Investing in food system resilience

A circular economy recovery to the Covid-19 pandemic

While the Covid-19 pandemic has devastated many industries, it’s impact on the food sector has been varied. On the one hand, there has been a global increase in spending on groceries, as the popularity of cooking from scratch has grown, and many have turned to local retailers and producers. However, on the other hand, farmers and other food providers have been challenged with oversupply issues as lockdowns and border closures have caused shortages of seasonal agricultural workers in some regions, and impeded the transfer of goods between other regions. Farmers typically supplying restaurants and cafes have suffered cancelled orders, and many have struggled to adjust their offering to fit alternative markets.

In the face of its successes and challenges, the food industry has been tasked to become more flexible and resilient to meet changing needs.

As economic stimulus is unveiled for a post-Covid-19 economic recovery, how that stimulus is channeled into the food system will impact food security and business survival long-term. Investing in a circular economy for food provides two key opportunities to this end by:

1. Providing tools to enable farmers to shift to regenerative agricultural production models

2. Increasing food and by-product collection, redistribution, and valorisation infrastructure

Enabling farmers to shift to regenerative agriculture

Investing in a faster and broader shift towards regenerative agriculture could offer opportunities to create a healthier and more resilient food system that benefits natural systems and people alike. The World Economic Forum indicates that by 2030, 191 million jobs and USD 3.56 trillion in economic opportunities could be created by reforming food, land, and ocean use by, among other things, making greater use of regenerative agricultural practices.

In a regenerative system, input costs can be reduced as the organic matter in soil is enriched and mutually beneficial relationships between different crop and animal species are created, reducing reliance on synthetic pesticides and fertilisers.

Spending USD 78–116 billion on accelerating the adoption of regenerative production – promoting practices such as planting diverse cover crops, no tillage, and multiple crop rotations – could yield USD 2.3–3.5 trillion in lifetime operational cost savings.

Diversifying the types of food grown can also lead to diversification of farmer income, subsequently improving both crop-resilience and the resilience of producers’ livelihoods in the face of external shocks, such as those created by climate change.

A regenerative food production system can also provide significant environmental benefits, improving rather than degrading the environment on which food production relies. Farmland LP found that USD 85 million of farmland – which under conventional farming would have generated USD 8.5 million worth of ecosystem damage – was able to generate USD 12.9 million of value in ecosystem services after being regeneratively farmed. Combined with the adoption of practices such as no-tillage, the reduced use of synthetic fertilisers and pesticides manufactured using fossil fuels, also means that switching to regenerative production could—conservatively estimating—reduce total agricultural greenhouse gases by a minimum of 17% annually. As food production and agriculture are currently responsible for over one fifth of all GHG emissions, improvements in this area can have significant global impacts.

Increasing the availability of specific equipment and non-synthetic inputs—such as biofertilisers, vertical tillage tools that preserve soil structure, and ‘finger weeders’ that can remove unwanted flora without toxins—will support farmers in making the transition. Emerging digital and technological capabilities are also giving way to new tools that provide valuable insight into soil quality, and crop and animal welfare.

Investments in food collection, redistribution, and valorisation infrastructure

Each year around the world 1.6 billion tonnes of food is wasted, amounting to USD 1 trillion in economic costs. This lost organic matter consists of edible surplus food and inedible by-products, both of which could be transformed from costly burdens into attractive economic opportunities through enhanced collection, redistribution, and valorisation efforts.

In fact, food waste reduction has been found to present an annual economic opportunity worth USD 155–405 billion by 2030.

Edible surplus food could be redistributed through food banks, to help improve food security and fight hunger, or processed to create new food products and revenue streams as is done by Renewal Mill, a flour-producing venture using the by-products of tofu and soy milk production as inputs. Inedible food by-products, in turn, could be valorised to create inputs for agriculture as well as new materials and bioenergy, depending on the mixture of by-products present in the stream and technologies available for processing. For example, Ananas Anam produces a leather-like material called Piñatex from pineapple leaves that would otherwise be discarded.

This infrastructure could also play a critical role in unlocking a variety of environmental benefits for the food system. Currently, every year one-third of all food produced globally is wasted. However, if circular solutions were employed to redistribute edible food surplus, while increasing the valorisation of unavoidable by-products and green waste through composting, 1.7 billion tonnes of CO₂ emissions could be avoided annually.

Reaping these benefits will require investments in both physical and digital infrastructure.

In low-income countries where most food loss occurs directly after harvesting, investments in increasing the availability of food processing infrastructure that extends the shelf life of food, such as freeze-drying, could be most effective.

Meanwhile, in high-income countries, where most food waste is generated at the post-consumer stage and consists of edible food, digital solutions to redistribute this surplus should be developed. For example, the FareShare FoodCloud platform connects large retailers to supply surplus food to local charities.

The policy environment is increasingly supportive of investments in food circulation and valorisation. Japan introduced the Food Waste Recycling Law in 2001 that improved the recycling rates of food-related businesses. Meanwhile, the EU’s Farm to Fork Strategy of 2020 set out to create legally binding targets on food waste reduction for each member state. With more innovations for food waste revalorisation popping up, and a growing concern over the issues surrounding food waste, it is likely policies around this matter will also become more commonplace.