The Economics of Waste

Wasting food may not be good for the environment and throwing away perfectly good food can raise a lot of concern among those who really care about the millions of people starving all across the world, but our economies have really become dependent on over-consumption and that is where much of the problem lies.

Food waste is a topic that generates a lot of discussion. Reports are published in newspapers all over the globe from universities, think-tanks and environmental researchers who regularly give us pretty damning statistics on what we throw away at all levels of the food chain including what goes into our very own garbage bins. They may spark a lot of heated discussion but do these reports actually change anything?

Only yesterday, Melbourne’s The Age newspaper plucked figures from the Australia Institute’s What a Waste research report from late last year that estimated food waste in Australia to be 3 million tonnes and worth $5.2 billion a year. The article also quoted recent estimates by IBIS World that of the $7.6 billion spent on food in Australia in December alone, 20 per cent of it – or roughly $1.52 billion worth – was wasted.

The What a Waste report went a lot further than assessing only food waste. It weighed the environmental and moral attitudes of those surveyed against the amount of food they actually trashed and found that those who had serious convictions about environment preservation and worldwide starvation were generally the ones who threw out most of it. The least waste, the report concluded, came from those who did not have enough money to over-spend. So it is actually the ones who can’t afford a lot who are living more environmentally sustainable lives rather than the more affluent, environmentally conscious ones.

This “conflict of interests” could possibly be excused because most of these modern day environmentalists are actually unaware of the hidden impacts of wasted food on the environment, but our whole new world seems to be a continual collision of interests. Our over-indulgent lifestyles may be keeping our own economy buoyant but they are hardly going to help address the global environmental crisis, but that is exactly the problem.

Economists regard retail spending as the best economic indicator and food accounts for the largest share of retail spending. That means that buying more than we need has become crucial for a good economy, despite the long term environmental challenges this culture is generating. As far as economic management is concerned, this surplus buying is good for governments too.

This report suggests, as many others have before it, reducing this waste to curb the climate crisis. Concluding that this would be a more cost effective solution for reducing our carbon footprint than the current proposed emissions trading scheme, the report omits a very important factor in the whole thing: less spending means less profits and can only slow down the economy rather than maintain or boost it.

We aren’t the only country that wastes enormous amounts of food either. Regularly reports are published from all around the globe with similar statistics. Only days ago Italy’s Corriere Della Sera newspaper reported that one billion euros worth of food was wasted there annually and this report only took into account the waste at large supermarket outlets.

Our wasteful culture isn’t restricted to food either. Our whole lifestyles in this modern day are in deep conflict with popular attitudes, particularly when it comes to the environment. We buy petrol guzzling cars and drive them everywhere; we drink water out of plastic bottles and discard them; we buy products that have been shipped all around the globe to get here; we update our mobile phones and our television screens before our last ones have even been broken in properly and cheap imported clothes some of which we will never get around to wearing fill up and even flow out of our wardrobes.

For many, this limitless indulgent lifestyle should be a major concern – that is, if current reported attitudes to the environment are real – but indications of any changes in our lifestyle choices have been minimal while concerns for the environment are deepening.

Of all the waste, it is food that generally seems to get the most attention. It can often trigger feelings of guilt or shame but not really enough to force us to kick our wasteful habits it seems. There is one thing we can however congratulate ourselves for. This surplus buying has probably saved a lot of jobs, for now anyway, and we can hardly argue that our economy isn’t any better for it. In the end, the demand whether real or over-indulged is what keeps the entire supply chain going.

Just look at what is happening to our local wine industry at the moment. Through many years of high international demand and exports of wine seemed were almost like a bottomless pit, sales have really hit a slump over the last year or two. Today’s Sydney Morning Herald quoted a recent industry report that estimated production of Australian wine to be 20 million to 40 million cases more than it was selling and a recent report revealed that the current crisis in the wine industry had forced retail prices of some wines to well below cost.

While industry spokespeople suggest that there should be far fewer players and a lot less vineyards in the overall market largely because the industry expanded so much during the really good years, there doesn’t appear to be anyone too keen to back out.

This too could happen to the food industry if demand started to slow down. It is all very well to tell us all to “only buy what you really need” but that culture would certainly have some detrimental effects on the whole food chain that has long been accustomed to an over-spending culture. These merchants just want us all to buy. Is waste really a concern for them? Well, I cannot really imagine any of them being all that interested in what we do with their products after we have actually bought them.

Sourced: www.smh.com.au; www.theage.com.au; www.corriere.it;

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