Food production and consumption, from farm to table to leftovers put in the trash can, carry “huge hidden costs” of at least $10 trillion a year, mostly from the consequences of unhealthy diets, said the UN Food and Agriculture Organization on Monday. In its State of Food and Agriculture report, the FAO urged governments and the private sector to use a true-cost accounting system to assess the flaws in the agrifood system and how to mitigate them.
The hidden costs, from disease and lost productivity, “are more than sufficient to highlight the need for action,” said the report. They were equal to 10 percent of global GDP in 2020, or equal to $35 billion a day. This year’s State of Food and Agriculture (SOFA) report was the first to uniformly break down costs to the national level. Next year, the SOFA report will focus on targeted assessments of the best ways to mitigate the hidden costs.
“I hope that this report will serve as a call to action for all partners — from policymakers and private-sector actors to researchers and consumers — and inspire a collective commitment to transform our agrifood system for the betterment of all,” said FAO director general Qu Dongyu.
More than 70 percent of the hidden costs were the result of unhealthy diets rich in fats and sugars that lead to obesity and related chronic diseases and to lost productivity, said the FAO. Those losses were particularly high in high-income and upper-middle-income countries. One-fifth of losses were environmental, such as greenhouse gases, nitrogen emissions, and changes in land and water use.
In lower-middle-income countries, which account for 22 percent of hidden costs, poverty and under-nourishment were more significant as areas of concern. In low-income countries, poverty and under-nourishment were more than half of all hidden costs, said the report.
“A commonly asked question is whether addressing the hidden costs of agrifood systems will raise food prices,” said the SOFA report. “It will depend on hidden costs being addressed and the instruments being used.” Increased agricultural productivity could drive down food prices, for example. But some policies could drive up farm costs, such as requiring farmers to alter production practices, with a ripple effect on food prices. And others might have no effect on food prices.
“Integrating all of the hidden costs and benefits into decision-making processes is not an easy task,” said the report. “Decision-makers face conflicting objectives and addressing the hidden costs of agrifood systems can require significant change to current production and consumption practices, which may be met with resistance.”
To read the SOFA report, or to watch a video about it or to read an interactive version, click here.