Economy-wide analysis of food waste reductions and related costs

Reducing food waste has become a policy priority in recent years as many studies show that a significant amount of food is wasted at various stages of the food supply chain. However, the economic impacts of food waste reduction have not been studied in depth as most of the studies in the literature ignore the cost and feedback effects. The aim of this report is to develop a general framework to analyse the economic impacts of reducing food waste in EU28 in both a global and a regional context in support of the EU policy making process on food waste reduction. For the purposes of this study, we employ the CGEBox toolbox which is a flexible, extendable, and modular code basis for CGE modelling. The default configuration of CGEBox used in this study covers the global economy with a detailed representation of the agriculture and food production sector whereas the EU28 is modelled at NUTS-II level. The impact of a food waste reduction equal to 5% of the intermediate input use of food processing sectors under two different cost assumptions is analysed in the scenarios. Firstly, in the cost neutral scenario, we assume that the cost of reducing food waste is equal to the monetary savings for the food processing industry. Secondly, in the pessimistic scenario, we assume that the cost of reducing food waste is twice as much as the cost savings made by reducing food waste. The results suggest that a unilateral commitment by the EU to reducing food loss and waste would most likely decrease the competitiveness of the EU’s food processing. Reduced demand for primary agricultural inputs would shrink the EU’s agricultural sectors, putting pressure on farm incomes and land prices. The contribution to global food security would be very minor. The impact on emissions relevant to climate change at global level is also minor, with a very limited contribution within the EU.