Abstract

Large estimates of food losses among farms and intermediaries publicized recently by several international organizations invite the question: Why do economic decision makers live with such losses? The intuitive, economic response would be that the marginal benefits of loss reduction do not exceed the marginal costs. This paper analyzes the possibility that economically significant losses nevertheless might be occurring at the farm and wholesale levels in two cases that have drawn attention in the Near East and North Africa. In Tunisia, concerns exist that farm equipment, especially harvesting equipment, is a major source of wheat losses in a country for which the grain plays an important role in diets and the national import bill. Our analysis finds that smaller wheat farms do have relatively large physical losses, compared to large farms, attributable to the use of older and imperfectly adjusted harvesting equipment. Nevertheless, given the scale of most operations in Tunisia, there is little incentive for farmers to make the specific investments that would significantly reduce losses. In Egypt, local experts have focused on large post-harvest losses of tomatoes, an important crop, largely produced by small-scale farmers. We examine the effectiveness of plastic crates for reducing food losses in harvesting, transport and storage as compared to traditional palm crates. We find that there is perhaps a marginal gain to be had in terms of the value of losses avoided, but such gains are likely within a margin that makes adoption of plastic economically ambiguous.