The World Bank yesterday issued a 10-year US$25 million Sustainable Development Bond, underwritten solely by HSBC Bank.
Due September 2030, the bond will finance projects addressing food loss and waste, investments in infrastructure, access to markets and logistics, and waste management.
The bank says one third of global food is lost and wasted, costing US$1 trillion a year. Food loss and waste accounts for eight percent of annual global greenhouse gas emissions.
The bond issue coincides with a new World Bank report on food loss and waste that finds current agri-food performance is no longer sustainable. It says reducing food waste is essential for feeding a world population set to grow by three billion in the next 30 years .
Governments in many low and middle-income countries keep food prices artificially low to address food insecurity, but these prices do not reflect the true environmental costs of producing food. And this acts as a disincentive for conserving resources.
A basic market failure is that environmental impacts are unaccounted for in food costs
Reducing food loss and waste increases the supply of food, making it more affordable, without further stressing natural resources by increasing production.
Attached to the main study are four case studies that find
- Improving weather and market information reaching farmers reduces food loss and waste in Rwanda, where farmers often over plant to hedge against risks and uncertainty, leading to crop losses at the moment of harvest.
- Improving food safety allows Vietnam to produce more and better food from dwindling natural resources, and increase its compliance with import-export standards so its food is less frequently rejected.
- In Guatemala, investments in storage systems at farms greatly reduces losses and generate more sales for poor subsistence farmers.
- Addressing transportation constraints along a busy North-South corridor in Nigeria greatly reduces food loss and waste, ensuring that more food reaches the burgeoning population in the South.
The report and bond were launched for the first International Day of Awareness of Food Loss and Waste.