Economic Development: April 2024 Current Affairs | Current Affairs & General Knowledge - CLAT PDF Download

Damage to Cardamom Plantation

Context

Extensive destruction of cardamom plantations has been documented in several parts of Kerala as a result of the drought.

• Farmers are experiencing substantial losses, with concerns about crop devastation if the drought continues. The Indian Council of Agricultural Research and Krishi Vigyan Kendra (KVK) Idukki suggest strategies like applying Pigmented Facultative Methylotrophic Bacteria (PPFM) through foliar spraying and plant treatments to reduce disease occurrence, aiming to alleviate the effects of drought on cardamom output.
• PPFMs are aerobic, Gram-negative bacteria that utilize formate, formaldehyde, and methanol as their primary carbon and energy sources. They belong to the Methylobacterium genus and exhibit phylogenetic diversity. 

Extensive research has focused on PPFMs in agricultural contexts. They can be administered to seeds and plants as a foliar spray.

• Cardamom is a spice derived from the seeds of the Elettaria cardamomum plant, alternatively referred to as green cardamom or true cardamom. 
• Originating from southern India, this plant belongs to the ginger family. Cardamom is known for its robust and distinctive flavor profile, characterized by a harmonious blend of spiciness and sweetness.

Soil and Climate

• Soil: It is grown in forest loamy soils, which are usually acidic in nature with a pH range of 5.0–6.5
• This crop can be grown at an elevation from 600 to 1500 m.
• Temperature: 10 to 35 degree C
• Rainfall: 1500 to 4000 mm
• The growth of cardamom is enhanced when planted in humus rich soils with low to medium available phosphorous and medium to high available potassium.

Shrimp Production

Context

Lately, a human rights organization headquartered in Chicago has alleged India of human rights and environmental breaches within the shrimp farming industry.

About Shrimp Farming in India

• India is the world's second-largest producer of Whiteleg Shrimp (Litopenaeus vannamei).
• India has emerged as a leading shrimp exporter globally, with its share in the U.S. market rising significantly from 21% to 40% during 2022-23.
• Shrimp remains a dominant component of India's seafood exports, constituting $5.6 billion out of the total $8.09 billion exported in 2022-23.
• The state of Andhra Pradesh alone contributes to nearly 70% of India's shrimp production.

Shrinkflation

Context

As input costs, which were relatively low for a few quarters, begin to show signs of inflation, the potential for shrinkflation becomes a significant concern within the fast-moving consumer goods (FMCG) sector.

About Shrinkflation

• Shrinkflation occurs when products decrease in size while consumers continue paying the same price. This strategy allows manufacturers to offset higher production costs without raising retail prices. 
• Essentially, it's a hidden form of inflation where product size decreases instead of prices increasing. This practice results in a higher price per unit of weight or volume.
• The reasons behind shrinkflation typically include increasing production costs and market competition.
• In terms of impacts, shrinkflation primarily affects fast-moving consumer goods (FMCG) which are products characterized by high-volume sales, quick inventory turnover, and affordable pricing.
• These goods encompass everyday essentials like food, beverages, toiletries, cleaning supplies, and other inexpensive household items.

IRDAI Marks 25th Anniversary

Context

The Insurance Regulatory and Development Authority of India (IRDAI) celebrated its 25th Anniversary.

More About the News

• Established according to the suggestions of the Malhotra Committee, this autonomous entity was set up in 1999 and officially recognized as a statutory body in 2000 under the Insurance Regulatory and Development Authority Act, 1999.
• Its objectives are to promote the efficient and organized expansion of the insurance sector, guarantee prompt resolution of legitimate claims, and establish an efficient system for addressing grievances.
• This body functions under the jurisdiction of the Ministry of Finance.
• Its responsibilities include accrediting insurance firms, safeguarding policyholders' interests, and resolving disputes.

Significance in Transforming the Insurance Sector

• Supported an increase in insurance penetration to 4.2% in 2021-22 from 2.71% in 2001-02.
• Contributed to higher insurance density, reaching $91 in 2021-22 compared to $11.5 in 2001-02.
• Facilitated the introduction of new intermediaries like corporate agents, bancassurance, and online sales, resulting in expanded job prospects.
• Drove digital innovation through initiatives like e-KYC, paperless policies, and digital payment solutions.

Initiatives of IRDAI

• Unified Grievance Management System: Simplifies the process of addressing complaints and resolving grievances.
• Saral Jeevan Bima: Introduces a standardized term life insurance product.
• Saral Pension: Offers an immediate annuity plan for pension benefits.
• Bima Sugam: Establishes a comprehensive digital platform for various insurance-related transactions.

Draft Norms of RBI for the Regulation of Payment Aggregators

Context

The Reserve Bank of India (RBI) recently published two consultation papers aimed at enhancing the regulation of offline Payment Aggregators (PAs). One paper focuses on the activities of offline PAs, while the other proposes strengthening safety measures by expanding Know Your Customer (KYC) requirements, due diligence for merchants, and operational guidelines for Escrow accounts. The RBI has invited comments and feedback on these proposals by May 31.

Who are Payment Aggregators?

Payment aggregators (PAs) are entities that facilitate online transactions by collecting payments from customers on behalf of merchants. They serve as intermediaries between buyers, sellers, and payment gateways.

Operations of PAs:

• Payment Collection: PAs gather payments from customers using various methods like credit/debit cards, net banking, and digital wallets.
• Funds Transfer: After collecting payments, the aggregator transfers the funds to the merchant's account after deducting service fees.
• Settlement: PAs ensure that funds are deposited into the merchant's bank account within a specified timeframe.
• Security Measures: They employ encryption and other security protocols to safeguard customer information.
• Integration: PAs provide APIs and plugins for merchants to accept payments on websites and apps.

Popular PAs include Razorpay, Paytm, and PayPal, enabling businesses to accept online payments and facilitating e-commerce.

RBI's Draft Rules Overview

• The RBI aims to extend existing guidelines governing PAs from e-commerce to offline spaces, covering face-to-face transactions. This move is driven by similarities in PAs' activities both online and offline, seeking a unified regulatory approach and data standards. 
• The proposed rules are informed by recent incidents, like the Paytm Payments Bank crisis, emphasizing strengthened oversight.

Mandatory RBI Registration?

• Non-bank PAs (especially offline) will require RBI registration, while banks offering PA services won't need separate authorization but must comply with revised guidelines within three months. 
• PAs, online or offline, must notify the RBI of their intent to seek authorization within 60 days of the circular's issuance.

Provisions for Sustainability

• RBI proposes that non-banking entities offering face-to-face services maintain a minimum net worth of ₹15 crore (rising to ₹25 crore by March 2028). Non-compliant offline operators must cease operations by July 31, 2025.

KYC Requirements

• The regulations aim to prevent merchants from collecting funds for unoffered services. KYC scope will expand, categorizing merchants based on turnover. 
• Contact point verification and bank account validation will be required for onboarded merchants.

Data Privacy Provisions

• Starting August 1, 2025, entities (except card issuers/networks) can't store face-to-face payment data, except for minimal transaction details. Card networks will bear compliance responsibility in this regard.

Asia Development Outlook Report 2024

Context

The Asian Development Bank (ADB) has updated its projections for India's Gross Domestic Product (GDP) growth in fiscal years 2024 and 2025 in its latest Asia Development Outlook Report released in April 2024. This revised forecast reflects a positive outlook driven by several contributing factors.

What are the Key Highlights of Asia Development Outlook Report 2024?

Asia’s Economic Growth Prospects

• Overview: Despite uncertain external conditions, Asia is poised to sustain robust economic growth in the upcoming years. Factors such as the completion of interest rate increases across most economies and a steady rebound in goods exports, particularly fueled by improving semiconductor demand, contribute to the region's optimistic outlook.
• GDP Growth Projections: Asia's GDP growth forecast for 2024 remains steady at 4.9%, with a similar outlook maintained for 2025. This consistent growth trajectory underscores the region's adeptness in managing external challenges and maintaining economic momentum.
• Inflation Trends: Inflation across Asia is anticipated to moderate, with a forecast of 3.2% for 2024 and a further decrease to 3.0% in 2025. This trend signals a relatively stable pricing environment, which could bolster consumer confidence and spending.

India’s Economic Growth Forecast

• Growth Outlook: India's growth, propelled by investments, is positioned as a significant driver in Asia's economic landscape. 
• The Asian Development Bank (ADB) now predicts India's GDP growth to hit 7% in FY 2024 and rise to 7.2% in FY 2025, up from the previous forecast of 6.7% for FY 2024.

Factors Driving Growth in FY 2024

• Increased infrastructure spending by central and state governments is a key growth driver.
• Private corporate investments are expected to climb, supported by stable interest rates and improved consumer sentiment.
• The service sector's performance, particularly financial, real estate, and professional services, is contributing substantially to economic expansion.
• Growth Momentum in FY 2025: FY 2025 is anticipated to witness heightened momentum, driven by improved goods exports, enhanced manufacturing efficiency, and increased agricultural productivity. 
• This forecast underscores a positive economic outlook for India, buoyed by robust domestic demand and supportive policy measures.
• Risks and Challenges: Despite the optimistic outlook, unforeseen global shocks such as disruptions in crude oil supply and weather-related impacts on agriculture remain significant risks. 
• The current account deficit is expected to moderately widen due to increased imports to meet domestic demand. Nevertheless, recent data from the Reserve Bank of India (RBI) shows a sequential decrease in the current account deficit from 1.3% of GDP in Quarter 2 FY24 to 1.2% in Quarter 3 FY24.

What are the Sectors Driving Asia’s Growth?

• Economic Powerhouse: Asia is home to several of the world's fastest-growing economies. With China, Japan and India being in the top 5 economies of the world.
• Fueled by economic growth, a burgeoning middle class across Asia is creating a vast pool of consumers, driving demand for goods and services.
• Example: Vietnam is expected to add 36 million people to its middle class by 2030.
• Home to Manufacturing Hubs: For decades, Asia has been a dominant manufacturing centre. From China's dominance in electronics to Vietnam's rise in footwear production, Asian countries benefit from skilled labour forces and efficient infrastructure, making them cost-competitive and crucial to global supply chains.
• Rising Trade & Investment: Asian nations are actively involved in international trade. Regional trade agreements like the Regional Comprehensive Economic Partnership (RCEP) create significant trade blocs, boosting intra-Asian trade and foreign investment.
• Rising Financial Centers: Asian cities such as Tokyo, Hong Kong and Singapore have emerged as major financial centres, attracting investments, fostering entrepreneurship, and facilitating cross-border capital flows.
• The growing influence of Asian financial institutions like the Asian Infrastructure Investment Bank (AIIB) reflects the region's increasing role in shaping global economic policies.

What is India’s Contribution to Asia’s Growth?

• Advancing Regional Connectivity: India has played a pivotal role in advancing regional connectivity across Asia through initiatives such as the International North-South Transport Corridor (INSTC) and the India-Middle East-Europe Corridor. These endeavors aim to enhance transportation networks, trade routes, and economic collaboration among Asia, Africa, and Europe.
• Promoting Renewable Energy: India is actively championing renewable energy programs that contribute to sustainable development in Asia. The International Solar Alliance (ISA), a collaborative effort launched by India and France, seeks to promote global adoption of solar energy, especially in sun-abundant nations across Asia and Africa, addressing energy security and climate change challenges.
• Empowering Through Capacity Building: India is committed to capacity-building endeavors throughout Asia, exemplified by initiatives like the Indian Technical and Economic Cooperation (ITEC) program. This program provides training, education, and skill development opportunities to professionals and students from Asian countries, fostering human resource development and cultural exchanges.
• Enhancing Asia with UPI: India's Unified Payments Interface (UPI) services are gaining popularity across Asia due to their convenience and efficiency in digital transactions. UPI services have already been introduced in Sri Lanka and Mauritius, further solidifying India's role in promoting seamless financial connectivity across the region.

MPC Keeps Repo Rate Unchanged

Context

In a recent meeting, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) voted to maintain the current interest rates, with the repo rate held steady at 6.5%. Additionally, the committee reaffirmed its commitment to gradually withdraw accommodation measures.

What are the Outcomes of the MPC Meeting?

• The RBI has retained the GDP growth forecast at 7% for FY25 as against the 7.6% growth projected by the National Statistical Office (NSO).
  • It has projected a growth of 7.1% in the first quarter of FY25, 6.9 per cent in Q2, and 7% each in Q3 and Q4.
• The MPC decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50% and the standing deposit facility (SDF) at 6.25%.
• The MPC remains committed to aligning inflation with the 4% target within a band of +/- 2% while supporting the objective of growth.

What are the Reasons for Holding Interest Rates Unchanged?

• Food Inflation:
  • Despite a broad-based moderation in inflation across the Indian economy, higher food inflation has kept headline inflation elevated. The ongoing uncertainties in food prices, influenced by global factors and the impact of El Nino, continue to present challenges. 
  • The imminent arrival of rabi harvests in the market, coupled with expectations of a normal monsoon next year, is anticipated to alleviate some of the pressure on food prices. Nevertheless, inflation in food and beverages remains elevated, primarily due to price increases in vegetables, pulses, and spices.
• Festival Season Impact:
  • The upcoming festive season is expected to boost market liquidity owing to heightened demand and increased consumption during festival days.
• Crude Oil Prices and Input Costs:
  • Although crude oil prices have seen a decrease, the outlook remains uncertain due to global uncertainties stemming from regional conflicts and disruptions in the supply chain.
• Resilient Economic Activity:
  • Despite various challenges and uncertainties, the Indian economy has demonstrated resilience. This confidence in the economy's strength has led to the decision to maintain benchmark rates, reflecting a belief in its ability to withstand potential shocks.
• Effect of Previous Policy Repo Rate Hikes:
  • The Monetary Policy Committee noted that the effects of previous policy repo rate hikes are still in progress and influencing the economy.
• Management of Inflation Risks:
  • Maintaining unchanged rates may be a precautionary measure to carefully monitor the situation and be prepared to act swiftly if inflationary pressures intensify.

Reform by RBI for Financial Inclusion and Digital Innovation

Context

Recently, the RBI governor, during a press briefing on monetary policy decisions, unveiled various measures geared towards advancing economic inclusivity and improving the utilization of information technology in economic pursuits.

What are Recent Developments Proposed by RBI?

• Enhanced Cash Deposit Access via Unified Payment Interface (UPI): Customers will now have the convenience to deposit cash at banks and ATMs using the UPI app, eliminating the current requirement for a debit card. UPI integrates multiple bank accounts into a single mobile application, facilitating seamless fund routing and merchant payments across various banking systems operated by the National Payments Corporation of India (NPCI).
• Third-Party UPI Access for Prepaid Payment Instruments (PPIs): The RBI proposes allowing users to leverage third-party UPI apps for making payments directly from Prepaid Payment Instrument (PPI) wallets, easing the reliance on specific web or mobile apps provided by PPI issuers. PPIs enable various financial services such as purchases, remittances, and transactions using stored funds.
• Foreign Portfolio Investment (FPI) in Sovereign Green Bonds: In an effort to broaden non-resident participation, the RBI will permit eligible foreign investors in the International Financial Services Centre to invest in Sovereign Green Bonds. These bonds are issued to fund environmentally beneficial projects like renewable energy and clean transportation.
• Introduction of Mobile App for Retail Direct Scheme: The RBI will introduce a mobile application for its Retail Direct scheme, enabling individual investors to hold gilt accounts with the RBI and invest in government securities.
• Review of Liquidity Coverage Ratio (LCR): The RBI plans to review the Liquidity Coverage Ratio framework to enhance liquidity risk management by banks. LCR measures the proportion of high-quality liquid assets (HQLA) that financial institutions must maintain to cover potential outflows during stressed conditions.

Onion Export Ban & Associated Challenges

Context

The Indian government recently permitted onion exports to the UAE, despite an existing export ban, in an effort to manage domestic surplus. However, critics contend that the selling price in the UAE market is notably lower than global prices, impacting their profitability and raising concerns of unfair trade practices.

What is the Current Issue Related to the Export of Onion?

Challenges Faced by Onion Exporters

• In December 2023, the Indian government implemented a ban on onion exports to avert a domestic scarcity but permitted exports to specific nations like the UAE upon diplomatic requests. 
• However, the exportation of onions to the UAE has resulted in a significant pricing discrepancy, with Indian farmers receiving substantially lower prices in contrast to the much higher rates in UAE markets. 
• For instance, recent reports show onion prices surging in major UAE markets to as high as $1500 per tonne, while Indian shipments to the UAE were dispatched at approximately $500 to $550 per tonne.

Issues Raised by Exporters

• Transparency Concerns: The method of setting export prices and choosing exporters and importers lacks transparency, prompting worries among farmers and exporters. 
• Exporters claim that certain UAE importers are reaping substantial profits at the expense of Indian farmers. The exports are managed by the National Cooperative Exports Limited (NCEL), a government-owned entity in India. In contrast, importers in the UAE are private traders and supermarket chains, not government agencies focusing on food security.
• Trade Norms Violation: According to trade norms, local onion suppliers bid for the lowest possible price, and buyers are selected based on the highest price offered. However, exporters argue that this practice is not being adhered to in the case of the UAE.

Concerns Voiced by Onion Farmers

• Lack of Minimum Support Price (MSP): Onion farmers do not benefit from government MSP-based procurement and solely rely on market forces.
• Price Discrepancy: Farmers receive very low prices for their onions compared to international market rates, resulting in significant losses. Unseasonal heavy rains in March and April 2023 damaged a significant portion of harvested onions, leading to distressed sales of onions prone to rapid quality deterioration.
• Export Bans: Frequent export bans on onions due to domestic shortages can disrupt the market and affect farmers' income adversely. Most rabi onion farmers store their crops after harvesting to prevent spoilage, gradually selling them from September to October before the next kharif crop. Higher realizations during the off-season help them recover from losses incurred during earlier low-price sales, but measures like export bans dampen their hopes of realizing due profits.
• Furthermore, export bans on staples such as rice, wheat, or onions could tarnish India's reputation as a reliable global food source, complicating efforts to restore it.

What are the Steps Needed to Address the Issues of Onion Farmers in India?

• Fair Price Mechanism: Implement a fair and transparent pricing mechanism that ensures farmers receive reasonable prices for their onions.
• Export Policy Review: There is a time for India to review and revise export policies in line with the General Agreement on Tariffs and Trade to ensure they do not negatively impact farmers, and promote fair trade practices.
• Market Reforms: Introduce reforms in the agricultural marketing system to reduce dependency on middlemen and ensure farmers get fair prices for their produce.
• Export Price Monitoring: Monitor export prices closely to ensure they are in line with international market prices and do not disadvantage domestic farmers.
• Solar-powered Dehydration Units: Deploying mobile, solar-powered dehydration units at village levels can empower farmers to dehydrate excess onions during surplus.
• This extends shelf life, minimises spoilage, and creates a readily exportable product.

International Agreements and Regulations Governing Agricultural Imports and Exports

• The international landscape concerning the import and export of agricultural products is governed by several key treaties and policies. Here are some notable agreements:
• WTO Agreement on Agriculture: Arising from the Uruguay Round negotiations, this agreement seeks to overhaul trade practices in the agricultural sector toward greater market orientation. Its provisions entail commitments to reducing subsidies, lowering trade barriers, and enhancing the predictability and transparency of trade. India is a signatory to this agreement.
• Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement): This treaty addresses measures aimed at safeguarding human, animal, and plant life or health from risks associated with pests, diseases, contaminants, toxins, or disease-causing organisms in food, beverages, or feedstuffs. India is a participant in this agreement.
• International Plant Protection Convention (IPPC): The IPPC is designed to shield the world's plant resources from pest-related threats and to facilitate secure international trade. India is a party to this convention.

Accelerating Crop Diversification in India

Context

Recently, West Bengal has undergone a notable change in its agricultural sector, especially in districts adjacent to Bangladesh, with a shift towards crop diversification. This transformation involves farmers moving from traditional wheat farming to cultivating alternative crops such as bananas, lentils, maize, and others.

What are the Reasons Behind the Shift from Wheat Production?

• Wheat Blast Disease: The emergence of wheat blast disease in Bangladesh in 2016 led to a two-year ban on wheat cultivation in border areas of West Bengal, including Murshidabad and Nadia districts, prompting farmers to explore alternative crops.
• Wheat blast disease is a fungal infection caused by the fungus Magnaporthe oryzae Triticum (MoT) that primarily affects wheat crops.
• It manifests as dark lesions on wheat spikes, leaves, and stems, leading to severe yield losses.
• Economic Viability: Farmers have highlighted the economic advantages of cultivating alternative crops such as bananas.
• The profitability of crops like bananas during peak seasons, coupled with stagnant wheat prices and concerns over water consumption, has contributed to the shift.
• Shift to Higher Output Crops: Maize cultivation has seen a significant uptick in the area as well, with production increasing eightfold from 2011 to 2023.
• While maize prices may be lower per quintal compared to wheat, higher per-hectare output and demand from poultry and food processing industries make it a lucrative alternative.
• Pulses and oilseeds production in this area has also surged.

Why India Needs to Focus on Crop Diversification?

• Crop diversification, which involves cultivating a variety of crops instead of focusing on a single type, is crucial for India's agricultural future. The Green Revolution introduced high-yielding rice and wheat varieties, significantly boosting food production and reducing hunger. 
• However, this reliance on monoculture has led to a decline in crop diversity, resulting in the loss of traditional strains and genetic richness. India has lost over 100,000 traditional rice varieties since the 1970s due to this shift. Therefore, transitioning towards crop diversification is essential to ensure sustainable agriculture.

Advantages of Crop Diversification

• Risk Mitigation: Farmers in drought-prone regions can mitigate risks by cultivating both drought-tolerant crops (like millets or sorghum) and water-intensive crops (like rice or vegetables). This approach ensures some level of harvest even during water shortages.
• Enhanced Soil Health: Planting leguminous crops like soybeans or peanuts enriches the soil with nitrogen, benefiting subsequent crops like maize or wheat.
• Market Opportunities: Diversifying crops enables farmers to tap into niche markets such as organic produce, which commands higher prices.
• Pest and Disease Management: Intercropping or mixed cropping helps manage pests naturally, reducing the reliance on chemical pesticides.
• Biofuel Potential: Crops like Jatropha and Pongamia offer biofuel production opportunities, contributing to energy security.

Challenges and Concerns

• Market Risks and Limited Opportunities: Farmers are hesitant to switch from established crops like rice and wheat due to fluctuating market prices and limited demand for alternative crops.
• Financial Constraints: Diversification requires investment in seeds, equipment, and knowledge, which smallholder farmers may struggle to afford.
• Infrastructure and Storage Needs: Specialized storage and transportation facilities are lacking in rural areas, leading to spoilage of perishable crops.
• Dietary Shifts: Crop diversification could disrupt dietary habits in regions where rice and wheat are staples.
• Promising Millets: Nutrient-rich millets like Jowar, Ragi, and Bajra are gaining popularity but require investment in processing facilities to create consumer-friendly products.

In summary, crop diversification is vital for India's agricultural sustainability, offering benefits like risk mitigation, soil health improvement, and market opportunities. However, challenges such as market risks, financial constraints, infrastructure needs, and dietary shifts must be addressed for successful adoption of diversified cropping systems.

Food Waste Index Report 2024

Context

The recent release of the Food Waste Index Report 2024, a collaboration between the United Nations Environment Programme (UNEP) and WRAP (Waste and Resources Action Programme), emphasized the critical need to enhance and expand data systems for better tracking and monitoring of food waste. 

• WRAP, a UK-based non-profit organization focused on climate action globally, aims to address the root causes of the climate crisis and promote a sustainable future for the planet. 
• The report defines "food waste" as food and its inedible parts removed from the human food supply chain, while "food loss" refers to all quantities of crop and livestock commodities fit for human consumption that exit the production/supply chain before reaching the retail stage.

What are the Key Highlights of the Report?

• Extent of Food Loss and Waste: In 2022, global food waste reached 1.05 billion tonnes, equating to one fifth (19%) of the food accessible to consumers across retail, food service, and households being discarded. This is in addition to the 13% of food lost in the supply chain from post-harvest to just before retail, according to FAO estimates.
• Impacts of Food Waste on Greenhouse Gas Emissions: Food loss and waste contribute to 8-10% of global greenhouse gas emissions, a figure nearly five times greater than emissions from the aviation industry. This issue persists while a third of the global population grapples with food insecurity.
• Reduced Disparity in Food Waste: Following the 2021 Food Waste Index Report, data coverage has significantly expanded, leading to a noticeable reduction in disparities in average per capita household food waste. In high-income, upper-middle income, and lower-middle income countries, observed levels of household food waste differ by just 7 kg per capita annually.
• Correlation Between Temperature and Food Waste: Warmer nations tend to exhibit higher per capita household food waste, likely due to increased consumption of fresh foods with substantial inedible parts and inadequate cold chain infrastructure. Elevated temperatures, extreme heat events, and droughts make it challenging to safely store, process, transport, and sell food, often resulting in substantial waste.
• Urban-Rural Disparities: Middle-income countries demonstrate urban-rural disparities in food waste, with rural areas generally wasting less. Possible reasons include greater diversion of food scraps to pets, animal feed, and home composting in rural settings.
• Insufficient Tracking Systems for Progress: Many low- and middle-income countries lack adequate systems to monitor progress towards meeting Sustainable Development Goal 12.3 of halving food waste by 2030, especially in retail and food services. Presently, only four G-20 countries (Australia, Japan, UK, US) and the European Union possess food waste estimates suitable for tracking progress towards the 2030 target.
• Variability in Data and Subnational Estimates: Countries like India, Indonesia, and South Korea rely solely on subnational estimates for food waste data, revealing a gap in comprehensive national data. The report underscores the need for more inclusive studies to gain a clearer understanding of the food waste landscape.

What are the Key Recommendations of the Food Waste Index Report 2024?

• Engagement of G20 Countries: Encourage G20 countries to take a leading role in international cooperation and policy development to achieve Sustainable Development Goal (SDG) 12.3, leveraging their influence on global consumer trends to promote awareness and education about food waste domestically and internationally.
• Promotion of Public Private Partnerships: Encourage the embrace of Public Private Partnerships (PPPs) to reduce food waste and its impacts on climate and water stress, bringing together governments, regional and industry groups to collaborate and deliver a shared goal through a Target-Measure-Act approach.
• Utilisation of the Food Waste Index: Advocate for countries to use the Food Waste Index to consistently measure food waste, develop robust national baselines, and track progress towards SDG 12.3. This includes addressing the lack of comprehensive food waste data collection, especially in the retail and food service sectors.
• Conducting Representative National Food Waste Studies: Highlight the necessity for representative national food waste studies in key countries such as India, China, South Africa, Indonesia, and Mexico to address the variance in data and effectively tackle food waste at both individual and systemic levels.
• Collaborative Efforts Across Sectors: There is a need to urge governments, cities, food businesses, researchers to collaborate in efforts to reduce food waste, emphasising the importance of accurate measurement, innovative solutions, and collective action to achieve SDG 12.3 by halving global food waste by 2030.