Can increasing energy access in agricultural communities in poor countries prevent 40% of the post-harvest production food loss?
The impact analyses on providing energy access to agrarian communities in poor countries have frequently been tied to access to lighting, media, safety, education, and enabling of mobile devices. There is yet to be much concrete analyses on the impacts of energy access on post-harvest food productivity, either because interventionists fail to see that there is a direct relationship between energy access and post-harvest productivity, or that there are no interventions to date that are actively designed to increase post-harvest productivity by making energy accessible to the agrarian poor. In poor countries, post-harvest productivity is significantly reduced by post-harvest and processing food loss.
What is food loss?
FAO (the Food and Agriculture Organization of the United Nations) has identified that improved energy access can value-add to the economic activity of agricultural communities[i]. No literature has explicitly mentioned that better energy access can increase post-harvest output through loss prevention and mitigation. Food losses can be both quantitative and qualitative. 95% of the research investments during the past three decades focused on increasing productivity while only 5% was directed towards reducing food losses. Quantitative food loss is physical food loss such as spoilage and wastage, which ultimately, does not end up being consumed by people; whilst qualitative food loss can be a combination of a reduction in nutritional value, economic value, food safety and/or consumers’ appreciation, but still being consumed by people.
What are the differences in food loss behaviour across post-harvest value chain systems around the world?
In developing countries especially the poorer ones, 40% of the food loss occurs at post-harvest and processing levels. This stands in stark contrast with industrialised countries where more than 40% of the losses happen at retail and consumer levels[ii]. Using electricity access as a proxy to energy assess, Sub-Saharan Africa happens to be the region with the largest population without electricity access[iii]. It is unlikely that improved post-harvest and processing output leads to improved energy access. From above examples, it is more likely that poor energy or electricity access leads to higher post-harvest and processing losses in poor countries.
So then, what is the rate of electrification in these poor countries?
Sub-Saharan Africa is the world’s worst region for of electricity access. It has 13% of the world’s population, but almost half of the global population without access to electricity reside in sub-Saharan Africa. This is closely followed by South Asia with 23% of the world’s population, whereby a third of the global population without access to electricity reside in South Asia. Only seven sub-Saharan African countries, i.e. Cameroon, Côte d’Ivoire, Gabon, Ghana, Namibia, Senegal, and South Africa have electricity access rates exceeding 50%. The rest of the region has an average grid access rate of just 20%[iv]. This leads to an overall electricity consumption per capita that is lowest in the world at approximately 500kWh, which is about one fourth that of Latin America, one sixth that of China, one twelfth that of the European Union, and one twenty-seventh that of United States.
Why do poor energy access leads to higher port-harvest and processing losses?
We concur with John Keane, of CEO of SolarAid, that we cannot fight poverty without electricity. (“Edited on the 17th of July 2019, after reading an article from The Beam”) We like to further elaborate on that by arguing electricity’s role in agrarian activities. There are arguments that support why poor energy accessibility leads to higher post-harvest and processing losses. Postharvest food system (prior to retail) is typically 2–4 times more energy intensive than at farm level, thus anything less that 2–4 benchmark results in elevated postharvest food losses. In industrialised countries, electricity enabled cold chain for example, is estimated to account for 40% of the total energy requirement during distribution[v] but some estimates found numbers to be as high as 45–60%[vi],[vii]. The lack of electricity enabled cold chain accounts for 25–30% losses of perishable food production.
What improved energy access can do to post-harvest agricultural productivity?
The International Institute of Refrigeration (IIR)[viii] estimated that if we are to establish an electricity enabled cold chain in developing countries that is on par with industrialised countries, this effort could prevent well over 200 million tonnes of perishable food loss, resulting in recovery of between USD$ 500–830 billion globally. It is estimated for every USD$1 of capital investment into the electricity enabled cold chain, up to an additional of USD$5 is added to agricultural value chain yearly from post-harvest loss prevention. Cold chain reduces postharvest food loss as coldness depresses the rate of pest infestation, rotting, oxidation, rancidification, and decolourisation. An estimate has indicated that food waste can be reduced by six-fold when frozen foods are compared with fresh foods. Sub-Saharan African especially, as compared to other parts of the world, is still heavily dependent on agricultural output for its overall GDP. Agricultural value added produces contribute between 20% and 40% of the total GDP (e.g. 30.3% for Kenya, 39.5% for Mali, 29.2% for Sudan, 22.4% for Ghana), and can be as high as 56% in Sierra Leone[ix].
What are the obstacles to providing energy access to agrarian activities?
Electrical grid infrastructure is typically centralised distribution comprising of (i) power plants, (ii) transmission lines for electricity between substations, (iii) transformers and distribution lines to convey electricity to individual customers. This means that grid infrastructure requires high capital investment which is more suitable for high population density that can only be found in urban and peri-urban areas. Agrarian communities are typically rural with low population density, thus excluded from accessibility of energy or electricity. This results in inefficient post-harvest activities that lead to high post-harvest food loss.
Many standard economic practices tend to see energy providers as separate commercial entities that are distinct from post-harvest commercial entities. As a result, Return on Investment (RoI) for capital expenditure in energy infrastructure tends to be measured against the backdrop of aggregated revenue from sale of energy vector such as electricity. Vice versa, RoI for capital expenditure in post-harvest infrastructure tends to be measured against the backdrop of aggregated revenue from sale of post-harvest commodities. The lack of overlapping vested interests of both parties meant that resources from each side are not maximised in its utility, thus limiting speedier scalability.
How can we eliminate energy poverty to prevent post-harvest and processing losses?
Decentralised distribution of electricity can be implemented in rural agrarian communities which negates the need of (i) power plants, (ii) transmission lines, and (iii) transformers. Lower price tag can hence be achieved. By itself however, it may still not ensure successful or speedier scalability in enriching agricultural communities, nor change their conventional economic post-harvest practices. There is another factor in play which is low population density of poor agricultural actors in poor countries. This significantly depresses potential revenue that can be obtained from investment into decentralised distribution. The end result can still be a depressed RoI that may yet to become economically attractive.
The separation of economic responsibility and interest of energy provider and post-harvest commercial entities should be eliminated. There are already small scale integrated entities such as: (i) Solar Freeze which is a Kenyan startup that provides solar-powered cold storages for farmers to eliminate post-harvest losses, and (ii) AgSol in Papua New Guinea which develops solar agro-processing machines such as grain mills[x]. However, they cannot tap into the resources typically available to traditional utility companies. These small scale integrated entities are limited by their finances, market reach, distribution channels, and maintenance services.
Moving forward
Traditional energy stakeholders should consider a change in their business or revenue model which they have grown accustomed to. They should facilitate investment in or sharing decentralised energy solutions with the aforementioned small scale integrated entities. Through commodity-based profit sharing approach with other agricultural economic actors, these energy stakeholders would recover their energy investment, as this investment would have helped to increase post-harvest revenue from post-harvest loss prevention.
“This article was written in collaboration with Daniel Mahadzir as a proofreader. Last updated on the 20th of July 2019.”
[i] http://www.fao.org/3/x8054e/x8054e05.htm
[ii] http://www.fao.org/save-food/resources/keyfindings/en/
[iii] https://www.washingtonpost.com/graphics/world/world-without-power/
[iv] https://www.mckinsey.com/industries/electric-power-and-natural-gas/our-insights/powering-africa
[v] McKinnon, A.C., J. Campbell, and C. Salvesen, Quick-response in the frozen food supply chain: the manufacturers’ perspective, 1998, Heriot-Watt University, School of Management.
[vi] Kelleher, G., E. Kolbe, and G. Wheeler, Improving energy use and productivity in West Coast and Alaskan seafood processing plants. 2001: Oregon Sea Grant, Oregon State University.
[vii] GREENFOODS. Data and Company Acquisition Consisting of a Factsheet Including the Companies Part of the Basic and Detailed Audits 2015 [cited 2015 19/08/2015]; Available from: http://ec.europa.eu/energy/intelligent/projects/sites/iee-projects/files/projects/documents/summary_of_energy_audits_for_smes_in_food_and_beverage_sector.pdf
[viii] (IIR), I.I.o.R., The Role of Refrigeration in Worldwide Nutrition. 5th Informatory Note on Refrigeration and Food, 2009.
[ix] http://data.worldbank.org/indicator/NV.AGR.TOTL.ZS/countries/1W-SL-KE-GH-SD-CD-ML?display=graph
[x] https://briterbridges.com/how-decentralised-energy-solutions-are-closing-the-energy-access-gap-in-africa
