The answer lies in supermarkets and their logistics chains
Bangladesh needs more supermarkets, that’s the lesson to take from the recent meeting of the Food and Agriculture Organization in Bangladesh. That’s not quite what they say, but it is the fair conclusion to draw from what they say. For as they point out, there are hungry people out there, we walk past them every day, and yet there’s a billion tons of food a year wasted globally. The solution to which is to have more supermarkets.
I am being ever so slightly unkind, for economists often apply different meanings to words. By “supermarket” here I do not mean a large shop with many items for sale. That’s just the end point of the technology which we can more broadly use the same word to describe, and it is that wider meaning I am using here.
I should also point out that “technology” here is also used in a wide sense. Any method of doing something, any manner of organizing a part of life, is a technology. Yes, sure, a computer is a technology but so is knowing how to grow rice. As is using electricity to cook it with, and, germane to the point here, how to get it from field to kitchen while wasting as little as possible.
As the FAO has been telling us -- OK, those few sad people like me who actually read their reports in detail -- for decades now there are two entirely different issues with food waste. In richer countries, people do buy more food than they consume. That excess ends up being thrown away. People are rich enough to be able to do this even as in other parts of the world food is in truly short supply.
In poorer countries, the issue is different. There -- here in the case of Bangladesh and South Asia more generally -- the waste happens between the field and the consumer. Food rots in that process between production and final sale, in the distribution system.
At which point come our definition of what a supermarket really is -- it’s an efficient logistics chain getting that food from the farm to the consumer. Using that as the description, we can now see why the solution is to have more of said supermarkets. We have divined an inefficient logistics system, the cure is to have an efficient one.
It’s always fun to point to the neighbours and laugh at them, and here India is our poster example of what not to do. The government there agrees that this waste of food in the distribution system is a problem. It also bans wholly foreign-owned companies from entering the retail system. That is, it bans the very people who know how to run the efficient system from coming in to do so, as Walmart found out. The argument used is that tens of millions of people make their livings from the current small-scale wholesalers and shops in the system.
Therefore, we cannot allow their livelihoods to be threatened. Yet, it is precisely and exactly because there are tens of millions of people with small, undercapitalized, businesses making up that food chain that it is inefficient. Any solution to the problem is going to involve much more capital, many more machines, and much less human labour. Exactly what the law insists may not be allowed to happen.
This is another example of how we already know how to make Bangladesh richer. The technologies, the methods, are already known, are already implemented in other places. This must be so, for there are those places richer than Bangladesh. Thus, part of the trick of increasing economic growth is to adopt those better methods.
Do note that it’s adopt though, not slavishly copy. Each place, society and country, is indeed different and a direct copy of what works in one place will not in another. To be entirely trivial about it, supermarkets in different countries put different things at the back, as far away as possible from the doors. For there are certain things which a culture regards as the vital foodstuff so a profit maximizing retailer makes us walk past all the other offerings to gain access to those essentials. In the US it is milk, in the Czech Republic bread, that’s just how those places roll. The point is rather larger than that though -- there will be more varieties of rice in a Bangladeshi supermarket than are even thought of in a country like Britain.
The base point here is that yes, certainly, we all face economic problems. The solutions to some of them are already known. The task of economic development, at least at this stage, is to identify those that can usefully be added to our own environment and adapt them to the local specifics.
In terms of food waste and its reduction, this means using the system that has solved the problem elsewhere -- supermarkets and their logistics chains.
Tim Worstall is a Senior Fellow at the Adam Smith Institute in London.