Derek Baker

Households are among the greatest contributors to food waste generation, particularly in fresh fruit and vegetables. From a policy perspective, reductions in household food waste are generally perceived to generate positive outcomes; however, the economic impacts are transmitted throughout the food value chain. In this paper, an Equilibrium Displacement Model (EDM) of the Australian apple industry is used to demonstrate the potential changes in economic welfare among apple industry participants from a reduction in household demand for food waste. Overall, there is an industry loss of economic surplus with apple growers, wholesalers, processors, and retailers who are adversely impacted. Domestic consumers potentially gain from increased food security at lower prices; however, the direction and magnitude of the change in consumer welfare are ambiguous and dependent on the treatment of consumer surplus on food waste in economic surplus calculations. This ambiguity likely has implications for current policies to combat food waste. The distributional impacts of changes in economic welfare among industry stakeholders emphasise the need for a collaborative approach to the food waste problem.