The Food and Agriculture Organisation of the United Nations (FAO) has released an analysis revealing huge hidden costs on our environment, health and society worth at least $10 trillion.
This represents almost 10% of global Gross Domestic Product (GDP), covering 154 countries.
The State of Food and Agriculture (SOFA) 2023 publication stated that the largest hidden costs which are more than 70%, are driven by unhealthy diets which are high in ultra processed foods, sugars and fats.
This leads to obesity, non-communicable diseases, and causes labour productivity losses.
These loses are especially big in high and upper middle income countries.
Of the total costs, one fifth are environment related, including nitrogen (N) emissions and greenhouse gas (GHG), land use change and water use.
Hidden costs associated with poverty and undernourishment are the most significant in low income countries.
These type of countries represent more than a quarter of their GDP, as opposed to less than 12% in middle income countries and less than 8% in high income countries.
Report
The report allows for more regular and detailed analysis by governments and the private sector of the hidden or ‘true’ costs of agri-food systems via true cost accounting, followed by actions to mitigate these harms.
The new FAO report which represents initial estimates, is the first to disaggregate these costs down to the national level ensuring they are comparable between countries across cost categories.
FAO will dedicate two editions of SOFA to the same theme, for the first time.
Next year’s report will be centred on in-depth targeted assessments to recognise the best ways to mitigate them.
Taxes, subsidies, legislation and regulation are among levers that the report urges governments to pull to change agri-food systems and to address the climate crisis, poverty, inequality and food security.
FAO director general, QU Dongyu said:
“In the face of escalating global challenges, food availability; food accessibility and food affordability; climate crisis; biodiversity loss; economic slowdowns and downturns; worsening poverty; and other overlapping crises.
“The future of our agri-food systems hinges on our willingness to appreciate all food producers, big or small, to acknowledge these true costs.”
QU Dongyu added: “I hope that this report will serve as a call to action for all partners… and inspire a collective commitment to transform our agri-food systems for the betterment of all.”
