The term “productivity” in agriculture typically refers to the cost efficiency of crop yields per unit of land, or the ratio of outputs, or yields, to inputs. But with so much of the food produced being lost to spoilage or damage before it gets to consumers in developing economies, we need a new definition of productivity. We must focus on the whole system that moves food from the farm to the consumer. Scientific research, technological innovation and public investments are desperately needed to bridge the gaps where food is lost– food that could otherwise help us meet the goal of zero hunger by 2030. 

Advances in farming show us that this is a challenge we can meet. Thanks to the combined power of science and technology, we have made significant improvements in crop yields in modern history. For example, corn yields in the United States have increased nearly 600 percent from the first third of the 20th century to today.[1] In India, wheat yields increased by 470 percent during the period from 1947 to 2011.[2]

There are many other examples of these successes, and each is a testimony to global advancements in providing food, our most essential fuel, and feeding millions more people who otherwise might have gone hungry. But losing food before it gets to the consumer is like having a broken pipeline that’s supposed to deliver, say, natural gas or water: the commodity enters the system but never reaches the people who need it. 

Undoubtedly, we need to continue making advances in agricultural productivity – but we need to look at the productivity of the entire system, too. It needs to reach the consumer and be safe and viable when it gets there. According to the Food and Agriculture Organization of the United Nations (FAO), developing countries lose about the same amount of food pre-consumer that developed countries waste post-consumer – in both cases, this is about one-third of production. Preventing loss is a vital way to reduce hunger and malnutrition. 

In Sub-Saharan Africa, for example, about half of all fruits and vegetables – all high in important micronutrients for childhood development and overall health – are lost either in the field or during post-harvest processing, storage, and distribution. These loss figures are similar for other regions, including South and Southeast Asia, Latin America, North Africa, and Central Asia. [3]

The Feed the Future Project – which my company, Food Enterprise Solutions, implements in partnership with USAID – is focused on improving food safety, which is one of the most urgent challenges to reducing malnutrition and food-borne disease. Globally, the World Health Organization estimates that 600 million people suffer, and 420,000 die, from eating contaminated foods each year. Our FTF project, Business Drivers for Food Safety (BD4FS), diagnoses barriers and constraints to food safety in food enterprises and supply chains. We work with local businesses to create solutions that will incentivize and accelerate the adoption of higher standards of practice and investments in technologies that improve food safety and reduce pre-consumer losses. 

In addition to improving food handling and getting better-quality foods to the marketplace, this business-centered approach to food safety can also create other positive changes in the food system and even the overall economy in several ways:

1. Advocating for policy that enables greater productivity: micro, small, and medium-sized food enterprises (MSMfEs) are powerful stakeholders in any effort to streamline the public policies and regulations that impact their business. By bringing private sector voices to the policy dialogue, government officials and decision-makers can better understand how weak regulatory frameworks pose serious risks and costs to businesses, the potential this weakness creates for corruption and abuse, and the high burden of losing profits that could otherwise be re-invested to grow and strengthen the businesses that connect producers with consumers.
2. Driving demand for research and technological innovation: because post-harvest MSMfEs are at the forefront of buying, trading, transporting and processing food, they are a good “laboratory” for investigating pathways to better food handling and identifying solutions that fit into their business model. Co-creating food supply innovations with these businesses fosters relevant, demand-based solutions that are more likely to be adapted and brought to scale. 
3. Building market demand for better food choices: global demand for safer, more nutritious foods is not restricted to developed countries. In many areas of Africa, Latin America, and Asia, youth are particularly aware – helped by access to global information through cell-phones and the internet – that a healthy diet made from local foods is not only good for their well-being but also good for the economy. Local businesses who understand this demand are therefore in a good position to respond positively through innovating and distributing locally-sourced food products that meet this growing demand. 
4. Creating jobs and generating wealth: according to the World Bank, Small and Medium Enterprises (SMEs) represent 90 percent of businesses and 50 percent of all employment globally.[4] In emerging economies, formal SMEs contribute about 40 percent to GDP – a figure that would increase significantly with the inclusion of informal SMEs. With an estimated 600 million new jobs needed by 2030 to absorb the growing workforce, SME development is a high priority and a natural companion focus in the effort towards achieving zero hunger. 

Although their operating conditions vary greatly, food enterprises serve fundamentally the same purpose in the food system: connecting producers with markets and consumers. Key factors that influence their ability to perform this function in the economy will differ and may include the quality of infrastructure, variations across commodity groups and value chains, the capacities of policy-making institutions and regulatory enforcement agencies, consumer demand and food preferences. But the ability of a post-harvest business to handle food safely, reduce losses and make a profit are all common variables that impact outcomes for producers and consumers alike. Viable, robust food systems yield greater incomes for farmers and better food choices for consumers. 

This is why taking a business-centered approach to food safety and strengthening food systems is also so important to scaling our effort to achieve zero hunger. Businesses by their nature find a way to survive and make a profit. They will adopt new practices and new technologies if doing so gives them the opportunity to grow their enterprise and improve their bottom line. If regulatory frameworks are imposing undue costs on doing business, they will either circumvent regulations or demand changes. An open policy dialogue is the preferred mode, so pressure from business can improve the rule of law and public decision-making that in turn creates a better environment for economic governance, infrastructure improvements, and reduced risk of investment in expanding the food enterprise sector. 

These benefits will expand opportunities for businesses working in all sectors of the economy, not just food enterprises. Indeed, growing the food enterprise sector has multiple socioeconomic payoffs. Because SMEs are the main driver of employment and income generation in most economies, leveraging this factor with the need to reduce food loss and foodborne illness creates a double win. The competitive nature of businesses will incentivize innovations that can benefit consumers by introducing new products or reducing the cost of food. Because food production is primarily rurally-based, strengthening the role of post-harvest enterprises generates benefits to rural economies, with the added bonus of creating entrepreneurial opportunities for youth and women. Finally, increased demand for financial services provides incentives for financial and non-financial services institutions to expand their offerings to these communities. 

Feeding a growing population and eliminating hunger across the globe by 2030 requires the right set of policies and investment decisions within the public institutions that shape social and economic development. But I’m convinced that understanding the challenges and opportunities for micro, small, and medium-sized food enterprises serving local consumers – and investing in strategies that help this sector grow – will help us get there faster.