Reducing of food waste has become a policy priority in recent years as many studies show that a significant amount of food is wasted in different stages of food supply chain. However, the economic impacts of food waste reduction are not well studied as most of the studies in the literature ignore the costs 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 both in a global and a regional context, to support 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 that is used in this study covers the global economy with a detailed representation of agriculture and food production sector whereas the EU28 is modelled at NUTS-II level.
We simulate food waste reduction in food processing sectors under two different cost assumptions. First, by assuming that the cost of reducing food waste is equal to the monetary savings for the food processing industry; and second, by assuming that the cost of reducing food waste is twice as much as the savings from food waste. The scenarios assume a food waste reduction that is equal to 5% of the intermediate input use of food processing sectors.
The results suggest that a unilateral commitment of the EU to reduce food loss and waste would most likely decrease the competitiveness of the EU food processing. Reduced demand for primary agricultural inputs would shrink the EU’s agricultural sectors, pressuring on farm incomes and land prices. The contribution to global food security would be very minor. The impact on emissions relevant for climate change at global level is also minor, with some very limited contribution inside the EU.