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Firms don't invest in seasonal machines

Poor processing facilities cause losses

By Rachel Arthur+

11-Feb-2014
Last updated on 11-Feb-2014 at 11:22 GMT

food security processing packaging FAO

Developing countries offer big opportunities for investment in food processing and packaging, if companies are prepared to take on the challenges.

One third of all food produced in the world is lost or wasted, according to Food and Agriculture Organization of the United Nations (FAO). In developing countries, food wastage often occurs before the food reaches consumers.    

Robert van Otterdijk, Agro-Industry Officer, FAO, told FoodProductionDaily.com investment in the processing and packaging sectors would be a step in reducing food waste.

Huge market

Packaging can reduce food waste by extending shelf life, and ensuring consumers can buy smaller quantities.

Preservation of the products is very important, as is containing products in suitable quantities for retail,” said van Otterdijk. “And for providing marketing purposes, advertising and information.

In Africa, there is hardly any locally manufactured quality material for packaging. Any enterprise needs to import packaging from abroad. That makes the products very expensive and uncompetitive. But if you use a plastic bottle from a local manufacturer, it won't compete with imported fancy packaging.

Efficient processing

One answer is to encourage the packaging industry to invest in these countries. The market is huge there.

Another way, van Otterdijk says, is for companies to offer packaging services locally, so small enterprises don’t have the outlay of their own packaging facilities.

Lack of efficient processing facilities can cause high food losses in developing countries. The cost of investing in machines which will only be used seasonally is one problem. Over-production and technical malfunctions of poor processing facilities cause losses.

Investment and capacity building initiatives can improve efficiency and lower food waste. But van Otterdijk says the main problem is missing infrastructure such as management and communication.

Addressing food security

There is low investment in developing countries, and the real investment needs to be made by the private sector,” van Otterdijk said.

Giving investors confidence in the markets and systems of developing countries is crucial, he added.

You need to have a political social stable environment. If there is a chance of civil unrest, no one wants to put money in. You need a proper institutional and legal and regulatory framework to protect the investments,” van Otterdijk said.

Finally, the markets should be well regulated.

The Food and Agriculture Organization of the United Nations in an intergovernmental organization set up to tackle food security.