Burgess COMMENTARY

Peter Burgess

COMMODITIES ... Better Infrastructure Would Cut Food Waste

IMAGE A group of Indonesian women harvest rice at a farm in Blitar in eastern Java island on Nov. 11. Aman Rochman/Agence France-Presse/Getty Images

JAKARTA, Indonesia—President Joko Widodo wants to improve Indonesia’s creaky infrastructure and help his country achieve food self-sufficiency. But building better roads, rails and boosting electricity could accomplish both goals.

According to a recent study by the Copenhagen Consensus Center, a think tank the focuses on international development, between 10-50% of all crops are lost between the time they leave the farm and reach consumers.

Reducing post-harvest waste by just 10 percentage points could lower food prices and prevent 60 million people from going hungry, the Copenhagen survey says.

That means building more reliable infrastructure so food gets to markets and refrigeration faster. But doing so would come at an enormous cost — $240 billion worldwide over the next 15 years, the study estimates.

A better option, the study suggests, is putting more money toward agricultural research that could help increase crop yields. Putting around $6 billion a year into R&D could reduce the number of hungry people globally by 79 million by 2030, according to the study. That amounts to $34 of economic benefit for every dollar spent, it adds.

Mark W. Rosegrant, director of the Environment and Production Technology Division at the International Food Policy Research Institute and an author of the Copenhagen study, says it shows the importance of increasing investment in both infrastructure and agricultural research in Indonesia.

“Indonesia experienced rapid agricultural growth in the 1970 and 1980s together with reductions in malnutrition and poverty,” he said by email. “This growth and improvements in food security were significantly driven by increasing investments in rural infrastructure and in agricultural research and development.”

Indonesia’s biggest challenge will be finding enough money to invest in improving infrastructure that would help connect farmers across its thousands of islands. According to the World Bank, which ranks Indonesia 53rd among 189 economies on logistical performance, it can be cheaper to import an orange from China than from elsewhere in Indonesia.

Mr. Widodo scrapped subsidies on fuel earlier this year and says he plans to plow billions of dollars in money saved into infrastructure. Part of that will include improvements to irrigation systems needed by farmers.

At a recent food security summit Mr. Widodo said he was optimistic Indonesia could achieve self-sufficiency in food production during his term through land reform, efforts to boost yields and improved irrigation. The government will also provide subsidies to farmers for fertilizer and seeds.

Mr. Rosegrant said the government would also need to focus on creating an effective regulatory system that would channel investments into rural roads and information and communications technology.

“It is better to invest in productivity-enhancing public goods, including research and infrastructure, rather than in direct subsidies to farmers,” he said.