The Economics of Hunger: Food, Waste, Climate and the Collapse of Aid

We live in a world of glaring, debilitating contradictions where we produce more food than any civilisation in history, but hunger remains a chronic, worsening crisis. Global agriculture produces trillions of calories of food every year, enough to feed every man, woman, and child, and yet there is the painful reality that over 295 million people in the world today are facing acute hunger, pushing them to the brink of catastrophe.

Illustration by The Geostrata

This crisis is not due to insufficient supply; it is a failure of systems, worsened by collapsing humanitarian funding and industrial food waste. Moving towards a world of Zero Hunger requires confronting this profound contradiction.

THE FINANCIAL CONSEQUENCES OF EMPTINESS: HUMANITARIAN FUNDING CRISIS

Delivering the lifesaving food assistance requires vast resources, and the global funding framework meant to deliver this assistance has been put to the test. The humanitarian sector now faces financial distress like never before turning food insecurity from a regional concern to lethal global triage.

The 2024 funding requirement for coordinated humanitarian appeals for 2024 approaches $49 billion, and less than half of that requirement was met. This has resulted in a funding gap of approximately $24.2 billion, which is one of the largest shortfalls on record. This doesn't simply represent an accounting problem, it represents severe, painful cuts to essential programs.

The WFP and other organisations have been left with no option but to reduce rations, downscale programming, or even cease food distribution altogether in some severely affected areas. In South Sudan, approximately 7.7 million people are experiencing severe hunger, but only 2.5 million people or about 30% of those in need are receiving emergency food assistance, and often this assistance is half rations.

In Yemen, around 17.1 million people are food insecure, and there has been such a severe reduction in malnutrition prevention programs for 1.4 million children and pregnant or breastfeeding women that fewer than 130,000 people are currently receiving support. In Burkina Faso, 2.7 million people needed food assistance during the 2024 lean season, and only a little more than one million received life-saving assistance, due to a lack of funding and access.

This crisis has many sources: diminished impact of high-profile, recent donor boosts; global economic volatility; and the increased reliance on a small number of funding sources. When the donor retreats their budget, millions of vulnerable people who count on that aid for survival are at immediate risk. The financial architecture for aid is failing at the moment when we have the largest global needs, resulting in aid workers having to make gut-wrenching, life or death decisions about who receives food and who does not

THE CLIMATE CATASTROPHE: A TRANSCENDING FACTOR OF HUNGER

On top of the economic and logistical pressures is the growing force of climate change, an equally devastating and transcending factor that pierces the food supply and access. Climate change can no longer be thought of as a threat to the future. We are already living with its effects now, with harvests and basic infrastructure collapsing. 

The rise in global temperature and changes in precipitation patterns will directly impact the production of staple food crops. Across much of the world today, we see substantial or predicted reductions in the production of staple crops such as maize and wheat. For example, if current climate change scenarios persist, global maize yields could decrease by about 24% by the end of this century. Meanwhile, wheat, in the same climate change scenarios, would only increase by about 17%.

However, these trends are region-specific and will be influenced by many factors at the local level, such as climate in the region, agricultural practices, and management.  Further, increased occurrences and intensity of extreme weather events, cyclones, protracted droughts, and severe flooding can wipe out an entire season of food production in a matter of moments. Droughts will tap existing water reserves, leading to crop failure and then livestock death, whereas extreme rainfall can cause erosion of soil and the loss of productive soil.

This instability disproportionately affects some of the poorest and most food-insecure in the world, particularly those from the global South. Failing food crops will destabilise local commodity and food markets and drive prices up so high, the little food available for trade will become unattainable for vulnerable people, families, and communities.

Climate change will turn local, often agricultural-based food access and insecurity into forced and mass displacement and an increased risk of famine, and the shift will burden an already chronically underfunded humanitarian system to break the cycle of aid and assistance.

THE INESCAPABLE CONTRAST: STARVATION VS. SPOILAGE

The global hunger crisis becomes even more staggering when contrasted with the enormous scale of food waste. As aid agencies fight to put together funds to feed people at the verge of starvation, the globalised world runs a food system characterised by monumental waste: approximately 13% lost between harvest and retail, and 19% wasted in homes, shops and food services. In total, over 1.05 billion tonnes of food are wasted in the world every year, much of that, again, at the household level.

About one-third of all the food that is produced on Earth for human use over one billion tonnes, is lost or wasted each and every year. It is wasted at all points in the supply chain:

1. Production and Processing (Loss): Inadequate storage, poor infrastructure, and low aesthetic standards all contribute to crop loss.

2. Retail and Consumption (Waste): It is estimated that 61% of waste is generated in households, where spoiling is caused by consumer behaviour, label confusion, and overspending.

This food waste is a financial and environmental catastrophe that costs the world economy more than $1 trillion a year, in addition to being a moral tragedy. Furthermore, food loss and waste are a major contributor to the very climate change that is ruining harvests and causing hunger elsewhere, as they are estimated to be responsible for 8–10% of global greenhouse gas emissions.

The tragic irony that the system can produce enough food but not value or distribute it fairly is highlighted by the fact that the calories wasted needlessly are enough to end the severe hunger that millions of people experience.

Mass food waste, climate instability, and the funding crisis all call for a systemic "bold reset" rather than small changes. It takes coordinated action that tackles demand-side accountability as well as supply-side efficiency to resolve this paradox.

The best way to emphasise accountability, re-allocation, and resilience:

Rethinking the Funding Model: Sustainable, predictable financing methods must take the place of reliance on sporadic, voluntary donations. This could be achieved through international taxes on high-carbon industries or creative financial products. Instead of just responding to crises, this gives humanitarian organisations the assurance they need to plan long-term resilience projects.

Climate-Resilient Food Systems: To create climate-resilient agriculture, which includes drought-tolerant crops and sophisticated, regionally relevant post-harvest handling and storage facilities in vulnerable areas, significant public and private investment is required. This directly addresses the climate risks that jeopardise the supply of food.

Mandatory Food Rescue and Waste Reduction: To cut food waste at the consumer and retail levels in half, governments must enact stringent regulations in accordance with SDG Target 12.3. Additionally, the gap between waste and starvation can be immediately reduced by establishing effective "Food Rescue" systems networks that require and enable the safe rerouting of excess food from commercial sources to food banks and underserved communities.

The days of considering hunger to be a remote, intangible issue are over. We transition from a world of ridiculous contradiction to one of deliberate, shared responsibility by filling the gap in humanitarian funding and reducing the vast amount of food waste that occurs worldwide.

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BY MUSKAN GUPTA

TEAM GEOSTRATA

info@thegeostrata.com