Circular supply chain governance for sustainable fresh agricultural products: Minimizing food loss and utilizing agricultural waste

Abstract

Food loss and agricultural waste continue to pose challenges to sustainable agricultural development. The circular economy approach is believed to address these challenges. However, the implementation of this approach requires the participation of all supply chain actors, which must be coordinated through governance. This paper aims to comprehend how supply chain governance supports the implementation of the circular economy in order to minimize food loss and maximize agricultural waste utilization. This study employs a mixed-methods analysis using a quantitative survey and qualitative focus group discussion data. Vegetable and dairy supply chains in West Bandung, West Java, Indonesia, are the cases of this study. The results indicate that 35 % of food is lost along the vegetable supply chain that prioritizes traditional markets. In contrast, food loss for vegetable supply chains that prioritize modern markets is only 15 %. For dairy supply chains facilitated by cooperatives, the rate of food loss amounts to 7 %. The Study found that supply chain governance, encompassing coordinated production plans, selling systems, price mechanisms, packaging systems, and the management of low-quality products, all contribute to reducing food loss under the circular economy principles. In terms of agricultural waste, most vegetable and dairy farmers (80 % and 75 % of respondents respectively) do not manage their agricultural waste properly. For this, connecting supply and demand for agricultural waste and enhancing knowledge among farmers are essential. This paper concludes that coordination and information sharing within and between supply chain actors are required to address food loss and agricultural waste problems.