Session 2-2: The Economics of Food Waste Reduction
From Aljosa Trmcic
Economics of Food Waste Reduction
Harry de Gorter, Cornell University
Global food waste can feed 1.9 billion people and result in significant GHGEs and stress on resources like water and land. Our conceptual and empirical framework measures purchases and sales for each intermediary, purchases and consumption for consumers, and gross production versus sales for farmers. Each stage in the value chain incurs a rate of waste defined over a cost function. Initiatives to reduce food waste influence behavior directly at each stage of the value chain and cause indirect effects cascading up and down the value chain, as all market participants are interconnected, ultimately affecting the equilibrium food waste (and carbon savings). Key parameters affecting the outcome include closed vs. open economy, supply and demand elasticities, farm share of consumer dollar and the distribution of waste rates vs. carbon emissions along the value chain.