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Reducing food wastage will help in lowering green-house emissions
Thursday, 17 December, 2020, 08 : 00 AM [IST]
Sunoor Kaul
The issue of lowering the carbon footprint through the maximisation of renewable energy sources has stayed relevant in everyday parlance for a few decades now. Countries across the world are tackling climate change as per their own capacity, by adopting cleaner, leaner energy policies and sustainable practices. However, food surpluses and its wastage often don’t feature as a top priority in the fight against climate change, and this has been the case with several administrations the world over. Inefficient agricultural practices and its supply chain inadequacies hamper efforts of many in reducing the carbon footprint. Recognising the need to improve the situation can help reduce the greenhouse gas emissions, while directing us towards running sustainable supply chains.

There are several researches which indicate the above trend, including those instituted by the Food and Agricultural Organisation (FAO) of the United Nations. A 2011 assessment indicates how one third of food produced is going to waste, without reaching the end-user. It suggests that there is a gaping hole when it comes to agricultural processes, which are straining economies of their human, manufacturing, supply chain, and natural resources every year. It provides far lesser returns, which is disproportional to the effort put in by all stakeholders. It could be attributed to many reasons, some of which are unreliable infrastructure, production losses, and distribution challenges.

India’s current challenge in dealing with agri supply chains
The challenge now lies in making the relevant authorities and stakeholders realise how resolving the agricultural carbon footprint issue can mitigate the increase in overall emissions, and the average resources spent. India being an agriculture dependent country, currently employs almost 58 per cent of the population in the sector, across several segments such as distribution, harvesting, processing, storage etc. As a developing economy, we have a long way to go in terms of improving the current infrastructure, which has often been a precursor to losses during harvests, storage, and distribution of food grain. It is essential to analyse the factors that are a hindrance to sustainable farming, and implement changes that can improve the agricultural supply chains with reduced greenhouse gas emissions.

A significant chunk of India’s population remains underfed to this day, and it isn’t just for the lack of food grain, prices set, or affordability. Environmental damage aside, distribution losses that occur due to weak value chains can affect the quality of food grain in the long term, due to lack of efficient warehousing practices. Moreover, situations often arise where keeping track of simple functions like storage and supplies becomes a challenge. Adding to this, FAO’s statistics indicate that food grains account as the biggest contributors to an unchecked carbon footprint, with 15 per cent of emissions arising out of food losses in the agricultural supply chains. The harm is done to the environment in more ways than one, as it leads to unpredictable weather conditions, degeneration of soil health, and productivity loss in the ecosystem.

How do we then fix it? Are there any immediate remedies?
How do developing economies go about spending their resources tactfully, meet people’s interests, while addressing the larger questions on climate impact? There could be several remedies to this but if we are to go by recent developments, building a robust system for agri commodities to enter the capital markets, opening it up for investments from institutional investors is a workable solution.

For a sector that struggles with lack of liquidity and over-dependence on governmental support, generating wealth from new sources such as the commodities market could turn the tables. It could ensure better practices, application of digital technologies to check pilferages, and ensure streamlined financial management. Furthermore, a centralised approach could be beneficial, where major regional nodes can be established for intelligent warehousing. Instead of the individual warehouses of warehouse owners that manage produce in silos, lack coordination, an organized network of standardised warehouses could ensure best practices, while reducing losses.

On the bright side, agri-tech and agri commodities firms have been able to devise strategies to reduce the carbon footprint, and they are piloting solutions as we speak. Be it through the use of technology that integrates all stakeholders onto a single digital platform, reduction of intermediaries, or building a dependable network of warehouses with practices that match up to global standards, several disruptions are taking place in the system. Taking cognisance of the post-Covid scenario, the government has also granted subsidies in the form of agri infra fund, to help the sector recover from the aftereffects of the pandemic. There are several options to pursue, however, some have resulted in the beginning of a new system.

Results of the agri emissions control initiatives
One of the means adopted by emerging players is by strengthening the agricultural value chain by eliminating the unnecessary presence of intermediaries. They often led to confusion, affecting the price realization for harvesters. Additionally, the produce was handled by multiple entities, thus leading to loss of grain and deterioration of grain quality. Strong value chains devoid of intermediaries help suppliers and buyers stay connected better, while shortening the time taken in processing and distribution.

In fact, agri firms are now taking up state-of-the-art logistics management solutions, which are ensuring farm-gate procurement, PTC (Pass Through Certificates) methods for investors, to name a few. Through the PTC mechanism, investors are able to trade commodities without having to physically observe their supply, creating a convenience in the marketplace for seamless segregation, packaging, transport and the other supply chain practices.

Moreover, science-backed warehousing and storage practices too have shown expected results, significantly minimizing the average 10 per cent losses borne by warehouses that don’t adopt scientific methods. Consequently, it has also allowed hoarders to maintain the quality of the post-harvest produce by guarding it from moisture, fungus, pollution, and other problems. These steps are indeed leading to a reduction of the carbon footprint, and subsequent innovations in the field could impact the emissions even further.

Looking into the future
By adopting some of these simple yet necessary techniques, the sector not only generates the much needed liquidity but also takes local and rural agri ecosystems into consideration. It helps private entities entering the agri sector to design methodologies that are local yet standardized, digital yet utilitarian in nature. In the advent of AI, Machine Learning, and Blockchain-led technologies, new platforms are ensuring fool-proof data practices and commodities management by closing the loopholes, which was the main cause of environmental degradation.

(The author is the Co-Founder and Director of Origo Commodities)
 
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