The $1 Trillion Mountain: The Actual Cost of Food Waste

Posted on August 29, 2016

Foodwastegraphic

Imagine receiving just 60% of your pay. Or when you send email, 40% are never delivered. We don’t tolerate 40% inefficiency in anything, yet we’ve come to accept it with the major resource that sustains the human race: our food.

One-third or more of food never makes it from the farm to our fork. The food is lost to waste or spoilage. At the same time nearly one billion people go to bed hungry every night.

The $1 Trillion Mountain

Setting societal and environmental issues aside for a moment, the direct economic cost of food waste is a $1 trillion mountain, and growing. That’s $1 trillion worth of food that required manpower, water and energy (with resulting greenhouse gas emissions) to plant, harvest, transport and sell.

Unfortunately, this massive amount of food never made it from the farm, spoiled in transport due to inefficient refrigeration systems, was deemed “ugly” and unsellable and therefore thrown away, or was discarded by people in homes around the world who didn’t use or want it after all.

The Hunger-Money Connection

When you go to the grocery store and buy food without having a plan for what to do with it, you may end up wasting money – a few dollars here and there quickly adds up. The financial impact of food waste, however, goes far beyond that.

Many studies have demonstrated that reducing hunger and undernutrition can actually raise a country’s gross domestic product (GDP). A report by the International Food Policy Research Institute showed that for every dollar a government invests in nutrition, it can see an average return of 16 times – and in some countries much higher.

ReFED’s (Rethinking Food Waste through Economics and Data) recent publication, A Roadmap to Reduce Food Waste, reports that the United States spends $218 billion a year, or 1.3% of GDP, to grow, process and transport food that is never eaten.

Simply put, if we can reduce food loss and waste and keep nutritious calories from leaking out of the food supply chain, we have the potential to improve the  economies of countries around the world.

That is a connection between hunger and money worth remembering.

Developed countries bear an enormous financial burden when their citizens suffer from food insecurity. A study published in 2011 concluded that hunger costs America $167.5 billion annually due to lost productivity, more expensive public education, avoidable health care costs, and the price of charity to provide food for families in need.

In our own homes, the average American family spends $1,410 each year on food it throws away. That’s money you could use for household bills, a vacation, tuition, or other expenses – money back in your pocket, just from reducing food waste. Focusing on food waste could yield economic results relatively quickly.

Factor in Conflict, GHGs and the Actual Cost Balloons to $2.6 Trillion

The $1 trillion mountain of food waste? It exists, but this number only includes direct food waste – the value of that food if it was sold at market. The actual full cost, according to the Food and Agricultural Organization (FAO) of the United Nations, is $2.6 trillion!

Further, a 2014 study by the FAO offers a smart, ambitious look at the environmental and social costs of our distressed food chain. It calculates, for the first time, the financial costs related to health, conflict, water shortage, greenhouse gas emissions and more. The study also describes the enormous opportunities available to fix the problem of food waste and improve human welfare.

Staggering as the cost of food waste may be, together we can discover new solutions to this global problem. Tweet me @JohnMandyck to tell me what you think!

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