62 | Agricultural Innovation in Developing East Asia
Many circular economy agri-food system activities are, however, in the early stages. For example, AgroCycle is a three-year project with 25 partners from China, the European Union, and Hong Kong SAR, China. It aims to further develop, demonstrate, and validate novel processes, practices, and products for the sustainable use of agricultural waste, co-products, and by-products (Toop et al. 2017). A traditional example of a circular economy is the VAC (orchard, pond, animal in Vietnamese) integrated system in Vietnam (Nhan et al. 2005). The challenge in developing East Asia is to identify FLW solutions that accommodate smallholders. A significant concern is FLW occurring in the value chains consisting of myriad smallholders with poor transport and storage systems. Solutions that improve storage conditions, the shelf-life of perishables, and logistics (for example, drones, collection centers) are needed. Novel cold storage solutions, such as stand-alone solar-powered storage, may be an option in offgrid areas or areas with unreliable electricity (Economic Consulting Associates Limited 2020). For instance, Ecozen in India developed micro cold storage, a solar-powered cold storage system. After two years of use, small-scale farmers can see an increase in profits of more than 40 percent (see appendix E) (WEF 2018). Once urbanization accelerates, many FLW innovations are expected to take hold to a greater extent in other countries.
E-commerce E-commerce has grown significantly globally and regionally15 and has received an unexpected stimulus in response to COVID-19 impacts on the food chain and consumers16 (chapter 2). Overall, e-commerce in food and agricultural has been developing slowly (box 5.11). One of the challenges is that e-commerce-based food delivery is more viable in urban areas, and many of Asia’s residents still live in rural areas (Green 2018). E-commerce may not necessarily benefit smallholders—economic viability depends on large retailers working with delivery and logistics entities, rather than small farmers selling produce directly to consumers on the internet. Indeed, e-commerce has been particularly weak when it comes to connecting smallholders who produce perishable foods because the transport and logistics costs of getting those foods to consumers are not economical on a just-in-time basis (ADB 2018). Purchase of nonperishable farm inputs may lend itself better to e-commerce, however. Rural agriculture e-commerce has also received significant attention as a response to the COVID-19 crisis. Many e-commerce enterprises have mobilized resources in procurement, logistics, operations, and marketing to maximize benefits to both farmers and consumers.17
FOOD CONSUMPTION AND NUTRITION: FROM BASIC SUSTENANCE TO PERSONALIZED NUTRITION Innovation and technology in food is an emerging area of exploration and investment in East Asia. It is driven by consumers who place increasing emphasis on convenience—greater consumption of processed, instant, and fast foods, but also of fresh food18 (Ecosperity 2018a)—and on reducing the environmental footprint of food. It requires rethinking food intake by exploring new sources of nutrition with a lower environmental footprint (for example, insects, artificial meat, vertical farming) and greater health benefits (such as food fortification, functional foods, fresh food, “clean food,” reformulated and “free-from” foods, nutrigenetics). Another important driver of nutrition innovation is the region’s
