paradigm shifts. But it is essential to recognize that  market-driven solutions will require the involvement of not only global players and smallholder farmers, but also the timely, targeted support of governments, development donors (including philanthropy and corporate social responsibility programs), and the NGO community.

The need, largely unmet today, for a common set of metrics and language to conceptualize solutions to PHL was consistently expressed during the Bellagio gathering. “Post-harvest loss” is a term that is used consistently by governments, donors, and civil society, but is rarely encountered when talking with businesses and entrepreneurs, from smallholders and local suppliers to multi-national companies.  As one participant stated, we are not, in fact, dealing with a post-harvest loss problem – we are dealing with a market access problem, and it has severe post-harvest loss implications.

Whether driving new corporate efforts, sustaining business initiatives or establishing effective pre-competitive cooperation by global actors across sectors, business toolboxes that are comprised of consistent metrics and language are essential.  If businesses can’t measure what they are doing and what they get from doing it, either they won’t start doing it or they won’t continue doing it;   downsizing waste and mitigating the effects of post-harvest losses across supply chains cannot happen without identifying and using performance metrics.

Smallholder aggregation is both vital and inevitable once market access develops for specific groups of farmers and recognizing smallholders as business partners who want to grow as suppliers and entrepreneurs rather than corporate social responsibilities correctly frames the opportunity to create new business partnership models. Many and perhaps most smallholders do not wish to remain smallholders forever. Bellagio participants provided powerful examples of private sector actors – final-stage marketers as well as initial input suppliers – working to engage African small holders in efficient, profitable, sustainable agricultural supply chains. (It was also made clear that many small holders are not going to be part of large regional or global supply chains and it will be vital to share many of the lessons learned in and best practices of smart supply chains with the countless sub-Saharan farmers not so engaged.)

Given both high unemployment and the growing need for greater farmer access to knowledge, know-how and information, youth workforce engagement was identified as one of the main approaches for establishing sustainable networks of smallholders who are knowledgeable, efficient suppliers. One discussant highlighted his company’s unique initiatives to train recent college graduates in relevant, sometimes technical fields including supply chain management. He made clear that the large numbers of African youth who graduate from institutions of higher education every year often remain unemployed in no small part because they are unprepared for the realities of agriculture today – their academic-provided knowledge rarely includes the specific technical skills and operational know-how that are in demand by the food and commodity crop industries. But this African business leader sees these women and men as a largely untapped resources and he emphasized more than once the importance of devoting human and financial capital to cultivating potential workers. “It’s not always easy to identify unpolished diamonds,” he said, “but it is imperative.”

Market-driven solutions can transform post-harvest loss from an enormous problem for farmers, suppliers and consumers to a multi-beneficiary opportunity that would significantly increase the quantity and quality of food supplies at a time of growing demand and need, grow local economies and create new family and national wealth, and provide new and expanding sources of supply for buyers and end-users. But farmers with out-of-date technologies, inadequate access to finance, poor regulatory systems, and unequal or nonexistent land tenure also lack access to the guaranteed markets that can drive positive and lasting changes in operations, and a loan to buy expensive inputs for a market demand that never materializes can leave both the farmer and the loan institution in bad shape. While improved regulatory systems that support markets, facilitate trade, and ensure stable land ownership for smallholders can mitigate some of the risks often associated with lending to and investing in small-scale agricultural businesses, but without a comprehensive, multi-stakeholder approach, market-expanding opportunities will be wasted and losses – in produce, in food and income, and in nutrition and economic stability – will certainly not diminish.

Good intentions are clearly not enough, even when they are backed with political and/or financial resources.  As  one participant with extensive agriculture business experience across sub-Saharan Africa noted, an initiative that fails to recognize the flow of market pulls and “interferes with” rather than contributes to strengthening  market performance, may create unintended consequences of market interruption that has the potential to severely disrupt the positive role of various market actors, livelihood systems, and entire communities.

The prevention of losses and spoilage as part of a greater sustainability strategy resonated with most Bellagio participants and they stated personal and professional interest in determining what companies could do along supply chains to utilize market-driven, private sector-led solutions to post-harvest loss.  Facilitating market access for smallholders, and motivating farmers and other local suppliers with the information and tools they need to improve or aggregate and expand their participation in efficient supply chains, offers the most effective and long- lasting promise for reducing/eliminating food loss and spoilage and expanding food, income, and nutritional security for communities throughout sub-Saharan Africa. This Convening laid substantial and usable groundwork for framing potential future action by private companies as well as governments, development donors and philanthropies in the fight against PHL.

Daniel Runde is the William A. Schreyer in Global Analysis and the Director of the Project on Prosperity and Development at CSIS. Michael Levett is a Senior Associate with the Project on Prosperity and Development. Caitlin Allmaier is a Program Coordinator for the Project on U.S. Leadership in Development. 

2 thoughts on “Exploring Market-driven Solutions to Post-harvest Loss

  1. Sounds good. A lot of capacity potential for ideas and solution generation, a lot of potential partners across the globe. All sectors could benefit from refining and updating model. facilitation is a key concept that should be realized. Right now a lot of capacity is dormant, I suppose because the old templates and models lack intelligence or agility in real time. Carry on CSIS!

  2. That is good idea (market- driven solutions) and the involvement of many actors! This is especially important with the ever increasing unemployment and market oriented agriculture(especially producing crops) and of course achieving food security. In this regard awareness must be given to integrate both the production and the post-harvest management. Besides, governments and professionals must work a lot to formulate strategies to overcome the problems stated so far.

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