Repairing food systems failures: Policies, Innovations & Partnerships

During the recent World Economic Forum (WEF) in Davos, strong interest in Food Systems approaches was confirmed by policy makers and business leaders. Ruerd Ruben from Wageningen Economic Research joined the panel debate on “Accelerating the End of Hunger and Malnutrition” along with contributions from the International Food Policy Research Institute (IFPRI),  Global Alliance for Improved Nutrition (GAIN), Global Nutrition Report (GNR), Scaling Up Nutrition (SUN), and World Business Council for Sustainable Development (WBCSD). The meeting was attended by both World Food Prize winners and several CEOs of international agro-food companies.

Taking stock of the outcomes of the recent WUR centennial conference “Towards Zero Hunger: Partnerships for Impact” the panel highlighted the urgency of reversing the current rising trends in hunger, malnutrition and overweight, and asked attention for research initiatives for co-innovation that focus on nutrition transition and food policies for healthier diets. New insights derived from Food Systems analysis from the joint WUR-IFPRI research program “Agriculture for Nutrition and Health” (A4NH) focus attention of supply chain business innovations and supportive food policies that create opportunities for catalyzing healthier food system in favor of vulnerable people.

The current food system is failing us

Current food systems are not capable to reduce hunger and malnutrition. In fact, hunger in the world has been increasing to nearly 821 million in 2017, from around 804 million in 2016. Also overweight is sharply rising and has tripled since 1975, affecting 1.9 billion adults and 340 million children; every year 3.4 million people die from obesity. Hunger and overweight are strongly related to each other: children that received insufficient infant and child nutrition are extremely vulnerable for overweight if exposed to energy-dense diets with high fat, sugar and salt content. While supplementation may offer some critical temporary solutions, the only structural solution to these problems of hunger and malnutrition is to improve the composition of diets.

The critical sense of urgency of food systems failures becomes visible in five related problems:

• insufficient supply of food from agricultural production (yield gaps) to feed to growing world population,
• inefficient delivery of foods from farmers to consumers due to inefficient agro-logistics and large losses and waste of food during transport, handling and storage,
• unequitable access to sufficiently healthy and diversified diets, due to highly segmented food markets,
• unaffordable opportunities for poor peoples’ consumption of healthier foods for poor people, since healthier foods are usually far more expensive than (ultra)processed foods,
• unsustainable food supply due to negative environmental impacts in terms of land and water use, biodiversity and energy intensity of greenhouse gas emissions.

Changes in income and rapid urbanization lead to three directions of change in dietary patterns. First, consumption of staple foods, usually based on cereals (such as rice, maize, wheat, sorghum, millet or teff) and starchy crops (roots and tubers, such as cassava, potato, etc.) is generally reduced as part of total food expenditures, even while total demand may still be increasing due to population growth. Second, many households show with increasing income also higher demands for nutrient-dense foods such as fruits and vegetables, pulses, and dairy, poultry and aquaculture products that tend to be more perishable but are relatively more expensive. To reduce the environmental burden of animal-based products a shift from animal to plant proteins (algae, seaweed, etc.) is advocated. Third, poor people are inclined to increase their consumption of energy-dense processed foods that are readily available from fast-food chains and retail outlets.

Deep food system reforms are required

To repair the food system failures and to prepare for the dietary transition, it is not sufficient to only ‘fix” the problem at the level of particular stages of the food supply chain (such as improving input use, optimizing farm production, integrating processing, transport and retail, or increasing household consumption and reducing waste disposal). While knowledge on technical solutions for how to close the yield gaps, how to reduce food losses, and how to improve the sustainability of production systems is widely available, their practical implementation is mainly hindered due to limited incentives or insufficient understanding of the drivers for food system change.

Fundamental elements for a more strategic food systems approach need to include attention for five mutually related FOCUS areas:

• Focussing on structural constraints for improving access and availability of foods, particularly opportunities for increasing supply chain efficiency and reducing the costs of healthier diets,
• Optimizing the institutional design of agri-food value chains, considering the perishable nature of many fresh foods and reducing the risks of quality degradation and food losses,
• Combining technological innovations with behavioural change, including effective incentives for ”nudging” consumers and producers towards safer and healthier foods,
• Upgrading the full array of public sector agents (agro-logistics; food safety) and private sector stakeholders (traders, processors, retailers) into joint programs of food-business innovation.
• Supporting dual interventions that strengthen both the food environment (supply side) as well as activities that influence consumer food choice and preferences (demand-side).

We need to develop a more integrated systems perspective where potential trade-offs and synergies between dimension of healthy, inclusive and sustainable diets can be effectively addressed. Food system reforms are characterized by changes in systems dynamics that are generated by incentives at other stages than where the problems become apparent. This implies that food systems interventions are based on deep understanding of the transactions and linkages between different stakeholders and the possibilities to influence their behaviour. Finding smart solutions outside the domain where the problem originally appeared will be particularly helpful to reach more structural and permanent impact.

Incentives for business co-innovation

Changes in food systems cannot be effectively reached without active involvement of relevant stakeholders at different stages. Since it is crucially important to create suitable incentives for co-innovation, food systems change requires simultaneous inter­ventions at different system levels. Such co-innovation initiatives for healthier diets can be particularly useful to support systematic changes in food systems dynamics that jointly benefit different stakeholders and also overcome structural dilemmas by identifying win-win solutions at aggregate systems level.

Many interventions that focus on reducing food losses in the agro-food supply chain and prospects for integration circular food systems usually meet severe constraints because most efforts have to be made by producers at the beginning of the supply chain while results are reaped at the end of the value chain mostly by retailers (longer shelf life). Experiments in Nigeria with local producers and traders that deliver tomatoes to Lagos city over a distance of almost 1000 km indicate their willingness to use improved plastic crates for packaging tomatoes, thus substantially reducing post-harvest losses. But this practice only became institutionalized once traders showed joint commitments to engage in a return system by bringing the empty crates back to the producers, and therefore engaged in long-term delivery contracts with local farmers while transferring part of the extra revenues to them as well. This institutional arrangement thus complemented the technical innovation that enabled the upgrading of the whole food system.

In a similar vein, experiments with improved school feeding (menus prepared with fresh vegetables and dairy) and healthier meals in hospital and factory canteens in Vietnam and Bangladesh that were originally designed to deliver on improved school results, better workplace attendance or shorter hospitalization stays, also can become particularly effective for generating spillovers to household eating practices and habits. The food system payoff of such focussed investments becomes visible once similar ingredients and food preparation modes are also applied at a regular base for preparing more healthier home meals.

Also changes in income composition and market engagement can be instrumental for improving family diets. Whereas most efforts for promoting dietary diversify are based on homestead production (vegetables gardens, family poultry and dairy), similar outcomes can also be reached by supporting households’ engagement in different input or output markets. Regular earnings from wage labour and from remittances lead to different patterns of income flows that are also used to purchase different types of food.  Moreover, buying food through home delivery systems offers opportunities to increase convenience and optimize portion size of fresh food. Improving consumption patterns can thus be supported by modifying labour use and market outlet choice.

Public policies for ending malnutrition

Many of the before-mentioned innovations need to be supported by public policies that shape a conducive environment for healthier and sustainable food systems. Individual food choices are – to a great extent – influenced by the complex and layered food environment, that includes multiple linkages with formal and informal traders, retailers and marketing agents as well as vertical cooperation and contractual systems between food supply chain stakeholders.

Key improvements in food policy that are critical for reducing hunger and malnutrition are:

• Substantial investments in agro-logistics to control the costs of transport and reduce the high losses in agro-food chain,
• Shifting the focus from agricultural (sector) policy to food policies, with greater attention for citizen-led demand side performance criteria,
• Focussing on policy coherence, paying attention to health and environment benefits from investments in improved food systems (as calculated by IFPRI:  1 US$ investment in better food may reduce health costs with 16 US$)
• Leapfrogging on technical progress in information and communication technologies (ICT) supporting home delivery and personalized nutrition apps for disadvantaged consumers,
• Upgrading the safety and quality of streetfoods, out-of-home consumption and processed foods to order to control the rapid growth of overweight.

New alliances between public policy and business practice offer partnerships that are vital building blocks for accelerating the joint challenge of reaching Zero Hunger (SDG2).

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Source: Wageningen University & Research, Economics blog

This blog is written by Ruerd Ruben, Professor of Impact Assessment for Food Systems, and based on the presentation made at World Economic Forum (WEF), Davos, January 24 2019 as a contribution to WEF Event ”Accelerating the End of Hunger and Malnutrition”