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Governments and businesses should make efforts to reduce supply chain inefficiencies, which among others significantly contributes to loss of as much as 1.3 billion tonnes of food every year, says a report.
Titled 'Enabling Trade: From Valuation to Action', the report released today by the World Economic Forum (WEF) emphasised the need for urgent implementation of the Bali trade accords and deeper reforms to "sustainably meet world food demand".
"Government leaders need to step out of traditional ministerial silos to lead value-chain reforms and reap the benefits in domestic investment and global trade," it said.
According to the report, supply chain inefficiency contributes significantly to the 1.3 billion tonnes of food lost each year.
"Attacking these barriers would help improve the livelihoods of billions of the world's poorest people, and cut emissions, energy and water use.
"Lost or wasted food costs over $ 750 billion per year. Yet, agriculture and consumer policy remains focused on production and retail improvements, with insufficient action on supply chain and trade connections," it said.
Overly strict product standards, poor transportation infrastructure, border delays, and poor business climates are among the main supply chain barriers for agriculture.
Noting that major manufacturing investments could be unlocked by accelerating cross-border connectivity, it said that roughly $ 6 billion is spent each year by the automotive industry on inventory-carrying costs at borders.
"If redirected into product development, this could pay for up to six new car launches every year," the report added.
Mark Gottfredson, partner at Bain & Company said that WTO agreement announced in December in Bali was a tremendous step toward trade liberalisation and efficiency.
"Now is the time for governments and businesses to take action on the detailed and difficult work ahead," he said.
The report has been prepared by WEF in collaboration with Bain & Company.
