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How can the financial sector contribute to Sustainable Agriculture?

Helvetia Durabilis* On the 29th of September, the UN is observing The International Day of Awareness of Food Loss and Waste. By Cecilia Serin

According to the Food and Agriculture Organization, globally, around 14% of food produced is lost between harvest and retail, while 17% percent of global food production is wasted. On the 29th of September, the UN is observing The International Day of Awareness of Food Loss and Waste and calls to action both the public and private sector to create more resilient food systems.

Food loss and waste undermine the sustainability of our food systems, negatively impacting food security and food availability, and contributing to increasing the cost of food. It has a direct impact on the SDGs, most notably SDG2: zero hunger and SDG13, climate action.

The FAO reckons that increasing the efficiency of our food systems and reducing food loss and waste, requires further investment in innovation, technologies and infrastructure.

This month, we have the pleasure of hearing from an expert on sustainable growth, development finance and agriculture, Dr. Jennifer Blanke, who has served as Chief Economist of the World Economic Forum as well as Vice President of the African Development Bank. She shared her thoughts on the role of the financial sector in reducing food loss and waste, particularly in developing countries. 

Dr. Jennifer Blanke has served as Chief Economist of the World Economic Forum as well as Vice President of the African Development Bank.

In your experience, what have you observed as the main cause(s) of food loss and waste in developing regions such as Africa?

Farmers produce enough to feed everyone in the world, but many people still don’t get enough to eat. In developing regions like Africa, a major problem is food loss, with about 20 percent of harvests spoiled—and much more leakage all along the value chain—so that great quantities of nutritious foods are never consumed. This largely happens because of underdeveloped facilities for handling and storage that can limit crop exposure to moisture, heat and pest infestation. Things we take for granted in Switzerland—such as good storage containers, grain silos, cold chain infrastructure to keep products cool—are simply not available or affordable for farmers. In addition, too little food is processed in Africa. Primary products tend to be exported abroad, and then Africans import an enormous amount of processed food. This is doubly negative since it not only reduces the shelf life of food produced in Africa—and therefore food loss—but also the good jobs and revenue that could be generated on this youthful continent. That is literally akin to exporting good jobs and revenue to richer regions like Europe. 

There are huge opportunities to invest in infrastructure and services that reduce food loss.
Dr. Jennifer Blanke

How could the financial sector contribute most efficiently to create a more sustainable agriculture? 

There are huge opportunities to invest in infrastructure and services that reduce food loss. At the point of harvest, investors can target the rollout of cost-effective solutions at scale. Some examples include hermetic bags, such as the PICs bags developed by Purdue University, metal silos, and natural treatments for crops that increase their shelf life. Perhaps more importantly, there is a major opportunity, given the lack of value addition and high food imports into Africa, to invest in processing activities. By some estimates the African food market will be worth 1 trillion USD by 2030. To harness this opportunity and create good jobs and revenue for Africans, the African Development Bank is supporting the development of Special Agro Industrial Processing Zones. These are set up near farm production. Governments commit to investing in underlying infrastructure like roads, water and electricity in order to attract the private investors that fund food processing businesses. The result is that Africans produce food locally and sustainably, reducing expensive imports, and generating better jobs and income. An investment opportunity to do well while doing good!

* A chronicle of the Building Bridges Community prepared with the support of Sustainable Finance Geneva and the AlphaMundi Group. Written this month by Nora von Wintersdorff, Fellow at AlphaMundi

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Cecilia Serin

AlphaMundi Public Relations Officer

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