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Returns to Investment in Reducing Postharvest Food Losses and Increasing Agricultural Productivity Growth

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  • Rosegrant, Mark
  • Magalhaes, Eduardo
  • Valmonte-Santos, Rowena Andrea
  • Mason-D'Croz, Daniel

Abstract

In this paper, we assess the levels of infrastructure investment and rates for return on investments to reduce postharvest losses (PHL). Food security impacts and rates of return to reducing PHL are compared to rates of return to productivity-increasing research and development (R&D) investment. First we undertake of review of the literature on the magnitude of PHL. Next we undertake an econometric analysis of the impact of infrastructure investments on PHL using a panel data set. Third, we quantify the investments required for any given level of PHL reduction by combining marginal effect analysis based on the econometric estimation with data on unit costs for specific infrastructural variables. Fourth, we undertake a cost-benefit analysis of the required infrastructural investments to assess whether or not significant efforts in PHL reduction are economically feasible; and compare these to the rates of return to investments in R&D. These scenarios show that investment in infrastructure for PHL reduction contributes to lower food prices, higher food availability, and improved food security, and has positive economic rates of return. However, improvements in food security and marginal returns to investment in agricultural research are considerably higher for investment in agricultural research than for investment in PHL reduction. Reductions in PHL are not a low-cost alternative to productivity growth for achieving food security. Rather, reduction in PHL through improved infrastructure requires large public investments and is complementary to investments in long-term productivity growth to achieve food security.

Suggested Citation

  • Rosegrant, Mark & Magalhaes, Eduardo & Valmonte-Santos, Rowena Andrea & Mason-D'Croz, Daniel, 2016. "Returns to Investment in Reducing Postharvest Food Losses and Increasing Agricultural Productivity Growth," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235879, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea16:235879
    DOI: 10.22004/ag.econ.235879
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    References listed on IDEAS

    as
    1. Buzby, Jean C. & Hyman, Jeffrey, 2012. "Total and per capita value of food loss in the United States," Food Policy, Elsevier, vol. 37(5), pages 561-570.
    2. Robinson, Sherman & Mason-D’Croz, Daniel & Islam, Shahnila & Sulser, Timothy B. & Robertson, Richard D. & Zhu, Tingju & Gueneau, Arthur & Pitois, Gauthier & Rosegrant, Mark W., 2015. "The International Model for Policy Analysis of Agricultural Commodities and Trade (IMPACT): Model description for version 3," IFPRI discussion papers 1483, International Food Policy Research Institute (IFPRI).
    3. Jenny C. Aker & Isaac M. Mbiti, 2010. "Mobile Phones and Economic Development in Africa," Journal of Economic Perspectives, American Economic Association, vol. 24(3), pages 207-232, Summer.
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    Keywords

    Agricultural and Food Policy; Crop Production/Industries; Food Security and Poverty; Research and Development/Tech Change/Emerging Technologies;
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